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 every Interactive Data File required to be submitted 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 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 definition s of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

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.

~~85,720,238~~87,214,220 common shares were outstanding as of ~~April 30,~~October 31, 2019.

Hancock Whitney Corporation – a financial holding company registered with the Securities and Exchange Commission

Hancock Whitney Bank – a wholly-owned subsidiary of Hancock Whitney Corporation through which Hancock Whitney Corporation conducts its banking operations

Beta – amount by which deposit or loan costs change in response to movement in short-term interest rates

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

Capital One – Capital One, National Association, from which the Company acquired a trust and asset management business in July 2018.

CECL – Current Expected Credit Losses, the Accounting Standards Update effective for the Company on January 1, 2020

CMO – ~~Collateralized Mortgage Obligation~~collateralized mortgage obligation

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.

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

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

MidSouth – MidSouth Bancorp, Inc., an entity the Company ~~has agreed to acquire under an Agreement and Plan of Merger dated April 30,~~acquired on September 21, 2019

te – taxable equivalent adjustment, or the term used to indicate that a financial measure is presented on a fully taxable equivalent basis

	March 31,			December 31,			September 30,			December 31,
(in thousands, except per share data)	2019			2018			2019			2018
ASSETS
Cash and due from banks	$	360,194		$	383,372		$	468,063		$	383,372
Interest-bearing bank deposits		163,232			110,579			47,604			110,579
Federal funds sold		530			515			1,909			515
Securities available for sale, at fair value (amortized cost of $2,698,865 and $2,755,806)		2,681,080			2,691,037
Securities held to maturity (fair value of $2,892,910 and $2,935,856)		2,896,442			2,979,547
Securities available for sale, at fair value (amortized cost of $3,480,949 and $2,755,806)								3,549,657			2,691,037
Securities held to maturity (fair value of $2,920,356 and $2,935,856)								2,855,062			2,979,547
Loans held for sale		27,437			28,150			75,789			28,150
Loans		20,112,838			20,026,411			21,035,952			20,026,411
Less: allowance for loan losses		(194,688	)		(194,514	)		(195,572	)		(194,514	)
Loans, net		19,918,150			19,831,897			20,840,380			19,831,897
Property and equipment, net of accumulated depreciation of $233,078 and $225,969		358,205			353,668
Right of use assets, net of accumulated amortization of $3,064		113,447			—
Property and equipment, net of accumulated depreciation of $245,013 and $225,969								382,934			353,668
Right of use assets, net of accumulated amortization of $9,328								113,598			—
Prepaid expenses		39,153			35,047			41,768			35,047
Other real estate and foreclosed assets, net		27,148			26,270			30,955			26,270
Accrued interest receivable		94,404			86,681			93,038			86,681
Goodwill		792,084			790,972			861,291			790,972
Other intangible assets, net		91,013			96,151			116,078			96,151
Life insurance contracts		553,893			549,300			609,567			549,300
Deferred tax asset, net		—			22,967			—			22,967
Funded pension assets, net		168,910			65,125			171,080			65,125
Other assets		204,909			184,629			284,776			184,629
Total assets	$	28,490,231		$	28,235,907		$	30,543,549		$	28,235,907
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits
Noninterest-bearing	$	8,158,658		$	8,499,027		$	8,686,383		$	8,499,027
Interest-bearing		15,221,636			14,651,158			15,514,916			14,651,158
Total deposits		23,380,294			23,150,185			24,201,299			23,150,185
Short-term borrowings		1,388,735			1,589,128			2,108,815			1,589,128
Long-term debt		224,962			224,993			246,641			224,993
Accrued interest payable		18,031			12,267			17,956			12,267
Lease liabilities		128,494			—			131,077			—
Deferred tax liability, net		19,065			—			25,510			—
Other liabilities		140,075			177,994			225,871			177,994
Total liabilities		25,299,656			25,154,567			26,957,169			25,154,567
Stockholders' equity:
Common stock		292,716			292,716			309,513			292,716
Capital surplus		1,731,148			1,725,741			1,919,840			1,725,741
Retained earnings		1,299,220			1,243,592			1,408,183			1,243,592
Accumulated other comprehensive loss, net		(132,509	)		(180,709	)		(51,156	)		(180,709	)
Total stockholders' equity		3,190,575			3,081,340			3,586,380			3,081,340
Total liabilities and stockholders' equity	$	28,490,231		$	28,235,907		$	30,543,549		$	28,235,907
Preferred shares authorized (par value of $20.00 per share)		50,000			50,000			50,000			50,000
Preferred shares issued and outstanding		—			—			—			—
Common shares authorized (par value of $3.33 per share)		350,000			350,000			350,000			350,000
Common shares issued		87,903			87,903			92,947			87,903
Common shares outstanding		85,710			85,643			90,822			85,643

	Three Months Ended					Three Months Ended				Nine Months Ended
	March 31,					September 30,				September 30,
(in thousands, except per share data)	2019			2018		2019		2018		2019		2018
Interest income:
Loans, including fees	$	238,282		$	205,847	$	243,875	$	224,332	$	725,390	$	645,340
Loans held for sale		253			221		592		268		1,189		784
Securities-taxable		31,139			29,301		32,724		32,482		94,107		92,566
Securities-tax exempt		5,446			5,537		5,058		5,461		15,715		16,488
Short-term investments		1,163			489		915		669		3,424		1,733
Total interest income		276,283			241,395		283,164		263,212		839,825		756,911
Interest expense:
Deposits		46,138			26,959		49,220		34,190		145,201		91,019
Short-term borrowings		8,082			5,351		7,729		11,780		23,658		24,547
Long-term debt		2,809			3,421		3,276		3,048		8,905		9,940
Total interest expense		57,029			35,731		60,225		49,018		177,764		125,506
Net interest income		219,254			205,664		222,939		214,194		662,061		631,405
Provision for loan losses		18,043			12,253		12,421		6,872		38,552		28,016
Net interest income after provision for loan losses		201,211			193,411		210,518		207,322		623,509		603,389
Noninterest income:
Service charges on deposit accounts		20,367			21,448		21,892		21,377		62,982		63,806
Trust fees		15,124			11,335		15,098		16,738		46,126		39,726
Bank card and ATM fees		15,290			14,458		17,154		14,862		49,063		44,784
Investment and annuity fees and insurance commissions		6,528			6,125		7,048		6,652		20,167		19,041
Secondary mortgage market operations		3,726			3,401		5,713		4,333		13,872		11,699
Other income		9,468			9,485		16,325		11,556		40,773		31,546
Total noninterest income		70,503			66,252		83,230		75,518		232,983		210,602
Noninterest expense:
Compensation expense		83,968			80,100		93,858		84,389		265,573		244,374
Employee benefits		19,730			19,874		18,622		18,084		57,240		55,316
Personnel expense		103,698			99,974		112,480		102,473		322,813		299,690
Net occupancy expense		11,984			11,010		13,156		11,895		38,101		35,221
Equipment expense		4,679			3,546		4,685		4,520		13,706		12,328
Data processing expense		19,331			16,449		21,532		20,492		60,951		55,214
Professional services expense		8,168			9,255		17,704		9,555		35,537		32,191
Amortization of intangible assets		5,138			5,618		4,889		5,638		15,074		16,578
Deposit insurance and regulatory fees		5,406			7,948		3,995		8,345		14,156		24,669
Other real estate (income) expense		(991	)		210
Other real estate and foreclosed assets (income) expense							2,055		16		1,459		(63	)
Other expense		18,287			16,781		33,058		18,253		71,024		60,552
Total noninterest expense		175,700			170,791		213,554		181,187		572,821		536,380
Income before income taxes		96,014			88,872		80,194		101,653		283,671		277,611
Income taxes		16,850			16,397		12,387		17,775		48,423		50,081
Net income	$	79,164		$	72,475	$	67,807	$	83,878	$	235,248	$	227,530
Earnings per common share-basic	$	0.91		$	0.83	$	0.77	$	0.96	$	2.69	$	2.62
Earnings per common share-diluted	$	0.91		$	0.83	$	0.77	$	0.96	$	2.69	$	2.61
Dividends paid per share	$	0.27		$	0.24	$	0.27	$	0.27	$	0.81	$	0.75
Weighted average shares outstanding-basic		85,688			85,241		86,377		85,348		85,934		85,298
Weighted average shares outstanding-diluted		85,800			85,423		86,462		85,539		86,010		85,482

	Three Months Ended					Three Months Ended						Nine Months Ended
	March 31,					September 30,						September 30,
(in thousands)	2019		2018			2019			2018			2019			2018
Net income	$	79,164	$	72,475		$	67,807		$	83,878		$	235,248		$	227,530
Other comprehensive income/loss before income taxes:
Net change in unrealized gain/loss on securities available for sale and cash flow hedges		57,243		(62,244	)		34,159			(25,242	)		160,627			(110,895	)
Reclassification of net losses realized and included in earnings		4,219		1,796			3,280			2,547			11,483			6,560
Other valuation adjustments for employee benefit plan							(7,015	)		—			(7,015	)		(9,039	)
Amortization of unrealized net loss on securities transferred to held to maturity		591		755			954			747			2,435			2,427
Other comprehensive income/loss before income taxes		62,053		(59,693	)		31,378			(21,948	)		167,530			(110,947	)
Income tax expense (benefit)		13,853		(13,546	)		7,331			(4,978	)		37,977			(25,170	)
Other comprehensive income/loss net of income taxes		48,200		(46,147	)		24,047			(16,970	)		129,553			(85,777	)
Comprehensive income	$	127,364	$	26,328		$	91,854		$	66,908		$	364,801		$	141,753

										Accumulated
Three Months Ended September 30, 2019 and 2018																									Accumulated
	Common Stock									Other						Common Stock									Other
(in thousands, except per share data)	Shares Issued		Amount		Capital Surplus		Retained Earnings			Comprehensive Loss, Net			Total			Shares Issued		Amount		Capital Surplus		Retained Earnings			Comprehensive Loss, Net			Total
Balance, June 30, 2019																	87,903	$	292,716	$	1,737,492	$	1,363,910		$	(75,203	)	$	3,318,915
Net income																	—		—		—		67,807			—			67,807
Other comprehensive income																	—		—		—		—			24,047			24,047
Comprehensive income																	—		—		—		67,807			24,047			91,854
Cash dividends declared ($0.27 per common share)																	—		—		—		(23,597	)		—			(23,597	)
Common stock issued in business combination																	5,044		16,797		177,052		—			—			193,849
Common stock activity, long-term incentive plan																	—		—		4,407		63			—			4,470
Issuance of stock from dividend reinvestment and stock purchase plans																	—		—		889		—			—			889
Balance, September 30, 2019																	92,947	$	309,513	$	1,919,840	$	1,408,183		$	(51,156	)	$	3,586,380
Balance, June 30, 2018																	87,903	$	292,716	$	1,729,542	$	1,110,506		$	(203,209	)	$	2,929,555
Net income																	—		—		—		83,878			—			83,878
Other comprehensive loss																	—		—		—		—			(16,970	)		(16,970	)
Comprehensive income																	—		—		—		83,878			(16,970	)		66,908
Cash dividends declared ($0.27 per common share)																	—		—		—		(23,512	)		—			(23,512	)
Common stock activity, long-term incentive plan																	—		—		5,053		25			—			5,078
Issuance of stock from dividend reinvestment and stock purchase plans																	—		—		849		—			—			849
Balance, September 30, 2018																	87,903	$	292,716	$	1,735,444	$	1,170,897		$	(220,179	)	$	2,978,878

Nine Months Ended September 30, 2019 and 2018																									Accumulated
																Common Stock									Other
(in thousands, except per share data)																Shares Issued		Amount		Capital Surplus		Retained Earnings			Comprehensive Loss, Net			Total
Balance, December 31, 2018																	87,903	$	292,716	$	1,725,741	$	1,243,592		$	(180,709	)	$	3,081,340
Net income																	—		—		—		235,248			—			235,248
Other comprehensive income																	—		—		—		—			129,553			129,553
Comprehensive income																	—		—		—		235,248			129,553			364,801
Cash dividends declared ($0.81 per common share)																	—		—		—		(70,771	)		—			(70,771	)
Common stock issued in business combination																	5,044		16,797		177,052		—			—			193,849
Common stock activity, long-term incentive plan																	—		—		14,355		114			—			14,469
Issuance of stock from dividend reinvestment and stock purchase plans																	—		—		2,692		—			—			2,692
Balance, September 30, 2019																	92,947	$	309,513	$	1,919,840	$	1,408,183		$	(51,156	)	$	3,586,380
Balance, December 31, 2017		87,903	$	292,716	$	1,718,117	$	1,008,518		$	(134,402	)	$	2,884,949			87,903	$	292,716	$	1,718,117	$	1,008,518		$	(134,402	)	$	2,884,949
Net income		—		—		—		72,475			—			72,475			—		—		—		227,530			—			227,530
Other comprehensive loss		—		—		—		—			(46,147	)		(46,147	)		—		—		—		—			(85,777	)		(85,777	)
Comprehensive income		—		—		—		72,475			(46,147	)		26,328			—		—		—		227,530			(85,777	)		141,753
Cash dividends declared ($0.24 per common share)		—		—		—		(20,881	)		—			(20,881	)
Cash dividends declared ($0.75 per common share)																	—		—		—		(65,287	)		—			(65,287	)
Common stock activity, long-term incentive plan		—		—		4,735		70			—			4,805			—		—		14,832		136			—			14,968
Issuance of stock from dividend reinvestment and stock purchase plans		—		—		837		—			—			837			—		—		2,495		—			—			2,495
Balance, March 31, 2018		87,903	$	292,716	$	1,723,689	$	1,060,182		$	(180,549	)	$	2,896,038

Balance, December 31, 2018		87,903	$	292,716	$	1,725,741	$	1,243,592		$	(180,709	)	$	3,081,340
Net income		—		—		—		79,164			—			79,164
Other comprehensive income		—		—		—		—			48,200			48,200
Comprehensive income		—		—		—		79,164			48,200			127,364
Cash dividends declared ($0.27 per common share)		—		—		—		(23,581	)		—			(23,581	)
Common stock activity, long-term incentive plan		—		—		4,528		45			—			4,573
Issuance of stock from dividend reinvestment and stock purchase plans		—		—		879		—			—			879
Balance, March 31, 2019		87,903	$	292,716	$	1,731,148	$	1,299,220		$	(132,509	)	$	3,190,575
Balance, September 30, 2018																	87,903	$	292,716	$	1,735,444	$	1,170,897		$	(220,179	)	$	2,978,878

	Three Months Ended						Nine Months Ended
	March 31,						September 30,
(in thousands)	2019			2018			2019			2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	79,164		$	72,475		$	235,248		$	227,530
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		7,516			6,551			22,867			19,740
Provision for loan losses		18,043			12,253			38,552			28,016
(Gain) loss on other real estate owned		(991	)		210
(Gain) loss on other real estate and foreclosed assets								852			(313	)
Deferred tax expense		30,829			14,790		��	30,136			20,342
Increase in cash surrender value of life insurance contracts		(3,772	)		(3,346	)		(10,792	)		(6,714	)
Loss on disposal of other assets								70			1,748
Loss on sale of business		—			1,145			—			1,145
Net decrease in loans held for sale		5,714			18,172
Net (increase) decrease in loans held for sale								(46,727	)		10,942
Net amortization of securities premium/discount		7,009			8,453			23,133			25,440
Amortization of intangible assets		5,138			5,618			15,074			16,578
Stock-based compensation expense		5,181			4,883			15,497			14,868
Contribution to pension plan		(100,000	)		—			(100,000	)		—
Decrease in interest payable and other liabilities		(15,478	)		(32,568	)		(44,132	)		(2,662	)
Decrease in payable to FDIC for loan servicing		—			(11,107	)		—			(11,113	)
(Increase) decrease in other assets		(23,335	)		6,821
Increase in other assets								(10,631	)		(15,748	)
Other, net		(1,595	)		144			(2,854	)		299
Net cash provided by operating activities		13,423			104,494			166,293			330,098
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from the sale of securities available for sale								143,334			—
Proceeds from maturities of securities available for sale		55,596			80,155			204,391			253,755
Purchases of securities available for sale		(1,502	)		(142,052	)		(810,198	)		(365,529	)
Proceeds from maturities of securities held to maturity		79,533			93,408			297,150			272,986
Purchases of securities held to maturity		—			(134,020	)		(183,626	)		(375,770	)
Net (increase) decrease in short-term investments		(52,668	)		30,843			383,970			(15,690	)
Proceeds from sales of loans and leases		42,059			12,211			111,141			47,481
Net increase in loans		(148,073	)		(196,328	)		(353,971	)		(706,989	)
Purchase of life insurance contracts								(32,788	)		(1,601	)
Purchases of property and equipment		(12,435	)		(7,904	)		(33,746	)		(32,583	)
Proceeds from sales of property and equipment		115			42
Proceeds from sales of other real estate		4,613			1,641			20,764			10,114
Final cash settlement for acquisition of business		(1,112	)		—
Cash acquired in stock-based business combination								28,060			—
Consideration (paid) received in business combination								(1,112	)		141,769
Proceeds from the sale of business, net of cash sold		—			77,081			—			77,648
Other, net		(8,978	)		(8,915	)		(19,815	)		(50,935	)
Net cash used in investing activities		(42,852	)		(193,838	)		(246,446	)		(745,344	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits		230,109			232,638
Net decrease in short-term borrowings		(200,393	)		(251,793	)
Net decrease in deposits								(229,964	)		(52,709	)
Net increase in short-term borrowings								452,691			572,757
Repayments of long-term debt		(75	)		(5,268	)		(226	)		(90,142	)
Net proceeds from issuance of long-term debt		—			83			11,649			124
Dividends paid		(23,581	)		(20,881	)		(70,771	)		(65,287	)
Payroll tax remitted on net share settlement of equity awards		(688	)		(142	)		(1,594	)		(563	)
Proceeds from exercise of stock options		—			782			367			1,232
Proceeds from dividend reinvestment and stock purchase plans		879			837			2,692			2,495
Net cash provided by (used in) financing activities		6,251			(43,744	)
NET DECREASE IN CASH AND DUE FROM BANKS		(23,178	)		(133,088	)
Net cash provided by financing activities								164,844			367,907
NET INCREASE (DECREASE) IN CASH AND DUE FROM BANKS								84,691			(47,339	)
CASH AND DUE FROM BANKS, BEGINNING		383,372			386,948			383,372			386,948
CASH AND DUE FROM BANKS, ENDING	$	360,194		$	253,860		$	468,063		$	339,609
SUPPLEMENTAL INFORMATION FOR NON-CASH
INVESTING AND FINANCING ACTIVITIES
Value of stock-based consideration in business combination							$	193,849		$	—
Assets acquired in settlement of loans	$	4,273		$	1,305		$	14,170		$	19,542

The consolidated financial statements include the accounts of Hancock Whitney Corporation 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 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, 2018. 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. These changes in presentation did not have a material impact on the Company’s financial condition or operating results.

The accounting principles the Company follows and the methods for applying these principles conform to GAAP and 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.

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, 2018. Refer to Note 16 – Recent Accounting Pronouncements for a discussion of accounting standards adopted during the ~~three~~nine months ended ~~March~~September 30, 2019.

On September 21, 2019, the Company completed the acquisition of MidSouth Bancorp, Inc. (“MidSouth”) (NYSE: MSL), parent company of MidSouth Bank, N.A. The transaction provides the Company opportunity for both enhanced growth in several of its current markets, such as MidSouth’s home market of Lafayette, Louisiana, as well as opportunities for expansion into new markets in Louisiana and Texas. The transaction was accounted for as a business combination whereby the Company acquired net assets with an estimated fair value of $124.6 million and recorded goodwill of $69.2 million. In consideration for the net assets acquired, each outstanding share of MidSouth common stock converted to 0.2952 shares of the Company’s common stock. As such, the Company issued approximately 5.0 million shares resulting in a transaction value of $193.8 million. The following table sets forth the preliminary acquisition date fair value of the assets acquired and liabilities assumed, and the resulting goodwill. The goodwill is not deductible for federal income tax purposes.

The loans acquired were recorded at an estimated fair value at the acquisition date using a loss adjusted cash flow method, with no carryover of the related allowance for loan losses. Acquired loans are classified as either purchased credit performing or purchased credit impaired based on such factors as past due status, nonaccrual status and internal risk rating. Loans considered to be purchased credit performing were accounted for under Accounting Standards Codification (“ASC”) 310-20. The purchased credit performing loans had a book balance of $686.0 million, of which $17.2 million is not expected to be collected, and an estimated fair value of $667.2 million. Loans considered to be purchased credit impaired were accounted for under ASC 310-30 using the expected cash flow method. The purchased credit impaired loans had a book balance of $140.3 million and an estimated fair value of $118.0 million.

The securities available for sale portfolio consisted primarily of collateralized mortgage obligations and mortgaged backed securities. Approximately $143.3 million of the acquired portfolio was sold prior to September 30, 2019, and the Company intends to sell the remainder of the portfolio during the fourth quarter of 2019.

The core deposit intangible asset of $35 million represents the value of the relationships with deposit customers based on the favorable source of funds method. The core deposit intangible will be amortized using sum of years’ digits over the asset’s estimated life of 15 years.

Short-term borrowings consisted of customer repurchase agreements of $39.5 million and 2 FHLB advances totaling $27.5 million. The FHLB advances had 30 day maturities with fixed interest rates of 2.16%.

Long-term debt consists of 3 trust preferred debentures with maturities through 2037; however, each is callable and may be redeemed at the Company’s election. The Company intends to redeem each debenture in full before December 31, 2019.

~~2. Acquisition~~The results of the acquired business were included in the Company’s consolidated results of operations from the date of acquisition. The results of the acquired business are not material to the Company’s consolidated results of operations and, as such, neither supplemental pro forma information of the combined entity nor revenue and earnings contributed by the acquired business since the date of acquisition are presented.

During the three and nine months ended September 30, 2019, the Company incurred acquisition related costs of approximately $28.8 million. The following table presents the acquisition related costs by component:

Personnel expense includes severance and change in control costs. Professional services expense includes legal and consulting costs, including costs associated with systems conversion. Other expense includes contract and lease termination fees and other transaction-related costs.

On July 13, 2018, the Company acquired the bank-managed high net worth individual and institutional investment management and trust business of Capital One, National Association (“Capital One”). The transaction added assets under management of $4 billion and assets under management and administration of $10.4 billion to the Company’s existing trust and asset management business. In addition, the Company assumed approximately $217 million of customer deposit liabilities. The following table sets forth the acquisition date fair value of the assets acquired and the liabilities assumed, the consideration received, and the resulting goodwill. The goodwill is deductible for federal income tax purposes.

Identifiable intangible assets include customer relationships that are being amortized using an accelerated method based on forecasted cash flows over a useful life of approximately 17 years.

The acquired trust and asset management business added $14.8 million in trust fee revenue and $14.0 million of expense to the Company’s results of operations for the nine months ended September 30, 2019. The results are not material to the Company’s results of operations and, as such, supplemental proforma financial information for the nine months ended September 30, 2018 is not presented. During the nine months ended September 30, 2018, the Company incurred acquisition related costs of approximately $5.7 million.

Goodwill represents the excess of the consideration transferred over the fair value of the net assets acquired or excess of the fair value of net liabilities assumed over the consideration received. It is comprised of estimated future economic benefits arising from the transaction that cannot be individually identified or do not qualify for separate recognition. These benefits include expanded presence in existing markets and entry into new

markets, and expected earnings streams and operational efficiencies that the Company believes will result from this business combination. The ~~tax basis of the goodwill is deductible for federal income tax purposes.~~

~~The~~ following table presents the change in the Company’s goodwill during the year ended December 31, 2018 and the ~~three~~nine months ended ~~March 31,~~September 30, 2019.

(in thousands)
Goodwill balance at December 31, 2017	$	745,523		$	745,523
Intital goodwill recorded - acquisition of trust and asset management business		45,634
Initial goodwill recorded - acquisition of trust and asset management business					45,634
Measurement period adjustments - acquisition of trust and asset management business		(185	)		(185	)
Goodwill balance at December 31, 2018	$	790,972		$	790,972
Final settlement of cash consideration - acquisition of trust and asset management business		1,112			1,112
Goodwill balance at March 31, 2019	$	792,084
Initial goodwill recorded - acquisition of MidSouth					69,207
Goodwill balance at September 30, 2019				$	861,291

The acquired trust and asset management business added $4.9 million in trust fee revenue and $4.8 million of expense to the Company’s results of operations for the three months ended March 31, 2019. The results are not material to the Company’s results of operations and, as such, supplemental proforma financial information for the three months ended March 31, 2018 is not presented. During the three months ended March 31, 2018, the Company incurred acquisition related costs of approximately $0.3 million.

The amortized cost, gross unrealized gains and losses, and estimated fair value of securities classified as available for sale and held to maturity at ~~March 31,~~September 30, 2019 and December 31, 2018 follow.

Securities Available for Sale
(in thousands)	March 31, 2019								December 31, 2018								September 30, 2019								December 31, 2018
			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	$	73,426		—		1,283	$	72,143	$	74,339	$	—	$	2,633	$	71,706	$	93,415	$	1,726	$	—	$	95,141	$	74,339	$	—	$	2,633	$	71,706
Municipal obligations		245,707		1,833		1,600		245,940		246,713		360		6,646		240,427		243,941		8,222		—		252,163		246,713		360		6,646		240,427
Residential mortgage-backed securities		1,418,881		9,964		15,813		1,413,032		1,468,912		4,284		29,794		1,443,402		1,321,109		20,598		2,236		1,339,471		1,468,912		4,284		29,794		1,443,402
Commercial mortgage-backed securities		798,447		4,594		15,207		787,834		799,060		1,953		30,936		770,077		1,585,956		39,066		853		1,624,169		799,060		1,953		30,936		770,077
Collateralized mortgage obligations		158,904		1,212		1,485		158,631		163,282		903		2,260		161,925		232,577		2,302		63		234,816		163,282		903		2,260		161,925
Corporate debt securities		3,500		—		—		3,500		3,500		—		—		3,500		3,951		—		54		3,897		3,500		—		—		3,500
	$	2,698,865	$	17,603	$	35,388	$	2,681,080	$	2,755,806	$	7,500	$	72,269	$	2,691,037	$	3,480,949	$	71,914	$	3,206	$	3,549,657	$	2,755,806	$	7,500	$	72,269	$	2,691,037

Securities Held to Maturity
(in thousands)																	September 30, 2019								December 31, 2018
	March 31, 2019								December 31, 2018										Gross		Gross						Gross		Gross
			Gross		Gross						Gross						Amortized		Unrealized		Unrealized		Fair		Amortized		Unrealized		Unrealized		Fair
Securities Held to Maturity	Amortized		Unrealized		Unrealized		Fair		Amortized		Unrealized		Unrealized		Fair
(in thousands)	Cost		Gains		Losses		Value		Cost		Gains		Losses		Value
																	Cost		Gains		Losses		Value		Cost		Gains		Losses		Value
U.S. Treasury and government agency securities	$	50,000		—		317	$	49,683	$	50,000	$	—	$	478	$	49,522	$	50,000	$	—	$	46	$	49,954	$	50,000	$	—	$	478	$	49,522
Municipal obligations		676,651		11,247		1,726		686,172		688,201		2,347		9,503		681,045		647,500		28,613		95		676,018		688,201		2,347		9,503		681,045
Residential mortgage-backed securities		613,964		3,701		3,148		614,517		640,393		1,461		6,117		635,737		549,929		9,226		355		558,800		640,393		1,461		6,117		635,737
Commercial mortgage-backed securities		356,919		1,233		3,780		354,372		357,175		376		10,882		346,669		539,877		20,099		10		559,966		357,175		376		10,882		346,669
Collateralized mortgage obligations		1,198,908		3,285		14,027		1,188,166		1,243,778		1,598		22,493		1,222,883		1,067,756		9,920		2,058		1,075,618		1,243,778		1,598		22,493		1,222,883
	$	2,896,442	$	19,466	$	22,998	$	2,892,910	$	2,979,547	$	5,782	$	49,473	$	2,935,856	$	2,855,062	$	67,858	$	2,564	$	2,920,356	$	2,979,547	$	5,782	$	49,473	$	2,935,856

The following tables present the amortized cost and estimated fair value of debt securities available for sale and held to maturity at ~~March 31,~~September 30, 2019 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.

Debt Securities Available for Sale	Amortized		Fair		Amortized		Fair
(in thousands)	Cost		Value		Cost		Value
Due in one year or less	$	368	$	374	$	6,598	$	6,629
Due after one year through five years		107,225		108,866		1,529,328		1,558,458
Due after five years through ten years		1,184,905		1,175,070		1,569,872		1,606,207
Due after ten years		1,406,367		1,396,770		375,151		378,363
Total available for sale debt securities	$	2,698,865	$	2,681,080	$	3,480,949	$	3,549,657

Debt Securities Held to Maturity	Amortized		Fair		Amortized		Fair
(in thousands)	Cost		Value		Cost		Value
Due in one year or less	$	80,915	$	80,716	$	74,476	$	74,611
Due after one year through five years		67,617		67,418		1,852,708		1,864,562
Due after five years through ten years		1,392,654		1,398,880		927,878		981,183
Due after ten years		1,355,256		1,345,896		—		—
Total held to maturity securities	$	2,896,442	$	2,892,910	$	2,855,062	$	2,920,356

The Company held no0 securities classified as trading at ~~March 31,~~September 30, 2019 and December 31, 2018.

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
March 31, 2019	Losses < 12 months				Losses 12 months or >				Total
Securities Available for Sale
September 30, 2019													Losses < 12 months				Losses 12 months or >				Total
(in thousands)	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
U.S. Treasury and government agency securities	$	-		-		72,143		1,283	$	72,143	$	1,283	$	—	$	—	$	—	$	—	$	—	$	—
Municipal obligations		2,270		40		106,042		1,560		108,312		1,600		—		—		—		—		—		—
Residential mortgage-backed securities		640		6		852,716		15,807		853,356		15,813		2		—		438,339		2,236		438,341		2,236
Commercial mortgage-backed securities		-		-		583,978		15,207		583,978		15,207		108,208		844		15,098		9		123,306		853
Collateralized mortgage obligations		-		-		108,798		1,485		108,798		1,485		613		—		4,091		63		4,704		63
Other debt obligation														1,903		54		—		—		1,903		54
	$	2,910	$	46	$	1,723,677	$	35,342	$	1,726,587	$	35,388	$	110,726	$	898	$	457,528	$	2,308	$	568,254	$	3,206

Available for Sale
Securities Available for Sale
December 31, 2018	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	$	—		—	$	71,706	$	2,633	$	71,706	$	2,633	$	—	$	—	$	71,706	$	2,633	$	71,706	$	2,633
Municipal obligations		41,203		591		170,883		6,054		212,086		6,645		41,203		591		170,883		6,054		212,086		6,645
Residential mortgage-backed securities		305,090		2,485		762,826		27,309		1,067,916		29,794		305,090		2,485		762,826		27,309		1,067,916		29,794
Commercial mortgage-backed securities		96,226		1,851		570,485		29,085		666,711		30,936		96,226		1,851		570,485		29,085		666,711		30,936
Collateralized mortgage obligations		254		1		111,804		2,259		112,058		2,260		254		1		111,804		2,259		112,058		2,260
	$	442,773	$	4,928	$	1,687,704	$	67,340	$	2,130,477	$	72,268	$	442,773	$	4,928	$	1,687,704	$	67,340	$	2,130,477	$	72,268

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
March 31, 2019	Losses < 12 months				Losses 12 months or >				Total
Securities Held to Maturity
September 30, 2019													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	$	—		—	$	49,682	$	317	$	49,682	$	317	$	—		—	$	49,954	$	46	$	49,954	$	46
Municipal obligations		8,750		63		169,931		1,663		178,681		1,726		3,820		30		6,431		65		10,251		95
Residential mortgage-backed securities		—		—		186,221		3,148		186,221		3,148		—		—		122,687		355		122,687		355
Commercial mortgage-backed securities		—		—		312,296		3,780		312,296		3,780		29,101		10		—		—		29,101		10
Collateralized mortgage obligations		—		—		860,183		14,027		860,183		14,027		18,661		65		255,511		1,993		274,172		2,058
	$	8,750	$	63	$	1,578,313	$	22,935	$	1,587,063	$	22,998	$	51,582	$	105	$	434,583	$	2,459	$	486,165	$	2,564
Held to Maturity
December 31, 2018	Losses < 12 months				Losses 12 months or >				Total
			Gross		Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(in thousands)	Value		Losses		Value		Losses		Value		Losses
U.S. Treasury and government agency securities	$	—	$	—	$	49,521	$	478	$	49,521	$	478
Municipal obligations		233,469		2,256		233,280		7,247		466,749		9,503
Residential mortgage-backed securities		90,730		123		235,251		5,994		325,981		6,117
Commercial mortgage-backed securities		—		—		305,419		10,882		305,419		10,882
Collateralized mortgage obligations		77,394		281		897,153		22,212		974,547		22,493
	$	401,593	$	2,660	$	1,720,624	$	46,813	$	2,122,217	$	49,473

The unrealized losses relate primarily to changes in market rates on 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 had adequate liquidity as of ~~March 31,~~September 30, 2019 and December 31, 2018 and did not intend to nor believe that it would be required to sell these securities before recovery of the indicated impairment. Accordingly, the unrealized losses on these securities were determined to be temporary. Should the Company’s intent to sell these securities change, the difference between the amortized cost and the fair value will be recognized into earnings at that time.

Proceeds from the sales of securities were approximately $143.3 million with 0 gross gains or losses during the nine months ended September 30, 2019. There were no sales of securities during the ~~three~~nine months ended ~~March 31, 2019 and~~September 30, 2018.

Securities with carrying values totaling ~~$3.7~~$3.0 billion and $3.4 billion at ~~March 31,~~September 30, 2019 and December 31, 2018, 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, northwest, central and south Louisiana, ~~the Houston,~~East Texas, ~~area,~~ the northern, central, and panhandle regions of Florida, and Nashville, Tennessee. Loans, net of unearned income, by portfolio are presented in the table below.

	March 31,		December 31,		September 30,		December 31,
(in thousands)	2019		2018		2019		2018
Commercial non-real estate	$	8,656,326	$	8,620,601	$	8,893,004	$	8,620,601
Commercial real estate - owner occupied		2,515,428		2,457,748		2,734,379		2,457,748
Total commercial and industrial		11,171,754		11,078,349		11,627,383		11,078,349
Commercial real estate - income producing		2,563,394		2,341,779		3,060,568		2,341,779
Construction and land development		1,340,067		1,548,335		1,190,718		1,548,335
Residential mortgages		2,933,251		2,910,081		3,004,958		2,910,081
Consumer		2,104,372		2,147,867		2,152,325		2,147,867
Total loans	$	20,112,838	$	20,026,411	$	21,035,952	$	20,026,411

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 tangible or intangible business assets such as accounts receivable, inventory, ownership, enterprise value 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 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 tables show activity in the allowance for loan losses by portfolio class for the ~~three~~nine months ended ~~March 31,~~September 30, 2019 and 2018, as well as the corresponding recorded investment in loans at the end of each period.

				Commercial		Total			Commercial																		Commercial			Total			Commercial
	Commercial			real estate-		commercial			real estate-			Construction												Commercial			real estate-			commercial			real estate-			Construction
	non-real			owner		and			income			and land			Residential									non-real			owner			and			income			and land			Residential
(in thousands)	estate			occupied		industrial			producing			development			mortgages			Consumer			Total			estate			occupied			industrial			producing			development			mortgages			Consumer			Total
	Three Months Ended March 31, 2019																							Nine Months Ended September 30, 2019
Allowance for loan losses:
Beginning balance	$	97,752		$	13,757	$	111,509		$	17,638		$	15,647		$	23,782		$	25,938		$	194,514		$	97,752		$	13,757		$	111,509		$	17,638		$	15,647		$	23,782		$	25,938		$	194,514
Charge-offs		(16,344	)		—		(16,344	)		(10	)		—			(406	)		(4,231	)		(20,991	)		(33,382	)		(137	)		(33,519	)		(10	)		(7	)		(660	)		(13,169	)		(47,365	)
Recoveries		1,926			17		1,943			2			11			162			1,004			3,122			5,662			284			5,946			518			108			433			2,866			9,871
Net provision for loan losses		14,186			33		14,219			3,173			(1,631	)		(3	)		2,285			18,043			29,267			545			29,812			7,604			(5,982	)		(2,076	)		9,194			38,552
Ending balance	$	97,520		$	13,807	$	111,327		$	20,803		$	14,027		$	23,535		$	24,996		$	194,688		$	99,299		$	14,449		$	113,748		$	25,750		$	9,766		$	21,479		$	24,829		$	195,572
Ending balance:
Allowance:
Individually evaluated for impairment	$	1,775		$	205	$	1,980		$	143		$	1		$	219		$	347		$	2,690		$	11,535		$	57		$	11,592		$	49		$	29		$	183		$	365		$	12,218
Amounts related to purchased credit impaired loans		288			185		473			35			78			9,162			341			10,089			135			172			307			40			144			8,032			300			8,823
Collectively evaluated for impairment		95,457			13,417		108,874			20,625			13,948			14,154			24,308			181,909			87,629			14,220			101,849			25,661			9,593			13,264			24,164			174,531
Total allowance	$	97,520		$	13,807	$	111,327		$	20,803		$	14,027		$	23,535		$	24,996		$	194,688		$	99,299		$	14,449		$	113,748		$	25,750		$	9,766		$	21,479		$	24,829		$	195,572
Loans:
Individually evaluated for impairment	$	231,506		$	16,974	$	248,480		$	2,668		$	19		$	5,397		$	1,508		$	258,072		$	201,979		$	11,109		$	213,088		$	2,781		$	3,385		$	4,301		$	1,583		$	225,138
Purchased credit impaired loans		6,445			5,472		11,917			4,267			2,897			102,199			3,615			124,895			33,040			45,124			78,164			27,281			23,431			93,450			6,294			228,620
Collectively evaluated for impairment		8,418,375			2,492,982		10,911,357			2,556,459			1,337,151			2,825,655			2,099,249			19,729,871			8,657,985			2,678,146			11,336,131			3,030,506			1,163,902			2,907,207			2,144,448			20,582,194
Total loans	$	8,656,326		$	2,515,428	$	11,171,754		$	2,563,394		$	1,340,067		$	2,933,251		$	2,104,372		$	20,112,838		$	8,893,004		$	2,734,379		$	11,627,383		$	3,060,568		$	1,190,718		$	3,004,958		$	2,152,325		$	21,035,952

				Commercial			Total			Commercial																		Commercial			Total			Commercial
	Commercial			real estate-			commercial			real estate-			Construction												Commercial			real estate-			commercial			real estate-			Construction
	non-real			owner			and			income			and land			Residential									non-real			owner			and			income			and land			Residential
(in thousands)	estate			occupied			industrial			producing			development			mortgages			Consumer			Total			estate			occupied			industrial			producing			development			mortgages			Consumer			Total
	Three Months Ended March 31, 2018																								Nine Months Ended September 30, 2018
Allowance for loan losses:
Beginning balance	$	127,918		$	12,962		$	140,880		$	13,709		$	7,372		$	24,844		$	30,503		$	217,308		$	127,918		$	12,962		$	140,880		$	13,709		$	7,372		$	24,844		$	30,503		$	217,308
Charge-offs		(9,335	)		(851	)		(10,186	)		—			(10	)		(192	)		(8,048	)		(18,436	)		(15,401	)		(7,330	)		(22,731	)		(1,633	)		(265	)		(585	)		(18,599	)		(43,813	)
Recoveries		4,146			88			4,234			63			29			116			1,794			6,236			13,234			282			13,516			221			68			1,854			4,028			19,687
Net provision for loan losses		3,877			1,421			5,298			(787	)		2,533			150			5,059			12,253			(5,073	)		7,203			2,130			6,288			6,248			(1,803	)		15,153			28,016
Reduction as a result of sale of subsidiary		—			—			—			—			—			—			(6,648	)		(6,648	)		—			—			—			—			—			—			(6,648	)		(6,648	)
Ending balance	$	126,606		$	13,620		$	140,226		$	12,985		$	9,924		$	24,918		$	22,660		$	210,713		$	120,678		$	13,117		$	133,795		$	18,585		$	13,423		$	24,310		$	24,437		$	214,550
Ending balance:
Allowance:
Individually evaluated for impairment	$	20,356		$	2,475		$	22,831		$	1,261		$	1		$	276		$	232		$	24,601		$	23,101		$	225		$	23,326		$	285		$	1		$	163		$	131		$	23,906
Amounts related to purchased credit impaired loans		471			495			966			576			173			11,720			612			14,047			327			403		$	730			45			91			10,109			433			11,408
Collectively evaluated for impairment		105,779			10,650			116,429			11,148			9,750			12,922			21,816			172,065			97,250			12,489		$	109,739			18,255			13,331			14,038			23,873			179,236
Total allowance	$	126,606		$	13,620		$	140,226		$	12,985		$	9,924		$	24,918		$	22,660		$	210,713		$	120,678		$	13,117		$	133,795		$	18,585		$	13,423		$	24,310		$	24,437		$	214,550
Loans:
Individually evaluated for impairment	$	323,913		$	30,318		$	354,231		$	14,071		$	113		$	8,338		$	617		$	377,370		$	275,966		$	22,437		$	298,403		$	4,615		$	112		$	3,061		$	890		$	307,081
Purchased credit impaired loans		8,510			8,384			16,894			4,361			5,843			116,409			5,876			149,383			7,907			7,113		$	15,020			3,790			4,232			107,535			4,458			135,035
Collectively evaluated for impairment		8,003,799			2,146,841			10,150,640			2,376,430			1,407,922			2,608,074			2,022,685			18,565,751			8,155,011			2,270,721		$	10,425,732			2,303,294			1,519,075			2,736,320			2,117,180			19,101,601
Total loans	$	8,336,222		$	2,185,543		$	10,521,765		$	2,394,862		$	1,413,878		$	2,732,821		$	2,029,178		$	19,092,504		$	8,438,884		$	2,300,271		$	10,739,155		$	2,311,699		$	1,523,419		$	2,846,916		$	2,122,528		$	19,543,717

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

	March 31,		December 31,		September 30,		December 31,
(in thousands)	2019		2018		2019		2018
Commercial non-real estate	$	126,992	$	110,653	$	150,705	$	110,653
Commercial real estate - owner occupied		14,466		16,895		13,087		16,895
Total commercial and industrial		141,458		127,548		163,792		127,548
Commercial real estate - income producing		4,205		4,991		2,957		4,991
Construction and land development		2,013		2,146		1,336		2,146
Residential mortgages		39,275		35,866		37,901		35,866
Consumer		17,880		16,744		16,874		16,744
Total loans	$	204,831	$	187,295	$	222,860	$	187,295

Nonaccrual loans include nonaccruing loans modified in troubled debt restructurings (“TDRs”) of ~~$105.9~~$101.1 million and $85.5 million at ~~March 31,~~September 30, 2019 and December 31, 2018, respectively. Total TDRs, both accruing and nonaccruing, were ~~$223.4~~$162.0 million at ~~March 31,~~September 30, 2019 and $224.6 million at December 31, 2018. All TDRs are individually evaluated for impairment. At ~~March 31,~~September 30, 2019 and December 31, 2018, the Company had unfunded commitments of ~~$8.5~~$2.0 million and $2.1 million, respectively, to borrowers whose loan terms have been modified in a TDR.

The tables below detail by portfolio class TDRs that were modified during the three and nine months ended ~~March 31,~~September 30, 2019 and 2018:

	Three Months Ended												Three Months Ended
($ in thousands)	March 31, 2019						March 31, 2018						September 30, 2019						September 30, 2018
			Pre- Modification		Post- Modification				Pre- Modification		Post- Modification				Pre- Modification		Post- Modification				Pre- Modification		Post- Modification
	Number		Outstanding		Outstanding		Number		Outstanding		Outstanding		Number		Outstanding		Outstanding		Number		Outstanding		Outstanding
	of		Recorded		Recorded		of		Recorded		Recorded		of		Recorded		Recorded		of		Recorded		Recorded
Troubled Debt Restructurings:	Contracts		Investment		Investment		Contracts		Investment		Investment		Contracts		Investment		Investment		Contracts		Investment		Investment
Commercial non-real estate		7	$	13,803	$	13,803		13	$	55,482	$	55,482		2	$	13,083	$	6,271		11	$	23,347	$	23,347
Commercial real estate - owner occupied		1		167		167		1		5,909		5,909		—		—		—		1		229		229
Total commercial and industrial		8		13,970		13,970		14		61,391		61,391		2		13,083		6,271		12		23,576		23,576
Commercial real estate - income producing		—		—		—		1		1,564		1,564		1		123		123		—		—		—
Construction and land development		—		—		—		1		43		43		3		323		323		—		—		—
Residential mortgages		5		1,264		1,264		—		—		—		3		297		297		8		930		930
Consumer		2		46		46		1		222		222		4		70		70		6		89		89
Total loans		15	$	15,280	$	15,280		17	$	63,220	$	63,220		13	$	13,896	$	7,084		26	$	24,595	$	24,595

The TDRs modified during the ~~three~~nine months ended ~~March 31,~~September 30, 2019 reflected in the table above include ~~$0.1~~$0.6 million of loans with extended amortization terms or other payment concessions, ~~$8.8~~$22.1 million with significant covenant waivers and ~~$6.4~~$7.4 million with other modifications. In addition, the Company received approximately $6.8 million of equity securities of one commercial non-real estate borrower in satisfaction of a portion of its debt. The TDRs modified during the ~~three~~nine months ended ~~March 31,~~September 30, 2018 include ~~$48.4~~$50.7 million of loans with extended amortization terms or other payment concessions, $14.6 million with significant covenant waivers and ~~$0.2~~$29.1 million with other modifications.

There were no0 defaults on loans during the three and nine months ended ~~March 31,~~September 30, 2019 or 2018 that had been modified in a TDR during the prior twelve months.

The tables below present loans that are individually evaluated for impairment disaggregated by portfolio class at ~~March 31,~~September 30, 2019 and December 31, 2018. Loans individually evaluated for impairment include TDRs and loans that are determined to be impaired and have aggregate relationship balances of $1 million or more.

	March 31, 2019								September 30, 2019
(in thousands)	Recorded investment without an allowance		Recorded investment with an allowance		Unpaid principal balance		Related allowance		Recorded investment without an allowance		Recorded investment with an allowance		Unpaid principal balance		Related allowance
Commercial non-real estate	$	158,767	$	72,739	$	278,392	$	1,775	$	161,275	$	40,704	$	239,506	$	11,535
Commercial real estate - owner occupied		10,442		6,532		20,888		205		9,183		1,926		15,087		57
Total commercial and industrial		169,209		79,271		299,280		1,980		170,458		42,630		254,593		11,592
Commercial real estate - income producing		1,130		1,538		3,403		143		1,222		1,559		3,793		49
Construction and land development		-		19		20		1		3,121		264		4,123		29
Residential mortgages		3,630		1,767		5,942		219		2,665		1,636		4,831		183
Consumer		471		1,037		1,753		347		494		1,089		1,864		365
Total loans	$	174,440	$	83,632	$	310,398	$	2,690	$	177,960	$	47,178	$	269,204	$	12,218

The tables below present the average balances and interest income for total impaired loans for the three and nine months ended ~~March 31,~~September 30, 2019 and 2018. Interest income recognized represents interest on accruing loans modified in a TDR.

	Three Months Ended								Three Months Ended
	March 31, 2019				March 31, 2018				September 30, 2019				September 30, 2018
(in thousands)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Commercial non-real estate	$	235,445	$	1,696	$	295,897	$	1,586	$	213,291	$	1,062	$	283,519	$	2,275
Commercial real estate - owner occupied		19,320		80		25,905		66		14,439		45		24,702		90
Total commercial and industrial		254,765		1,776		321,802		1,652		227,730		1,107		308,221		2,365
Commercial real estate - income producing		2,685		7		14,801		25		2,331		7		6,718		15
Construction and land development		70		—		238		—		1,702		2		113		—
Residential mortgages		4,637		5		9,489		5		4,195		2		3,397		4
Consumer		1,258		16		955		9		1,552		21		745		10
Total loans	$	263,415	$	1,804	$	347,285	$	1,691	$	237,510	$	1,139	$	319,194	$	2,394

The tables below present the age analysis of past due loans by portfolio class at ~~March 31,~~September 30, 2019 and December 31, 2018. Purchased credit impaired loans accounted for in pools with an accretable yield are considered to be current.

March 31, 2019	30-59 days past due		60-89 days past due		Greater than 90 days past due		Total past due		Current		Total Loans		Recorded investment > 90 days and still accruing
September 30, 2019															30-59 days past due		60-89 days past due		Greater than 90 days past due		Total past due		Current		Total Loans		Recorded investment > 90 days and still accruing
(in thousands)
Commercial non-real estate	$	19,036	$	2,527	$	69,249	$	90,812	$	8,565,514	$	8,656,326	$	13,920	$	29,770	$	19,786	$	56,767	$	106,323	$	8,786,681	$	8,893,004	$	2,928
Commercial real estate - owner occupied		4,543		561		16,336		21,440		2,493,988		2,515,428		3,937		5,222		909		14,635	$	20,766		2,713,613		2,734,379		2,837
Total commercial and industrial		23,579		3,088		85,585		112,252		11,059,502		11,171,754		17,857		34,992		20,695		71,402		127,089		11,500,294		11,627,383		5,765
Commercial real estate - income producing		6,124		-		5,854		11,978		2,551,416		2,563,394		1,876		817		473		2,751		4,041		3,056,527		3,060,568		—
Construction and land development		8,328		186		1,757		10,271		1,329,796		1,340,067		721		550		77		1,076		1,703		1,189,015		1,190,718		644
Residential mortgages		39,534		8,045		19,299		66,878		2,866,373		2,933,251		679		5,650		11,140		21,964		38,754		2,966,204		3,004,958		576
Consumer		15,738		4,120		9,225		29,083		2,075,289		2,104,372		660		14,598		4,730		9,434		28,762		2,123,563		2,152,325		887
Total	$	93,303	$	15,439	$	121,720	$	230,462	$	19,882,376	$	20,112,838	$	21,793	$	56,607	$	37,115	$	106,627	$	200,349	$	20,835,603	$	21,035,952	$	7,872

The following tables present the credit quality indicators by segments and portfolio class of loans at ~~March 31,~~September 30, 2019 and December 31, 2018.

	March 31, 2019												September 30, 2019
(in thousands)	Commercial non-real estate		Commercial real estate - owner- occupied		Total commercial and industrial		Commercial real estate - income producing		Construction and land development		Total commercial		Commercial non-real estate		Commercial real estate - owner- occupied		Total commercial and industrial		Commercial real estate - income producing		Construction and land development		Total commercial
Grade:
Pass	$	8,028,706	$	2,342,948	$	10,371,654	$	2,450,517	$	1,319,519	$	14,141,690	$	8,193,707	$	2,498,260	$	10,691,967	$	2,941,146	$	1,149,268	$	14,782,381
Pass-Watch		166,406		91,434		257,840		81,718		9,743		349,301		209,523		132,611		342,134		64,280		30,455	$	436,869
Special Mention		62,830		16,159		78,989		10,760		890		90,639		84,741		18,697		103,438		15,409		81	$	118,928
Substandard		398,384		64,887		463,271		20,399		9,915		493,585		405,025		84,811		489,836		39,733		10,914	$	540,483
Doubtful		—		—		—		—		—		—		8		—		8		—		—	$	8
Total	$	8,656,326	$	2,515,428	$	11,171,754	$	2,563,394	$	1,340,067	$	15,075,215	$	8,893,004	$	2,734,379	$	11,627,383	$	3,060,568	$	1,190,718	$	15,878,669

	March 31, 2019						December 31, 2018						September 30, 2019						December 31, 2018
(in thousands)	Residential mortgage		Consumer		Total		Residential mortgage		Consumer		Total		Residential mortgage		Consumer		Total		Residential mortgage		Consumer		Total
Performing	$	2,893,635	$	2,085,456	$	4,979,091	$	2,873,669	$	2,130,395	$	5,004,064	$	2,966,578	$	2,134,360	$	5,100,938	$	2,873,669	$	2,130,395	$	5,004,064
Nonperforming		39,616		18,916		58,532		36,412		17,472		53,884		38,380		17,965	$	56,345		36,412		17,472		53,884
Total	$	2,933,251	$	2,104,372	$	5,037,623	$	2,910,081	$	2,147,867	$	5,057,948	$	3,004,958	$	2,152,325	$	5,157,283	$	2,910,081	$	2,147,867	$	5,057,948

Changes in the carrying amount of purchased credit impaired loans and related accretable yield are presented in the following table for the ~~three~~nine months ended ~~March 31,~~September 30, 2019 and the year ended December 31, 2018.

	March 31, 2019						December 31, 2018						September 30, 2019						December 31, 2018
(in thousands)	Carrying Amount of Loans			Accretable Yield			Carrying Amount of Loans			Accretable Yield			Carrying Amount of Loans			Accretable Yield			Carrying Amount of Loans			Accretable Yield
Balance at beginning of period	$	129,596		$	37,294		$	153,403		$	62,517		$	129,596		$	37,294		$	153,403		$	62,517
Additions														118,047			6,238			—			—
Payments received, net		(8,286	)		(1,100	)		(39,556	)		(5,779	)		(28,846	)		(3,517	)		(39,556	)		(5,779	)
Accretion		3,584			(3,584	)		15,749			(15,749	)		9,823			(9,823	)		15,749			(15,749	)
Decrease in expected cash flows based on actual cash flows and changes in cash flow assumptions		—			(872	)		—			(3,695	)
Increase in expected cash flows based on actual cash flows and changes in cash flow assumptions														—			4,190			—			(3,695	)
Balance at end of period	$	124,894		$	31,738		$	129,596		$	37,294		$	228,620		$	34,382		$	129,596		$	37,294

Included in loans are ~~$7.3~~$8.9 million and $7.1 million of consumer loans secured by single family residential real estate that are in process of foreclosure as of ~~March 31,~~September 30, 2019 and December 31, 2018, 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, the Company also held ~~$2.2~~$2.7 million and $1.8 million of foreclosed single family residential properties in other real estate owned at ~~March 31,~~September 30, 2019 and December 31, 2018, respectively.

Effective January 1, 2019, the Company adopted the amended provisions of Financial Accounting Standards Codification Topic 842, “Leases,” using the modified retrospective approach, impacting the reporting and disclosures for operating leases. The core principle of Topic 842 is that a lessee should recognize in the statement of financial position a liability representing the present value of future lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset over the lease term, as well as the disclosure of key information about operating leasing arrangements.

The Company has amended its accounting policy related to leases to comply with the new standard as follows. The Company determines if an arrangement is a lease at inception of the contract and assesses the appropriate classification as finance or operating. Operating leases with terms greater than one year are included in right-of-use lease assets and lease obligations on the Company’s balance sheets. The lease term includes payments to be made in optional or renewal periods only if the lessee is reasonably certain to exercise an option to extend the lease or not to exercise an option to terminate the lease. Right-of-use assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term using the interest rate implicit in the contract, when available, or the Company’s incremental collateralized borrowing rate with similar terms. Agreements with both lease and non-lease components are accounted for separately, with only the lease component capitalized. The right-of-use asset is the amount of the lease liability adjusted for prepaid or accrued lease payments, remaining balance of any lease incentives received, unamortized initial direct costs, and impairment. Lease expense is recorded on a straight-line basis over the lease term through amortization of the right-of-use asset plus implicit interest accreted on the operating lease liability obligation, and is reflected in Net Occupancy Expense in the Consolidated Statement of Income.

Some of the Company’s leases contain variable components, such as annual changes to rent based on the consumer price index. Operating lease liabilities are not re-measured as a result of changes to variable components unless the lease must be re-measured for some other reason such as a renewal that was not reasonably certain of being exercised. Changes to the variable components are treated as variable lease payments and recognized in the period in which the obligation for those payments was incurred.

The standard provides several practical expedients available for use in transition. The Company elected to use the standard’s “package of practical expedients,” which allows the use of previous conclusions about lease identification, lease classification and the accounting treatment for initial direct costs. The Company also elected the short-term lease recognition exemption for all leases with lease terms of one year or less; as such, the Company will not recognize right-of-use assets or lease liabilities on the consolidated balance sheet for such leases. The Company valued its lease obligation using incremental collateralized borrowing rates as of January 1, 2019 for the remaining term of each identified lease. At adoption, the Company recorded a right-of-use asset totaling $115.9 million and a liability for lease payment obligations totaling $130.7 million, offset by the elimination of $14.8 million of existing lease incentive and other deferred rent liabilities. Accounting for leases in accordance with Topic 842 has not had a material impact upon the Company’s consolidated results of operations, and is not expected to in future periods.

The Company has operating leases on a number of its branches, certain regional headquarters and other properties to limit its exposure to ownership risks such as fluctuations in real estate prices and obsolescence. The Company leases real estate with lease terms generally from five to 20 years, some of which have renewal options from one to 20 years. As these extension options are not generally considered reasonably certain of renewal, they are not included in the lease term. The Company is not a lessee in any contracts classified as finance leases.

(dollars in thousands)	Three months ended March 31, 2019			Three months ended September 30, 2019		Nine months ended September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities for operating leases	$	4,007		$	3,922	$	11,802
Right of use assets obtained in exchange for lease liabilities	$	116,618		$	3,343	$	121,066

	March 31, 2019					September 30, 2019
Weighted average remaining lease term (in years)		13.12					13.09
Weighted average discount rate		3.56	%				3.53	%

The following table sets forth the maturities of the Company’s lease liabilities and the present value discount at ~~March 31,~~September 30, 2019.

(in thousands)
(dollars in thousands)
2019	$	12,198		$	4,309
2020		15,421			16,543
2021		14,587			15,846
2022		14,391			15,449
2023		13,109			13,903
Thereafter		95,414			102,110
Total	$	165,120			168,160
Present value discount		(36,626	)		(37,083	)
Lease liability	$	128,494		$	131,077

The following table sets forth the components of the Company’s lease expense for the three and nine months ended ~~March 31,~~September 30, 2019.

(in thousands)				Three months ended September 30, 2019			Nine months ended September 30, 2019
Operating lease expense	$	4,253		$	4,286		$	12,783
Short-term lease expense		19			109			148
Variable lease expense		12			11			35
Sublease income		(116	)		(70	)		(246	)
Total	$	4,168		$	4,336		$	12,720

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 ~~$478.3~~$545.9 million and $428.6 million at ~~March 31,~~September 30, 2019 and December 31, 2018, 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~~associated with fixed rate brokered deposits, certain investment securities and select pools of variable rate ~~loans and fixed rate brokered deposits.~~loans. 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 at ~~March 31,~~September 30, 2019 and December 31, 2018.

		March 31, 2019								December 31, 2018									September 30, 2019								December 31, 2018
				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	$	975,000	$	9,765		$	4,899		$	875,000	$	3,954		$	9,173
Interest rate swaps	Fair Value		388,110		—			960			483,110		—			2,089
Interest rate swaps - variable rate loans																		Cash Flow	$	1,075,000	$	31,453		$	—		$	875,000	$	3,954		$	9,173
Interest rate swaps - securities																		Fair Value		441,400		—			7,872			—		—			—
Interest rate swaps - brokered deposits																		Fair Value		163,110		—			80			483,110		—			2,089
			1,363,110		9,765			5,859			1,358,110		3,954			11,262				1,679,510		31,453			7,952		$	1,358,110	$	3,954		$	11,262
Derivatives not designated as hedging instruments:
Interest rate swaps ⁽²⁾	N/A		1,373,378		28,570			30,506			1,277,404		23,670			24,669		N/A		1,726,248		70,701			72,804		$	1,277,404	$	23,670		$	24,669
Risk participation agreements	N/A		169,317		10			162			171,222		10			131		N/A		237,081		38			60			171,222		10			131
Forward commitments to sell residential mortgage loans	N/A		82,845		21			607			77,208		110			664		N/A		151,413		335			649			77,208		110			664
Interest rate-lock commitments on residential mortgage loans	N/A		69,931		493			1			59,119		464			67		N/A		78,769		240			149			59,119		464			67
Foreign exchange forward contracts	N/A		39,029		482			448			37,749		751			718		N/A		73,076		735			692			37,749		751			718
Visa Class B derivative contract	N/A		43,753		—			6,953			43,753		—			7,304		N/A		43,753		—			6,249			43,753		—			7,304
			1,778,253		29,576			38,677			1,666,455		25,005			33,553				2,310,340		72,049			80,603			1,666,455		25,005			33,553
Total derivatives		$	3,141,363	$	39,341		$	44,536		$	3,024,565	$	28,959		$	44,815			$	3,989,850	$	103,502		$	88,555		$	3,024,565	$	28,959		$	44,815
Less: netting adjustment ⁽³⁾					(13,514	)		(26,407	)				(11,979	)		(22,588	)					(31,598	)		(65,088	)				(11,979	)		(22,588	)
Total derivative assets/liabilities				$	25,827		$	18,129				$	16,980		$	22,227					$	71,904		$	23,467				$	16,980		$	22,227

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. During the ~~three~~nine months ended ~~March 31,~~September 30, 2018, the Company terminated ~~five~~5 of its shorter-term swap agreements with notional amounts totaling $450 million and entered into ~~five~~5 longer-term agreements with notional amounts totaling $450 million. The Company paid termination fees of approximately $10.6 million to settle the interest rate swap liabilities, and the resulting accumulated other comprehensive loss is being amortized over the remaining maturities of the designated instruments. Amortization of other comprehensive loss on terminated cash flow hedges totaled ~~$1.4~~$3.4 million and ~~$1.0~~$4.1 million for the ~~three~~nine months ended ~~March 31,~~September 30, 2019 and ~~2018, respectively.~~2018. The notional amounts of the swap agreements in place at ~~March 31,~~September 30, 2019 expire as follows: $50 million in 2021; $475 million in 2022; ~~$350~~$450 million in 2023; and $100 million in 2024.

The Company enters 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 increases, but the value of the interest rate swaps 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.

~~Table~~In the third quarter of ~~Contents~~2019, the Company executed multiple forward starting fixed payer swaps to convert the latter portion of pools of available for sale securities to a floating rate. These instruments were designated as last-of-layer fair value hedges against the select closed pools of prepayable commercial mortgage backed securities. This strategy provides the Company with a fixed rate coupon during the front end unhedged tenor of the bonds and results in a floating rate security during the back end hedged tenor, with hedged start dates between August 2023 through August 2024 and maturity dates from January 2028 through January 2029. In accordance with ASC 815, an entity may exclude prepayment risk when measuring the change in fair value of the hedged item attributable to interest rate risk under the last-of-layer approach. The fair value of the hedged item attributable to interest rate risk will be presented in interest income along with the change in the fair value of the hedging instrument.

At September 30, 2019, the amortized cost basis of the closed portfolio of prepayable commercial mortgage backed securities totaled $499.2 million. The amount that represents the hedged items was $441.4 million and the basis adjustment associated with the hedged items totaled $7.9 million.

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 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.

The Company is a member of Visa USA. During the fourth quarter of 2018, the Company sold the majority of its Visa Class B holdings, at which time it entered into a derivative agreement with the purchaser whereby the Company will make or receive cash payments whenever the conversion ratio of the Visa Class B shares into Visa Class A shares is adjusted. The conversion ratio changes when Visa deposits funds to a litigation escrow account established by Visa to pay settlements for certain litigation, for which Visa is indemnified by Visa USA members. The Company is also required to make periodic financing payments to the purchaser until all of Visa’s covered litigation matters are resolved. Thus, the derivative contract extends until the end of Visa’s covered litigation matters, the timing of which is uncertain.

The contract includes a contingent accelerated termination clause based on the credit ratings of the Company. At ~~March 31,~~September 30, 2019 and December 31, 2018 the fair value of the liability associated with this contract was ~~$6.9~~$6.2 million and $7.3 million, respectively. Refer to Note 15 – Fair Value of Financial Instruments for discussion of the valuation inputs for this derivative liability.

The effects of derivative instruments on the consolidated statements of income for the three and nine months ended ~~March 31,~~September 30, 2019 and 2018 are presented in the table below. For the three and nine months ended ~~March 31,~~September 30, 2019 and 2018, the reduction of interest income attributable to cash flow hedges includes amortization of accumulated other comprehensive loss that resulted from termination of five interest rate swap contracts.

		Three Months Ended							Three Months Ended						Nine Months Ended
		March 31,							September 30,						September 30,
Derivative Instruments:	Location of Gain (Loss) Recognized in the Statement of Income:	2019			2018			Location of Gain (Loss) Recognized in the Statement of Income:	2019			2018			2019			2018
Interest rate swaps - cash flow hedges	Interest income	$	(2,016	)	$	(618	)
Interest rate swaps - fair value hedges	Interest expense		(988	)		(126	)
Interest rate swaps designated as hedges:
Cash flow hedges - variable rate loans								Interest income	$	(956	)	$	(1,276	)	$	(4,632	)	$	(2,841	)
Fair value hedges - securities								Interest income		15			—			15			—
Fair value hedges - brokered deposits								Interest expense		(243	)		(725	)		(1,692	)		(1,371	)
All other instruments	Other noninterest income		809			1,523		Other noninterest income		4,324			1,363			8,733			4,474
Total		$	(2,195	)	$	779			$	3,140		$	(638	)	$	2,424		$	262

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. At ~~March 31,~~September 30, 2019, the Company was not in violation of any such provisions.

The Bank’s derivative instruments with 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. Offsetting information in regards to all derivative assets and liabilities, including accrued interest, subject to these master netting agreements at ~~March 31,~~September 30, 2019 and December 31, 2018 is presented in the following tables.

(in thousands)			Gross Amounts			Net Amounts		Gross Amounts Not Offset in the Statement of Income									Gross Amounts			Net Amounts		Gross Amounts Not Offset in the Statement of Income
Description	Gross Amounts Recognized		Offset in the Statement of Income			Presented in the Statement of Income		Financial Instruments		Cash Collateral		Net Amount			Gross Amounts Recognized		Offset in the Statement of Income			Presented in the Statement of Income		Financial Instruments		Cash Collateral		Net Amount
As of March 31, 2019
As of September 30, 2019
Derivative Assets	$	17,165	$	(15,439	)	$	1,726	$	1,726	$	—	$	—		$	32,718	$	(32,694	)	$	24	$	24			$	—
Derivative Liabilities	$	30,630	$	(26,032	)	$	4,598	$	1,726	$	6,986	$	(4,114	)	$	79,900	$	(65,280	)	$	14,620	$	24	$	37,657	$	(23,061	)

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

Common shares outstanding excludes treasury shares totaling 0.8 million at September 30, 2019 and 0.9 million at ~~March 31, 2019 and~~ December 31, 2018, with a first-in-first-out cost basis of ~~$16.6~~$14.9 million and $18.5 million at ~~March 31,~~September 30, 2019 and December 31, 2018, respectively. Shares outstanding also excludes unvested restricted share awards totaling 1.3 million at ~~March 31,~~September 30, 2019 and December 31, 2018.

On September 20, 2019, the Company issued approximately 5.0 million shares of common stock at $38.42 as consideration in its acquisition of MidSouth. Refer to Note 2 – Business Combinations for further information.

On May 24, 2018, the Company’s board of directors approved a stock buyback program ~~that~~whereby the Company was authorized ~~the~~to repurchase of up to 5%, or ~~approximately~~ 4.3 million shares, of its ~~outstanding~~85.3 million shares common ~~stock.~~stock then outstanding. The program was set to expire on December 31, 2019. Under this program, 200,000 shares of the Company’s common stock were repurchased at an average price of $41.30 per share.

On September 23, 2019, the Company’s board of directors approved a new amended stock buyback program that authorizes the Company to repurchase up to 5.5 million shares of its common stock through the expiration date of December 31, 2020. The program, as amended, allows the Company to repurchase its common shares ~~either~~ in the open market, ~~in compliance with Rule 10b-18 promulgated under the Securities Exchange Act of 1934, as amended, or~~by block purchase, through accelerated share repurchase programs, in privately negotiated transactions, ~~with non-affiliated sellers~~ or as otherwise determined by the Company in one or more ~~transactions, from time to time until December 31, 2019.~~transactions. The Company is not obligated to purchase any shares under this program, and the board of directors may terminate or amend the program at any time prior to the expiration date. AsRefer to Note 17 – Subsequent Event for information about the accelerated share repurchase agreement the Company entered into subsequent to the balance sheet date.

The components of Accumulated Other Comprehensive Loss and changes in those components are presented in the following table.

	Available for Sale Securities			HTM Securities Transferred from AFS			Employee Benefit Plans			Cash Flow Hedges			Equity Method Investment		Total			Available for Sale Securities			HTM Securities Transferred from AFS			Employee Benefit Plans			Cash Flow Hedges			Equity Method Investment			Total
(in thousands)
Balance, December 31, 2017	$	(29,512	)	$	(14,585	)	$	(79,078	)	$	(11,227	)	$	—	$	(134,402	)	$	(29,512	)	$	(14,585	)	$	(79,078	)	$	(11,227	)	$	—		$	(134,402	)
Other comprehensive income/loss before income taxes:
Net change in unrealized loss		(55,114	)		—			—			(7,130	)		—		(62,244	)		(92,477	)		—			—			(18,418	)		—			(110,895	)
Reclassification of net loss realized and included in earnings		—			—			1,177			619			—		1,796			—			—			3,719			2,841			—			6,560
Other Valuation adjustments for employee benefit plan																			—			—			(9,039	)		—			—			(9,039	)
Amortization of unrealized net loss on securities transferred to HTM		—			755			—			—			—		755			—			2,427			—			—			—			2,427
Income tax expense (benefit)		(12,508	)		171			267			(1,476	)		—		(13,546	)		(20,985	)		550			(1,205	)		(3,530	)		—			(25,170	)
Balance, March 31, 2018	$	(72,118	)	$	(14,001	)	$	(78,168	)	$	(16,262	)	$	—	$	(180,549	)
Balance, September 30, 2018																		$	(101,004	)	$	(12,708	)	$	(83,193	)	$	(23,274	)	$	—		$	(220,179	)
Balance, December 31, 2018	$	(50,125	)	$	(12,044	)	$	(110,247	)	$	(8,293	)	$	—	$	(180,709	)	$	(50,125	)	$	(12,044	)	$	(110,247	)	$	(8,293	)	$	—		$	(180,709	)
Other comprehensive income (loss) before income taxes:
Net change in unrealized gain or loss		46,984			—			—			9,475			784		57,243			125,589			—			—			35,472			(434	)		160,627
Reclassification of net loss realized and included in earnings		—			—			2,203			2,016			—		4,219			—			—			6,851			4,632			—			11,483
Valuation adjustment employee benefit plan																			—			—			(7,015	)		—			—			(7,015	)
Amortization of unrealized net loss on securities transferred to HTM		—			591			—			—			—		591			—			2,435			—			—			—			2,435
Income tax expense		10,623			134			498			2,598			—		13,853
Balance, March 31, 2019	$	(13,764	)	$	(11,587	)	$	(108,542	)	$	600		$	784	$	(132,509	)
Income tax expense (benefit)																			28,395			551			(37	)		9,068			—			37,977
Balance, September 30, 2019																		$	47,069		$	(10,160	)	$	(110,374	)	$	22,743		$	(434	)	$	(51,156	)

Accumulated Other Comprehensive Income or Loss (“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”), including the Company’s share of unrealized gains and losses reported by a partnership accounted for under the equity method, 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 and 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 or losses on the cash flow hedge of the variable rate loans described in Note 7 will be reclassified into income over the life of the hedge. Accumulated other comprehensive loss resulting from the terminated interest rate

swaps will be amortized over the remaining maturities of the designated instruments. Gains and losses within AOCI are net of deferred income taxes, where applicable.

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

	Three Months Ended							Nine Months
Amount reclassified from AOCI (a)	March 31,						Affected line item on	September 30,						Affected line item on
(in thousands)	2019			2018			the statement of income	2019			2018			the statement of income
Amortization of unrealized net loss on securities transferred to HTM	$	(591	)	$	(755	)	Interest income	$	(2,435	)	$	(2,427	)	Interest income
Tax effect		134			171		Income taxes		551			550		Income taxes
Net of tax		(457	)		(584	)	Net income		(1,884	)		(1,877	)	Net income
Amortization of defined benefit pension and post-retirement items		(2,203	)		(1,177	)	Other noninterest expense (b)		(6,851	)		(3,719	)	Other noninterest expense (b)
Tax effect		498			267		Income taxes		1,546			842		Income taxes
Net of tax		(1,705	)		(910	)	Net income		(5,305	)		(2,877	)	Net income
Reclassification of unrealized gain (loss) on cash flow hedges		(610	)		336		Interest income		(1,200	)		1,264		Interest income
Tax effect		138			(76	)	Income taxes		271			(286	)	Income taxes
Net of tax		(472	)		260		Net income		(929	)		978		Net income
Amortization of loss on terminated cash flow hedges		(1,406	)		(954	)	Interest income		(3,432	)		(4,105	)	Interest income
Tax effect		318			216		Income taxes		776			930		Income taxes
Net of tax		(1,088	)		(738	)	Net income		(2,656	)		(3,175	)	Net income
Total reclassifications, net of tax	$	(3,722	)	$	(1,972	)	Net income	$	(10,774	)	$	(6,951	)	Net income

	Three Months Ended					Three Months Ended				Nine Months Ended
	March 31,					September 30,				September 30,
(in thousands)	2019		2018			2019		2018		2019		2018
Income from bank-owned life insurance	$	3,265	$	3,070		$	4,147	$	3,100	$	11,495	$	9,283
Credit related fees		2,595		2,722			2,988		2,762		8,520		7,900
Income from derivatives		809		1,523			4,324		1,363		8,733		4,474
Gain (loss) on sales of assets		397		(1,207	)		205		989		636		(177	)
Other miscellaneous		2,402		3,377			4,661		3,342		11,389		10,066
Total other noninterest income	$	9,468	$	9,485		$	16,325	$	11,556	$	40,773	$	31,546

	Three Months Ended						Three Months Ended						Nine Months Ended
	March 31,						September 30,						September 30,
(in thousands)	2019			2018			2019			2018			2019			2018
Advertising	$	3,080		$	2,526		$	5,435		$	2,553		$	11,768		$	8,596
Corporate value and franchise taxes		4,042			3,440			4,109			3,718			12,366			10,735
Telecommunications and postage								3,610			3,598			10,439			11,063
Entertainment and contributions								2,765			2,539			8,215			8,250
Printing and supplies		1,169			1,286			1,459			1,287			3,720			4,261
Telecommunications and postage		3,466			3,850
Travel expense		1,098			1,066			1,172			1,365			3,614			3,872
Entertainment and contributions		2,708			2,518
Tax credit investment amortization		1,138			874			1,286			1,560			3,658			3,309
Other retirement expense		(4,105	)		(4,463	)		(4,152	)		(4,664	)		(12,409	)		(13,585	)
Loss on restructuring of bank-owned life insurance contracts								—			—			—			3,240
Other miscellaneous		5,691			5,684			17,374			6,297			29,653			20,811
Total other noninterest expense	$	18,287		$	16,781		$	33,058		$	18,253		$	71,024		$	60,552

expenses associated with the MidSouth acquisition, such as contract and lease termination fees, and other transaction related costs.

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 nonvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents.

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

	Three Months Ended				Three Months Ended				Nine Months Ended
	March 31,				September 30,				September 30,
(in thousands, except per share data)	2019		2018		2019		2018		2019		2018
Numerator:
Net income to common shareholders	$	79,164	$	72,475	$	67,807	$	83,878	$	235,248	$	227,530
Net income allocated to participating securities - basic and diluted		1,337		1,366		1,141		1,544		3,980		4,238
Net income allocated to common shareholders - basic and diluted	$	77,827	$	71,109	$	66,666	$	82,334	$	231,268	$	223,292
Denominator:
Weighted-average common shares - basic		85,688		85,241		86,377		85,348	$	85,934	$	85,298
Dilutive potential common shares		112		182		85		191		76		184
Weighted-average common shares - diluted		85,800		85,423		86,462		85,539	$	86,010	$	85,482
Earnings per common share:
Basic	$	0.91	$	0.83	$	0.77	$	0.96	$	2.69	$	2.62
Diluted	$	0.91	$	0.83	$	0.77	$	0.96	$	2.69	$	2.61

Potential common shares consist of stock options, nonvested performance-based awards, and nonvested restricted share awards deferred under the Company’s nonqualified deferred compensation plan. These potential common shares do not enter into the calculation of diluted earnings per share if the impact would be antidilutive, i.e., increase earnings per share or reduce a loss per share. Weighted average antidilutive potential common shares totaled ~~1,281~~43,794 and 37,680 for the three and nine months ended ~~March 31, 2019.~~September 30, 2019, respectively. There were no14,904 and 18,257 antidilutive potential common shares excluded from the calculation of diluted earnings per share for the three and nine months ended ~~March 31, 2018.~~September 30, 2018, respectively.

The Company sponsors a qualified defined benefit pension plan, theHancock Whitney CorporationPension Plan (“Pension Plan”), covering certain eligible associates. Those hired or rehired by the Company prior to June 30, 2017 are eligible to participate; however, the accrued benefits of each participant in the Pension Plan whose combined age plus years of service as of January 1, 2018 totaled less than 55 were frozen asof January 1, 2018 and will not thereafter increase. The Company makes contributions tothe Pension Planin amounts sufficient to meet funding requirements set forth in federal employee benefit and tax laws, plus such additional amounts as the Company may determine tobe appropriate. During the first quarter of 2019, the Company made a discretionary contribution of $100 million to the Pension Plan. During the third quarter of 2018, the Company made a discretionary contribution of ~~$39~~ $39million to thePensionPlandesignated tothe 2017 plan year.

The Company also offers a defined contribution retirement benefit plan, the Hancock Whitney Corporation 401(k) Savings Plan (“401(k) Plan”), that covers substantially all associates who have been employed 60 days and meet a minimum age requirement and employment classification criteria. The Company matches 100% of the first 1% of compensation saved by a participant, and 50% of the next 5% of compensation saved. Newly eligible associates are automatically enrolled at an initial 3% savings rate unless the associate actively opts out of participation in the plan. Beginning January 1, 2018, the Company makes an additional basic contribution to associates hired or rehired after June 30, 2017 in an amount equal to 2% of the associate’s eligible compensation. For Pension Plan participants whose benefits were frozen as of January 1, 2018, the 401(k) Plan provides an enhanced Company contribution 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. Participants vest in basic and enhanced Company contributions upon completion of three years of service.

The Company sponsors 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
For the Three Months Ended March 31,	2019			2018			2019			2018
For the Three Months Ended September 30,													2019			2018			2019			2018
Service cost	$	2,775		$	2,925		$	29		$	35		$	2,735		$	3,163		$	22		$	28
Interest cost		4,863			3,923			128			137			4,659			4,279			165			161
Expected return on plan assets		(11,300	)		(9,700	)		—			—			(11,299	)		(10,375	)		—			—
Amortization of net loss and prior service costs		2,430			1,326			(227	)		(149	)		2,553			1,366			(229	)		(95	)
Net periodic benefit cost (reduction of cost)	$	(1,232	)	$	(1,526	)	$	(70	)	$	23		$	(1,352	)	$	(1,567	)	$	(42	)	$	94

The Company 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 17 to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

A summary of stock option activity for the ~~three~~nine months ended ~~March 31,~~September 30, 2019 is presented below:

					Weighted									Weighted
			Weighted		Average							Weighted		Average
			Average		Remaining		Aggregate					Average		Remaining		Aggregate
	Number of		Exercise		Contractual		Intrinsic		Number of			Exercise		Contractual		Intrinsic
Options	Shares		Price		Term (Years)		Value ($000)		Shares			Price		Term (Years)		Value ($000)
Outstanding at January 1, 2019		46,865	$	31.88		2.6	$	164		46,865		$	31.88		2.6	$	164
Former MidSouth options converted at acquisition										20,530			46.76				—
Exercised/Released		—		—				—		(18,969	)		31.54				172
Cancelled/Forfeited		—		—				—		—			—				—
Expired		—		—				—		—			—				—
Outstanding at March 31, 2019		46,865	$	31.88		2.3	$	399
Exercisable at March 31, 2019		46,865	$	31.88		2.3	$	399
Outstanding at September 30, 2019										48,426		$	38.32		1.5	$	174
Exercisable at September 30, 2019										48,426		$	38.32		1.5	$	174

~~There were no exercises of stock options during the three months ended March 31, 2019.~~ The total intrinsic value of options exercised during the ~~three~~nine months ended ~~March 31,~~September 30, 2019 and 2018 was ~~$0.5 million.~~$0.2 million and $0.6 million, respectively.

The Company’s restricted and performance-based share awards to certain employees and directors are subject to service requirements. A summary of the status of the Company’s nonvested restricted and performance-based share awards at ~~March 31,~~September 30, 2019 and changes during the ~~three~~nine months ended ~~March 31,~~September 30, 2019, are 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, 2019		1,494,041		$	39.89		1,494,041		$	39.89
Granted		72,081			34.20		102,221			35.74
Vested		(8,028	)		47.17		(35,353	)		40.96
Forfeited		(20,499	)		38.92		(53,525	)		39.22
Nonvested at March 31, 2019		1,537,595		$	39.60
Nonvested at September 30, 2019							1,507,384		$	39.60

~~At March 31,~~As of September 30, 2019, there was ~~$51.0~~$41.3 million of total unrecognized compensation expense related to nonvested restricted and performance shares expected to ~~vest.~~vest in the future. This compensation is expected to be recognized in expense over a weighted average period of ~~3.3~~3.0 years. The total fair value of shares which vested during the ~~three~~nine months ended ~~March 31,~~September 30, 2019 and 2018 was ~~$0.1~~$1.3 million and ~~$0.3~~$2.0 million, respectively.

During the ~~three~~nine months ended ~~March 31,~~September 30, 2019, the Company granted 33,691 performance share awards subject to a total shareholder return (“TSR”) performance metric with a grant date fair value of $35.27 per share and 33,691 performance shares subject to an operating earnings per share performance metric with a grant date fair value of $32.15 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 42 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~~operating earnings per share that ultimately vest will be based on the Company’s attainment of certain operating 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 basis over the three-year service period.

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 its 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 and Bank must include unfunded commitments meeting certain criteria in risk-weighted capital calculations.

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 presents a summary of the Company’s off-balance sheet financial instruments as of ~~March 31,~~September 30, 2019 and December 31, 2018:

	March 31,		December 31,		September 30,		December 31,
(in thousands)	2019		2018		2019		2018
Commitments to extend credit	$	7,198,032	$	7,234,528	$	7,478,907	$	7,234,528
Letters of credit		336,419		365,498		389,998		365,498

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

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 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 at ~~March 31,~~September 30, 2019 and December 31, 2018:

	March 31, 2019								September 30, 2019
(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	$	—	$	72,143	$	—	$	72,143	$	—	$	95,141	$	—	$	95,141
Municipal obligations		—		245,940		—		245,940		—		252,163		—	$	252,163
Corporate debt securities		—		3,500		—		3,500		—		3,897		—	$	3,897
Residential mortgage-backed securities		—		1,413,032		—		1,413,032		—		1,339,471		—	$	1,339,471
Commercial mortgage-backed securities		—		787,834		—		787,834		—		1,624,169		—	$	1,624,169
Collateralized mortgage obligations		—		158,631		—		158,631		—		234,816		—	$	234,816
Total available for sale securities		—		2,681,080		—		2,681,080		—		3,549,657		—		3,549,657
Derivative assets (1)		—		25,827		—		25,827		—		71,904		—		71,904
Total recurring fair value measurements - assets		—	$	2,706,907		—	$	2,706,907	$	—	$	3,621,561	$	—	$	3,621,561
Liabilities
Derivative liabilities (1)	$	—	$	11,176	$	6,953	$	18,129	$	—	$	17,218	$	6,249	$	23,467
Total recurring fair value measurements - liabilities	$	—	$	11,176	$	6,953	$	18,129	$	—	$	17,218	$	6,249	$	23,467

Securities classified as level 2 include obligations of U.S. Government agencies and U.S. Government-sponsored agencies, residential and commercial 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 and a half 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.

For the Company’s derivative financial instruments designated as hedges and those under the customer interest rate program, the fair value is obtained from a third-party pricing service that uses an industry-standard discounted cash flow model that relies on inputs, LIBOR swap curves, Overnight Index swap rate curves, all 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 these 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 for these instruments in level 2 of the fair value hierarchy. The Company’s policy is to measure counterparty credit risk quarterly for all derivative instruments 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 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 Level 3 liability consists of a derivative contract with the purchaser of 192,163 shares of Visa Class B common stock. Pursuant to the agreement, the Company retains the risks associated with the ultimate conversion of the Visa Class B common shares into shares of Visa Class A common stock, such that the counterparty will be compensated for any dilutive adjustments to the conversion ratio and the Company will be compensated for any anti-dilutive adjustments to the ratio. The agreement also requires periodic payments by the Company to the counterparty calculated by reference to the market price of Visa Class A common shares at the time of sale and a fixed rate of interest that steps up once after the eighth scheduled quarterly payment. The fair value of the liability is determined using a discounted cash flow methodology. The significant unobservable inputs used in the fair value measurement are the Company’s own assumptions about estimated changes in the conversion rate of the Visa Class B common shares into Visa Class A common shares, the date on which such conversion is expected to occur and the estimated growth rate of the Visa Class A common share price. Refer to Note 7 – Derivatives for information about the derivative contract with the counterparty.

The Company believes its valuation methods for its assets and liabilities carried at fair value are appropriate; however, the use of different methodologies or assumptions, particularly as applied to Level 3 assets and liabilities, could have a material effect on the computation of their estimated fair values.

Changes in Level 3 Fair Value Measurements and Quantitative Information about Level 3 Fair Value Measurements

The table below presents a rollforward of the amounts on the consolidated balance sheets for the ~~three~~nine months ended ~~March 31,~~September 30, 2019 and the year ended December 31, 2018 for financial instruments of a material nature that are classified within Level 3 of the fair value hierarchy and are measured at fair value on a recurring basis:

The table below provides an overview of the valuation techniques and significant unobservable inputs used in those techniques to measure the financial instrument measured on a recurring basis and classified within Level 3 of the valuation. The range of sensitivities that management utilized in its fair value calculations is deemed acceptable in the industry with respect to the identified financial instrument.

($ in thousands)

Fair Value

Level 3 Class

March 31, 2019

December 31, 2018

Valuation Technique

Unobservable Input

Values Utilized

September 30, 2019

December 31, 2018

Valuation Technique

Unobservable Input

Values Utilized

Visa Class A appreciation

6% - 18%

Visa Class A appreciation

6% - 18%

Derivative liability

6,953

7,304

Discounted cash flow

Conversion rate

1.62x - 1.59x

6,249

7,304

Discounted cash flow

Conversion rate

1.62x - 1.59x

Time until resolution

24-48 months

Time until resolution

24-39 months

The Company’s policy is to recognize transfers between valuation hierarchy levels as of the end of a reporting period. There were no0 transfers between levels during the periods presented.

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 and foreclosed assets, 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.~~from loans or property and equipment. Subsequently, other real estate owned and foreclosed assets 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.~~assets.

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

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

	March 31, 2019								September 30, 2019
(in thousands)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Collateral-dependent impaired loans	$	—	$	163,781	$	—	$	163,781	$	—	$	170,425	$	—	$	170,425
Other real estate owned and foreclosed assets, net		—		—		7,688		7,688		—		—		30,955	$	30,955
Total nonrecurring fair value measurements	$	—	$	163,781	$	7,688	$	171,469	$	—	$	170,425	$	30,955	$	201,380

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 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 amounts:

	March 31, 2019										September 30, 2019
							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	$	523,956	$	—	$	—	$	523,956	$	523,956	$	517,576	$	—	$	—	$	517,576	$	517,576
Available for sale securities		—		2,681,080		—		2,681,080		2,681,080		—		3,549,657		—		3,549,657		3,549,657
Held to maturity securities		—		2,892,910		—		2,892,910		2,896,442		—		2,920,356		—		2,920,356		2,855,062
Loans, net		—		163,781		19,646,070		19,809,851		19,918,150		—		170,425		20,812,059		20,982,484		20,840,380
Loans held for sale		—		27,437		—		27,437		27,437		—		75,789		—		75,789		75,789
Derivative financial instruments		—		25,827		—		25,827		25,827		—		71,904		—		71,904		71,904
Financial liabilities:
Deposits	$	—	$	—	$	23,351,829	$	23,351,829	$	23,380,294		—		—		24,188,274		24,188,274		24,201,299
Federal funds purchased		450		—		—		450		450		125,400		—		—		125,400		125,400
Securities sold under agreements to repurchase		478,285		—		—		478,285		478,285		545,915		—		—		545,915		545,915
FHLB short-term borrowings		910,000		—		—		910,000		910,000		1,437,500		—		—		1,437,500		1,437,500
Long-term debt		—		227,206		—		227,206		224,962		—		245,715		—		245,715		246,641
Derivative financial instruments		—		11,176		6,953		18,129		18,129		—		17,218		6,249		23,467		23,467

	December 31, 2018										December 31, 2018
(in thousands)	Level 1		Level 2		Level 3		Total Fair Value		Carrying Amount		Level 1		Level 2		Level 3		Total Fair Value		Carrying Amount
Financial assets:
Cash, interest-bearing bank deposits, and federal funds sold	$	494,466	$	—	$	—	$	494,466	$	494,466	$	494,466	$	—	$	—	$	494,466	$	494,466
Available for sale securities		—		2,691,037		—		2,691,037		2,691,037		—		2,691,037		—		2,691,037		2,691,037
Held to maturity securities		—		2,935,856		—		2,935,856		2,979,547		—		2,935,856		—		2,935,856		2,979,547
Loans, net		—		170,918		19,555,969		19,726,887		19,831,897		—		170,918		19,555,969		19,726,887		19,831,897
Loans held for sale		—		28,150		—		28,150		28,150		—		28,150		—		28,150		28,150
Derivative financial instruments		—		16,980		—		16,980		16,980		—		16,980		—		16,980		16,980
Financial liabilities:
Deposits	$	—	$	—	$	23,129,574	$	23,129,574	$	23,150,185		—		—		23,129,574		23,129,574		23,150,185
Federal funds purchased		425		—		—		425		425		425		—		—		425		425
Securities sold under agreements to repurchase		428,599		—		—		428,599		428,599		428,599		—		—		428,599		428,599
FHLB short-term borrowings		1,160,104		—		—		1,160,104		1,160,104		1,160,104		—		—		1,160,104		1,160,104
Long-term debt		—		223,135		—		223,135		224,993		—		223,135		—		223,135		224,993
Derivative financial instruments		—		14,923		7,304		22,227		22,227		—		14,923		7,304		22,227		22,227

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. With the exception of short-term leases, lessees are required to recognize a lease liability representing the lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and a right-of-use asset representing the lessee’s right to use, or control the use of, a specified asset for the lease term upon adoption. Lessor accounting was largely unchanged under the new guidance, except for clarification of the definition of initial direct costs which provided additional guidance on the timing of recognition of those costs. Subsequent to the issuance of this update, the FASB issued three additional ASUs that provide codification improvements and certain transition elections, including ASU 2018-11, which permits an additional transition method whereby an entity may elect to record a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company was required to and did adopt the standard effective January 1, 2019, using the modified retrospective transition method permitted by

ASU 2018-11. Thus, the Company’s reporting for the comparative period presented in the financial statements and disclosures continues to be in accordance with GAAP Topic 840. Upon adoption, the Company ~~recorded~~recorded a gross-up of assets and liabilities in its Consolidated Balance Sheet, with approximately ~~$116~~$116 million for right of use assets and ~~$131~~$131 million of lease payment obligations offset by the elimination of ~~$15~~$15 million of existing lease incentive and other deferred rent liabilities. Accounting for leases in accordance with Topic 842 has not had a material impact upon the Company’s consolidated results of operations, and is not expected to in future periods. Refer to Note 5 – Operating Leases for further information related to operating lease accounting policy, practical expedient elections for adoption and operating leasing information at adoption and as of ~~March 31,~~September 30, 2019.

In April 2019, the FASB issued ASU 2019-04, “Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments.” The Update provides clarification and correction to certain areas of previously issued ASUs concerning financial instruments (2016-01, 2016-13 and 2017-12). The FASB does not expect the provisions contained in this Update to have a significant effect on current accounting practice. Effective dates for adoption of this Update’s provisions vary in accordance with the effective dates and adoption status of the amended ASUs. The Company is currently assessing the impact of adoption of this guidance, but it is not expected to have a material impact upon its financial position and results of operations.

In August 2018, the FASB issued ASU 2018-14, “Compensation – Retirement Benefits – Defined Benefit Plans – General (Subtopic 715-20): Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans.” The amendments in this Update modify certain disclosure requirements by removing disclosures that are no longer considered cost beneficial, clarifying specific requirements of disclosures, and adding disclosure requirements identified as relevant. The amendments in this Update are effective for fiscal years ending after December 15, 2020 for public business entities, and early adoption is permitted. The Company is currently assessing the impact of adoption of this guidance upon its pension and postretirement plan disclosures. Adoption of this guidance will have no impact upon the Company’s results of operations or financial condition.

In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement.” The amendments in this Update modify certain disclosure requirements on fair value measurements set forth in Topic 820, Fair Value Measurements. In addition, the amendments in this Update eliminate the phrase “an entity shall disclose at a minimum” to promote the appropriate exercise of discretion by entities when considering fair value measurement disclosures to clarify that materiality is an appropriate consideration of entities and their auditors when evaluating disclosure requirements. The amendments in this Update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 31, 2019, and early adoption is permitted. The Company is currently assessing the impact of adoption of this guidance upon its fair value measurements disclosures. Adoption of this guidance will have no impact upon the Company’s results of operations or financial condition.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial ~~Instruments,~~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~~are required to 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 for non-purchased credit impaired loans as of the beginning of the year of adoption. For purchased credit impaired loans, there is no impact to retained earnings upon adoption; rather, the entity will reclassify a portion of the purchase accounting fair value mark to

allowance for credit losses 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 iswill not ~~planning to~~ early adopt this guidance.

The Company has ~~engaged third party consultants~~internally developed credit models and formed cross-functional working groups comprised of individuals from various areas including credit, finance, treasury, risk management and information technology for implementation. Five work streams have been created to develop the expected credit loss models; execute system implementation; complete balance sheet scoping; ensure the design of effective internal controls surrounding new processes; and provide executive oversight of the project. The Company has completed the ~~configuration~~implementation of a vendor provided ~~software solution~~platform to aggregate inputs and perform the calculation of allowance for ~~which testing~~credit losses. The validation of the credit loss models is ongoing and ~~implementation is expected to be complete in second quarter of 2019. Validation of models began in the first quarter of 2019 and is~~ expected to be completed during the ~~second~~fourth quarter of 2019. ~~While~~Additional CECL implementation activities in the fourth quarter 2019 will include refinement of procedures, completion of the design and implementation of internal controls over financial reporting, conclusion of validation of credit models and end-to-end processes, and drafting of newly required disclosures.

The Company has ~~not yet quantified~~completed parallel testing of the ~~financial~~CECL estimation process for the third quarter 2019, which included executed controls established to-date surrounding data, models and governance. Results from this process indicated a net increase of approximately 20 to 30 percent over the September 30, 2019 incurred loan loss reserve level utilizing the CECL models and current economic forecast; this range excludes the impact of ~~adoption,~~ the ~~expectation is that application of this guidance will result in an increase in the~~loans and debt securities recently acquired from MidSouth. The Company’s CECL allowance for loan losses ~~given~~estimates losses over a two-year reasonable and supportable forecast period utilizing the ~~change in methodology from covering~~weighted average of a range of macroeconomic scenarios, and then reverts to longer historical loss experience to estimate losses ~~inherent~~for the remaining life. Significant drivers in the ~~portfolio to covering~~aforementioned increase were higher calculated reserve levels forlonger life real-estate secured loans and the expected funding of off-balance sheet exposures, partially offset by lower reserves for shorter-term commercial loans. Immaterial expected credit losses ~~over the remaining expected life of the portfolio. Application of the guidance is also expected to result in the establishment of an allowance for credit loss~~were calculated on held to maturity debt securities. The amount of ~~the~~ increase in ~~these allowances~~allowance for credit losses upon adoption will be impacted by the portfolio composition and quality ~~at the adoption date~~ as well as current economic conditions and forecasts at that time.

On ~~April 30,~~October 18, 2019, the Company ~~announced its entry~~entered into an accelerated share repurchase (“ASR”) agreement with Morgan Stanley & Co. LLC (“Morgan Stanley”) to an Agreement and Plan of Merger providing for, among other things, the acquisition of MidSouth Bancorp, Inc. (“MidSouth”) (NYSE: MSL), parent company of MidSouth Bank, N.A. At March 31, 2019, MidSouth had approximately $1.7 billion in assets, including $0.9 billion of loans, and $1.4 billion of deposits. Under the termsrepurchase $185 million of the Company’s common stock. The ASR agreement ~~each share~~was entered into under the current stock buyback program, under which the Company is authorized to repurchase up to 5.5 million shares of ~~MidSouth~~its common stock ~~outstanding will convert, pursuant~~prior to December 31, 2020. Refer to Note 8 – Stockholders’ Equity for information about the stock buyback program.

Pursuant to the ASR agreement, the Company made a ~~fixed conversion ratio, into~~$185 million payment to Morgan Stanley on October 21, 2019, and received from Morgan Stanley on the ~~right to receive 0.2952~~same day an initial delivery of approximately 3.6 million shares of the Company’s common ~~stock. In addition, the merger agreement allows for the redemption of all of MidSouth’s outstanding preferred~~ stock, ~~at closing, subject to receipt of applicable governmental approvals. The value~~which represents approximately 75% of the ~~stock-based consideration will~~estimated total number of shares to be ~~determined at~~repurchased under the ~~time of closing~~ASR agreement based on the ~~fixed conversion ratio. The approximate transaction value based on an average~~October 18, 2019 closing price of the Company’s ~~share~~common stock. The final number of shares to be repurchased will be based generally on the volume-weighted average price ~~at the date~~per share of the Company’s common stock during the term of the ASR agreement, ~~April 30, 2019, was $213 million. The acquisition is~~less a discount, and subject to possible adjustments in accordance with the ~~satisfaction~~terms of ~~customary closing conditions, including~~ the ~~receipt~~ASR agreement. Final settlement of ~~regulatory approvals and approval by~~ the ~~shareholders of MidSouth. The transaction~~ASR agreement is ~~expected~~scheduled to ~~close late in~~occur no later than the third quarter of ~~2019.~~2020.

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

This report contains forward-looking statements within the meaning and protections of section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended. Important factors that could cause actual results to differ materially from the forward-looking statements we make in this Quarterly Report on Form 10-Q and in other reports or documents that we file from time to time with the SEC ~~and~~ include, but are not limited to, the following:

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, 2018 and in other periodic reports that we file with the SEC.

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

Management’s Discussion and Analysis of Financial Condition and Results of Operations include non-GAAP measures used to describe our performance. These non-GAAP financial measures have inherent limitations as analytical tools and should not be considered on a standalone basis or as a substitute for analyses of financial condition and results as reported under GAAP. Non-GAAP financial measures are not standardized and therefore, it may not be possible to compare these measures with other companies that present measures having the same or similar names. These disclosures should not be considered an alternative to GAAP.

A reconciliation of those measures to GAAP measures are provided within the Selected Financial Data section that appears later in 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, 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 statutory federal tax rate of 21% to increase tax-exempt interest income to a taxable equivalent basis. We believe this measure to be the preferred industry measurement of net interest income, and that it enhances comparability of net interest income arising from taxable and tax-exempt sources.

We present certain additional non-GAAP financial measures to assist the reader with a better understanding of the Company’s performance period over period, as well as to provide investors with assistance in understanding the success management has experienced in executing its strategic initiatives. These non-GAAP measures may reference the concept “operating.” We use the term “operating” to describe a financial measure that excludes income or expense considered to be nonoperating in nature. Items identified as nonoperating are those that, when excluded from a reported financial measure, provide management or the reader with a measure that may be more indicative of forward-looking trends in our business.

We define Operating Revenue as net interest income (te) and noninterest income less nonoperating revenue. We define Operating Pre-Provision Net Revenue as operating revenue (te) less noninterest expense, excluding nonoperating items. Management believes that operating 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.

We define Operating Earnings as reported net income excluding nonoperating items net of income tax. We define Operating Earnings per Share as operating earnings expressed as an amount available to each common shareholder on a diluted basis.

On ~~April 30,~~September 21, 2019, we ~~announced our entry into an agreement to acquire~~completed the acquisition of MidSouth Bancorp, Inc. (“MidSouth”) (NYSE: MSL) ~~in a stock-for-stock transaction.~~, parent company of MidSouth Bank, ~~N.A.,~~N.A, with simultaneous operational conversion. We acquired net assets of approximately $124.7 million, including the ~~wholly-owned banking subsidiary~~following:

In consideration for the net assets acquired, each outstanding share of MidSouth operates 42 locations in Louisiana and Texas and had approximately $1.7 billion of assets, including $0.9 billion of loans, and $1.4 billion of deposits at March 31, 2019. At the closing, each share of MidSouth’s common stock ~~will convert~~converted to ~~the right to receive~~ 0.2952 shares of our common stock. As such, we issued approximately 5.0 million shares resulting in a transaction value of approximately $193.8 million. The ~~merger agreement also allows for the redemption~~transaction resulted in estimated goodwill of ~~MidSouth’s outstanding preferred stock at closing, subject to the receipt~~$69.2 million.

Upon acquisition, we closed or consolidated 20 MidSouth branches. The Company ~~expects~~incurred acquisition-related expenses ~~to approximate $38~~of $28.8 million, or $0.26 per diluted share, in ~~2019~~the third quarter and expects to incur an additional $3 to $5 million of expenses before the end of year. The transaction is expected to be accretive to income beginning in the first quarter of ~~2020. The transaction~~2020 and is ~~expected~~projected to add approximately $0.13 to $0.15 to 2020 earnings once fully phased-in. The transaction provides the opportunity for both enhanced growth in several of our current markets, such as MidSouth’s home market of Lafayette, Louisiana, as well as opportunities for expansion into new markets in Louisiana and Texas. The acquisition is subject to the satisfaction of customary closing conditions, including the receipt of regulatory approvals and approval by the shareholders of MidSouth. The transaction is expected to close with a simultaneous systems conversion late in the third quarter of 2019.

Most of our market ~~area~~areas experienced a modest to moderate expansion in economic activity during the ~~first~~third quarter of 2019, according to the Federal Reserve’s Summary of Commentary on Current Economic Conditions (“Beige Book”). Overall, the economic outlook ~~remains positive. Activity~~was generally positive, though there is continued concern over trade tensions and a more pessimistic outlook in energy as a result of reduced expectations for global economic growth.

Drilling activity in the energy sector ~~expanded and outlooks improved compared~~continued to ~~the prior quarter. Oil~~erode, contributing to a notable weakness in oilfield services. However, oil and gas production ~~rose at~~continued to rise and well completion continued to increase in the Permian Basin. The attacks on Saudi Arabian oil facilities did not change planned capital spending in the energy sector because there was not a ~~slow pace; however,~~lasting increase in the price of oil. Forecast for the remainder of the year was slightly more pessimistic than previously reported due to lower spending ~~for drilling activity declined as firms invested less into new equipment.~~and a weaker economic outlook.

Commercial real estate conditions ~~continued to advance~~remained steady in most of our ~~markets. In our Houston market, apartment rents were flat~~markets, with vacancies continuing to trend downward at a modest pace. Industrial demand and ~~industrial leasing slowed.~~construction remained solid, despite growing construction costs. A robust amount of concentrated new multifamily construction in some metro submarkets is leading to some concern of oversupply.

The residential real estate market ~~has a positive outlook with~~experienced increased demand in most of our markets, ~~reporting that~~with lower mortgage rates ~~are helping~~and a relatively healthy economy. Demand was strongest in the more affordable price segments where inventory remained limited. Declining inventory levels led to ~~boost growth from the prior report, but flat to the prior year and optimistic as the spring selling season gets underway.~~strong upward pressure on home prices across most of our markets.

Retail sales activity and consumer spending ~~grew slightly~~were steady in most of our ~~markets. The Houston market~~markets and auto sales increased. Retailers remained concerned that heightened uncertainty among consumers due to the geopolitical environment would negatively impact consumer confidence and spending during the upcoming holiday season. Tourism and hospitality industries reported ~~flat sales~~mixed results with some areas experiencing strong activity and ~~slower demand. Auto sales were down~~some areas experiencing a decrease in ~~all of our markets.~~year over year activity. The labor market remained tight in our markets with ~~an increase~~accelerated wage growth in ~~wages for hard-to-fill or in-demand~~lower-skilled positions.

Economic data indicates that loan growth was ~~stable~~positive but slowing in most of our markets, ~~with an increase in loan volumes in our Houston market, primarily with construction~~generally led by real estate lending. ~~Reports also indicated that financial~~Interest rate margins were stable to declining across most institutions ~~were able to fund the majority of lending with their deposit base, although competition for deposits~~and there continues to ~~increase. Our total loan balance increased $86.4 million, or 2% annualized, during~~be concern over lower interest rates, the ~~first quarter of 2019.~~uncertain business climate, and political and trade tensions.

Net income for the ~~first~~third quarter of 2019 was ~~$79.2~~$67.8 million, or ~~$.91~~$.77 per diluted common share (EPS), compared to ~~$96.2~~$88.3 million, or ~~$1.10~~$1.01 EPS in the ~~fourth~~second quarter of ~~2018~~2019 and ~~$72.5~~$83.9 million, or ~~$.83~~$.96 EPS, in the ~~first~~third quarter of 2018. The ~~first~~third quarter of 2019 included ~~a $10.1~~$28.8 million ($~~.09~~.26 per share after-tax impact) ~~provision for loan losses related to the previously disclosed potential fraud~~of merger costs associated with ~~DC Solar (further discussion~~the September 21, 2019 acquisition of ~~this matter appears in~~MidSouth. The second quarter of 2019 did not include any nonoperating items while the ~~Provision for Loan Losses section later in this Item). The fourth~~third quarter of 2018 included ~~$1.9~~$4.8 million ($~~.02~~.05 per share after-tax impact) of nonoperating ~~items~~expenses primarily related to the trust and ~~the first quarter of 2018 included $7.0 million ($.07 per share impact) of nonoperating items.~~asset management acquisition that closed on July 13, 2018.

Highlights of our ~~first~~third quarter 2019 results (compared to ~~fourth~~second quarter ~~2018)~~2019):

~~The first~~third quarter of 2019 ~~reflects improvements~~results were solid and included the acquisition and integration of MidSouth ten days prior to quarter-end. Earnings, excluding merger costs, were in line with our guidance and expectations for the quarter. We also noted increased operating leverage and reduced total nonperforming loan levels. While our net interest margin and asset quality, two key areas of focus. During the fourth quarter of 2018, we restructured a portion of our investment and loan portfolios whereby we sold certain lower yielding securities and loans and reinvested in higher yielding assets. The portfolio restructuring and other improvements in our earning asset mix, along with the December 2018 interest rate increase, contributed to the expansionnarrowed 4 basis points in the ~~net~~quarter, an interest ~~margin. Asset quality improved with criticized commercial loans down in both the energy~~recovery from a support services credit and ~~nonenergy portfolios.~~a proactive stance on reducing deposit costs helped offset two Federal Reserve rate cuts.

Net interest income (te) for the ~~first~~third quarter of 2019 was ~~$223.1~~$226.6 million, a ~~$1.6~~$3.0 million, or 1%, increase from the ~~fourth~~second quarter of ~~2018. Net~~2019. Compared to the third quarter of 2018, net interest income (te) ~~for the first quarter of 2019~~ increased ~~$13.5~~$8.3 million, or ~~6%, compared to the first quarter of 2018.~~4%. The linked quarter increase is primarily attributable to ~~a full quarter impact of the fourth quarter portfolio restructure~~one additional accrual day and ~~the December 2018 rate increase,~~higher earning assets, partially offset by the impact of two ~~fewer accrual days.~~Federal Reserve rate decreases. The increase compared to the prior year is due largely to an increase in loan balances with higher yields and an overall more favorable net mix of rates.

The net interest margin (te) ~~was 3.46 %~~ for the ~~first~~third quarter of 2019 upwas down 4 bps at 3.41% from the second quarter of 2019. The decrease was primarily due to the impact of the Federal Reserve rate decreases, with the yield on earning assets decline of 7 bps ~~from~~exceeding the ~~fourth~~cost of funds of 3 bps. Interest recoveries on problem credits have favorably impacted the net interest margin by adding 5 bps to the third quarter of ~~2018. Net~~2019, compared to 3 bps in the second quarter of 2019. The third quarter 2019 net interest margin (te) was ~~favorably~~also positively impacted by ~~the late 2018 portfolio restructuring. The restructuring~~a proactive move in lowering deposit costs and ~~other improvements~~a change in the ~~earning asset~~borrowing mix and the recent interest rate increase resulted in a 14 bp improvement in the earning asset yield, including increases in the loan yield of 13 bps, bond portfolio yield of 7 bps, and short term investments yield of 17 bps. Partially offsetting the linked quarter improvement in the earning asset yield was the movement of our deposit and loan betas at differing intervals. The deposit and loan betas are defined as the amount by which deposit and loan costs change in responserelated to the ~~movement in short-term interest rates. Our deposit beta moved from 31% to 50% in the first quarter~~addition of 2019, while our loan beta moved from 40% to 54% over the same period. The movement in the deposit beta was influenced by a 20 bp increase in the cost of brokered CDs, and a 20 bp increase in the rate paid on public fund deposits. MidSouth.

Compared to the ~~first~~third quarter of 2018, the net interest margin (te) increased 95 bps, ~~primarily~~ due in part to interest recoveries, which favorably impacted the net interest margin in the third quarter of 2019 by 5 bps and by 2 bps in the third quarter of 2018, as well as an improvement in the earning asset mix, ~~and the net benefit from interest rate increases during 2018.~~partially offset by increased funding costs.

The following tables detail the components of our net interest income (te) and net interest margin.


	Three Months Ended																						Three Months Ended
	March 31, 2019								December 31, 2018							March 31, 2018							September 30, 2019							June 30, 2019								September 30, 2018
(dollars in millions)	Volume		Interest (d)			Rate			Volume		Interest (d)		Rate			Volume		Interest (d)		Rate			Volume		Interest (d)		Rate			Volume		Interest (d)			Rate			Volume		Interest (d)		Rate
Average earning assets
Commercial & real estate loans (te) (a)	$	15,062.1	$	180.5			4.86	%	$	14,794.9	$	172.8		4.64	%	$	14,224.4	$	150.9		4.30	%	$	15,126.1	$	185.5		4.87	%	$	15,081.9	$	185.3			4.93	%	$	14,542.3	$	168.9		4.61	%
Residential mortgage loans		2,942.4		31.1			4.23	%		2,888.2		29.2		4.04	%		2,718.4		27.9		4.10	%		2,978.7		30.1		4.05	%		2,969.7		30.1			4.03	%		2,816.2		29.4		4.17	%
Consumer loans		2,122.4		29.9			5.72	%		2,134.6		32.5		6.04	%		2,085.7		29.0		5.64	%		2,092.3		30.4		5.76	%		2,098.5		30.3			5.79	%		2,106.2		28.6		5.39	%
Loan fees & late charges		—		(0.9	)		0.00	%		—		0.6		0.00	%		—		0.5		0.00	%		—		0.1		0.00	%		—		(0.1	)		0.00	%		—		—		0.00	%
Total loans (te) (b)		20,126.9		240.6			4.84	%		19,817.7		235.1		4.71	%		19,028.5		208.3		4.43	%		20,197.1		246.1		4.84	%		20,150.1		245.6			4.89	%		19,464.7		226.9		4.63	%
Loans held for sale		20.6		0.3			4.92	%		22.2		0.2		2.91	%		32.2		0.2		2.75	%		55.3		0.6		4.26	%		27.9		0.3			4.96	%		26.0		0.3		3.60	%
US Treasury and government agency securities		123.8		0.7			2.25	%		131.8		0.8		2.23	%		148.4		0.8		2.21	%		141.6		0.8		2.33	%		126.0		0.7			2.30	%		144.7		0.8		2.21	%
Mortgage-backed securities and collateralized mortgage obligations		4,599.4		29.9			2.60	%		4,896.2		30.9		2.53	%		4,785.3		27.9		2.33	%		4,966.5		31.4		2.53	%		4,550.1		29.0			2.55	%		5,092.4		31.1		2.44	%
Municipals (te)		930.0		7.4			3.17	%		933.9		7.4		3.17	%		960.1		7.6		3.18	%		893.1		6.9		3.08	%		906.8		7.1			3.12	%		945.7		7.5		3.19	%
Other securities		3.5	0.0				3.09	%		3.6	0.0			2.77	%		3.5	0.0			2.06	%		3.5	0.0			3.61	%		3.5	0.0				3.30	%		3.6	0.0			2.81	%
Total securities (te) (c)		5,656.7		38.0			2.69	%		5,965.5		39.1		2.62	%		5,897.3		36.3		2.46	%		6,004.7		39.1		2.61	%		5,586.4		36.8			2.64	%		6,186.4		39.4		2.55	%
Total short-term investments		216.2		1.2			2.18	%		205.8		1.0		2.01	%		148.3		0.5		1.34	%		180.5		1.0		2.01	%		228.5		1.4			2.36	%		155.3		0.7		1.71	%
Total earning assets (te)	$	26,020.4	$	280.1			4.35	%	$	26,011.2	$	275.4		4.21	%	$	25,106.3	$	245.3		3.95	%	$	26,437.6	$	286.8		4.31	%	$	25,992.9	$	284.1			4.38	%	$	25,832.4	$	267.3		4.11	%
Average interest-bearing liabilities
Interest-bearing transaction and savings deposits	$	8,082.6	$	14.7			0.74	%	$	7,940.7	$	12.4		0.62	%	$	8,043.2	$	9.1		0.46	%	$	8,179.3	$	15.7		0.76	%	$	8,026.0	$	15.3			0.76	%	$	7,944.3	$	10.9		0.54	%
Time deposits		3,743.3		18.0			1.95	%		3,616.2		16.6		1.82	%		2,979.0		9.7		1.32	%		3,840.1		20.0		2.07	%		3,817.8		19.4			2.03	%		3,377.6		14.1		1.66	%
Public funds		3,060.5		13.4			1.78	%		2,680.8		10.7		1.58	%		3,070.1		8.1		1.07	%		2,979.5		13.5		1.80	%		3,194.1		15.2			1.91	%		2,682.3		9.2		1.36	%
Total interest-bearing deposits		14,886.4		46.1			1.26	%		14,237.7		39.7		1.11	%		14,092.3		26.9		0.78	%		14,998.9		49.2		1.30	%		15,037.9		49.9			1.33	%		14,004.2		34.2		0.97	%
Short-term borrowings		1,684.9		8.1			1.92	%		2,330.3		11.5		1.98	%		1,823.1		5.4		1.17	%		2,063.3		8.1		1.57	%		1,617.8		7.8			1.94	%		2,610.2		11.8		1.81	%
Long-term debt		225.0		2.8			4.99	%		222.3		2.7		4.82	%		305.1		3.4		4.48	%		234.3		2.9		4.82	%		232.3		2.8			4.86	%		241.5		3.0		5.05	%
Total borrowings		1,909.9		10.9			2.30	%		2,552.6		14.2		2.21	%		2,128.2		8.8		1.66	%		2,297.6		11.0		1.90	%		1,850.1		10.6			2.31	%		2,851.7		14.8		2.07	%
Total interest-bearing liabilities		16,796.3		57.0			1.38	%		16,790.3		53.9		1.27	%		16,220.5		35.7		0.89	%		17,296.5		60.2		1.38	%		16,888.0		60.5			1.44	%		16,855.9		49.0		1.15	%
Net interest-free funding sources		9,224.1								9,220.9							8,885.8							9,141.1							9,104.9								8,976.5
Total cost of funds	$	26,020.4	$	57.0			0.89	%	$	26,011.2	$	53.9		0.82	%	$	25,106.3	$	35.7		0.58	%	$	26,437.6	$	60.2		0.90	%	$	25,992.9	$	60.5			0.93	%	$	25,832.4	$	49.0		0.75	%
Net interest spread (te)			$	223.1			2.97	%			$	221.5		2.94	%			$	209.6		3.05	%			$	226.6		2.93	%			$	223.6			2.94	%			$	218.3		2.96	%
Net interest margin	$	26,020.4	$	223.1			3.46	%	$	26,011.2	$	221.5		3.39	%	$	25,106.3	$	209.6		3.37	%	$	26,437.6	$	226.6		3.41	%	$	25,992.9	$	223.6			3.45	%	$	25,832.4	$	218.3		3.36	%

(d) Included in interest income is net purchase accounting accretion of $5.0 million for the three months ended March 31, 2019 and December 31, 2018 and $6.8 million for the three months ended March 31, 2018.

	Nine Months Ended
	September 30, 2019								September 30, 2018
(dollars in millions)	Volume		Interest (d)			Rate			Volume		Interest (d)		Rate
Average earning assets
Commercial & real estate loans (te) (a)	$	15,090.3	$	551.3			4.88	%	$	14,383.7	$	482.2		4.48	%
Residential mortgage loans		2,963.7		91.4			4.11	%		2,763.3		85.4		4.12	%
Consumer loans		2,104.3		90.6			5.76	%		2,083.4		84.8		5.44	%
Loan fees & late charges		—		(0.9	)		0.00	%		—		0.7		0.00	%
Total loans (te) (b)		20,158.3		732.4			4.86	%		19,230.4		653.1		4.54	%
Loans held for sale		34.7		1.2			4.57	%		26.9		0.8		3.89	%
US Treasury and government agency securities		130.5		2.2			2.30	%		146.2		2.4		2.21	%
Mortgage-backed securities and collateralized mortgage obligations		4,706.7		90.3			2.56	%		4,937.7		88.2		2.38	%
Municipals (te)		909.8		21.4			3.13	%		952.2		22.7		3.18	%
Other securities		3.5		0.1			3.33	%		3.5		0.1		2.57	%
Total securities (te) (c)		5,750.5		114.0			2.64	%		6,039.6		113.4		2.50	%
Total short-term investments		208.3		3.4			2.20	%		149.0		1.7		1.56	%
Total earning assets (te)	$	26,151.8	$	851.0			4.35	%	$	25,445.9	$	769.0		4.04	%
Average interest-bearing liabilities
Interest-bearing transaction and savings deposits	$	8,096.3	$	45.6			0.75	%	$	7,948.8	$	29.3		0.49	%
Time deposits		3,800.8		57.4			2.02	%		3,160.9		35.4		1.50	%
Public funds		3,077.7		42.1			1.83	%		2,906.1		26.4		1.21	%
Total interest-bearing deposits		14,974.8		145.1			1.30	%		14,015.8		91.1		0.87	%
Short-term borrowings		1,790.1		24.1			1.93	%		2,143.8		24.5		1.53	%
Long-term debt		230.5		8.5			3.22	%		281.9		9.9		4.70	%
Total borrowings		2,020.6		32.6			2.15	%		2,425.7		34.4		1.90	%
Total interest-bearing liabilities		16,995.4		177.7			1.40	%		16,441.5		125.5		1.02	%
Net interest-free funding sources		9,156.4								9,004.4
Total cost of funds	$	26,151.8	$	177.7			0.91	%	$	25,445.9	$	125.5		0.66	%
Net interest spread (te)			$	673.3			2.95	%			$	643.5		3.02	%
Net interest margin	$	26,151.8	$	673.3			3.44	%	$	25,445.9	$	643.5		3.38	%

During the ~~first~~third quarter of 2019, we recorded a provision for loan losses of ~~$18.0~~$12.4 million, up ~~$9.9~~$4.3 million from the ~~fourth~~second quarter of 2019 and ~~up $5.8~~$5.5 million from the ~~first~~third quarter of 2018, due primarily to a $9.3 million energy charge-off in the current quarter. For the nine months ended September 30, 2019, we recorded a total provision for loan losses of $38.6 million, up $10.5 million from the same period in 2018. Included in the ~~current quarter’s~~first nine months of 2019 provision iswas a ~~$10.1~~$9.0 million charge-off related to the DC Solar credit discussed ~~below and a relatively flat allowance compared~~below. The remaining year-over-year increase is primarily attributable to the ~~prior quarter.~~third quarter 2019 energy charge-off noted above, partially offset by lower losses and reserves in the consumer portfolio.

The Company had a lease financing facility outstanding to DC Solar, a company that sold and managed mobile solar generators. In February 2019, the borrower filed for Chapter 11 bankruptcy protection and we became aware of an affidavit from a Federal Bureau of Investigation special agent that alleged that this borrower was operating a potentially fraudulent Ponzi-type scheme and that the majority of mobile solar generators sold to investors and managed by the borrower and the majority of the related lease revenues claimed to have been received by the borrower may not have existed. ~~The $10.1 million charged-off taken in the quarter represents the majority of our exposure~~Management continues to ~~this borrower. There~~believe there could be potential for ~~some~~ recovery in the future ~~depending on our ability~~as we work to sell or re-lease the solar units.

The third quarter of 2019 provision ~~includes~~included net charge-offs ~~totaling $17.9~~of $12.5 million, ~~which represents 0.36%~~or 0.25% of average total loans on an annualized basis, compared to $7.2 million, or 0.14% in the ~~first~~second quarter of 2019 ~~or 0.16% when adjusted to exclude the DC Solar charge-off, compared to net charge-offs of $28.1~~and $6.9 million, or ~~0.56 % of average total loans~~0.14% in the ~~fourth~~third quarter of 2018. Included in net charge-offs for the third quarter of 2019 was $9.8 million of energy related losses, primarily in our upstream segment.

The discussion of Allowance for Loan Losses and Asset Quality later in this Item provides additional information on changes in the allowance for loan losses and general credit quality.

Noninterest income totaled ~~$70.5~~$83.2 million for the ~~first~~third quarter of 2019, ~~down~~up $4.0 million, or 5% from the fourth quarter of 2018 and up $4.3 million, or 6%, compared to the first quarter of 2018. Excluding nonoperating items related to a portfolio restructure in the fourth quarter of 2018 and a loss on the sale of a subsidiary in the first quarter of 2018, noninterest income was down $3.4 million, or 5% from the fourth quarter of 2018 and up $3.1 million, or 5%, from the ~~first~~second quarter of 2019 and up $7.7 million, or 10%, compared to the third quarter of 2018. The ~~decrease from~~results for the ~~prior quarter was primarily driven by decreases due to seasonality, market conditions and fewer business days in the quarter discussed in more detail below. The increase compared to the first~~third quarter of ~~2018 was largely driven by an increase~~2019 reflect increases in ~~trust fees following the trust and asset management acquisition, as well as higher bank card and ATM fees.~~most of our products, with continued growth in many of our specialty business lines.

The components of ~~operating and nonoperating~~ noninterest income are presented in the following table for the indicated periods.

Service charges on deposits totaled ~~$20.4~~$21.9 million for the ~~first~~third quarter of 2019, ~~down $1.1~~up $1.2 million, or 5%6%, from ~~both~~ the ~~fourth~~second quarter of ~~2018~~2019 and $0.5 million, or 2%, from the ~~first~~third quarter of 2018. The ~~decrease~~increase from the prior quarter was primarily due to ~~fewer business days and seasonal decrease in consumer overdraft fees.~~an additional processing day. The ~~decrease~~increase from the ~~first~~third quarter of 2018 was due to ~~lower consumer~~higher overdraft fees and business service ~~charges, partially offset by increased check printing fees.~~charges.

Trust fees decreased ~~$0.6~~$0.8 million, or 4%5%, linked quarter largely ~~as a result~~due to seasonal tax preparation fees in the second quarter of ~~market conditions, which began to decline towards the end of fourth quarter 2018 and gradually recovered over the current quarter.~~2019. Compared to the ~~first~~third quarter of 2018, trust fees ~~increased $3.8~~decreased $1.6 million, or ~~33%~~10%,largely due to ~~the July 2018 trust and asset management acquisition.~~changes in market conditions.

Bank card and ATM fees totaled ~~$15.3~~$17.2 million for the ~~first~~third quarter of 2019, ~~down $0.4~~up $0.5 million, or 2%3%, from the ~~fourth~~second quarter of ~~2018,~~2019, primarily due to ~~fewer days~~an additional day in the ~~first~~ quarter. Compared to the ~~first~~third quarter of 2018, bank card and ATM fees were up ~~$0.8~~$2.3 million, or 6%15%, primarily due to increased card activity.

Investment and annuity fees and insurance commissions increased ~~$0.2~~$0.5 million, or 4%7%, compared to ~~fourth~~second quarter ~~2018~~2019 primarily due to an increase in corporate underwriting fees, bond trading fees, ~~attributable to a higher volume of institutional brokerage sales~~ and ~~underwriting activity,~~insurance commissions, partially offset by a decrease in ~~insurance and~~ annuity ~~sales.~~fees. Investment and annuity fees and insurance commissions increased $0.4 million, or 7%6%, compared to ~~first~~third quarter ~~2018.~~2018 due to higher bond trading fees, investment fees and insurance fees, partially offset by a decrease in annuity sales.

Fee income from secondary mortgage market operations was ~~down $0.2~~up $1.3 million, or ~~5%, from fourth quarter of 2018 and up $0.3 million, or 10%~~29%, from the ~~first~~second quarter of 2019 and up $1.4 million, or 32%, from the third quarter of 2018. Origination volume during the third quarter of 2019 was positively impacted by both seasonality and lower interest rates. These fees will vary based on origination volume and the timing of subsequent sales.

Income from bank-owned life insurance was ~~$3.3~~$4.1 million in the ~~first~~third quarter of 2019, up $0.1 million, or 4%2%, from the ~~fourth~~second quarter of ~~2018~~2019 and up ~~$0.2~~$1.0 million, or 6%34%, from the ~~first~~third quarter of 2018. The increase from the ~~prior quarter is related to a mortality gain and the increase from the first~~third quarter of 2018 is ~~related~~attributable to both mortality gains and incremental earnings on the ~~restructure~~additional investment of ~~a portion of our bank owned life insurance contracts during the third quarter of 2018.~~$33 million in April 2019.

Credit related fees were ~~$2.6~~$3.0 million for the ~~first~~third quarter of 2019, ~~down $0.6~~up $0.1 million, or ~~18%~~2%, from the ~~fourth~~second quarter of ~~2018~~2019 and ~~down $0.1~~up $0.2 million, or 5%8%, from the ~~first~~third quarter of 2018. The ~~linked-quarter decline~~linked quarter increase was due to ~~lower~~both higher unused commitment fees and letter of credit ~~and~~fees, with the increase over the same quarter last year primarily due to higher unused commitment ~~fees, primarily attributable to fewer energy-related participation relationships.~~fees.

Income from our customer interest rate derivative program ~~resulted in a $0.8~~totaled $4.3 million ~~net gain~~ for the ~~first~~third quarter of 2019 compared to ~~$0.9~~$3.6 million in the ~~fourth~~second quarter of ~~2018~~2019 and ~~$1.5~~$1.4 million for the ~~first~~third quarter of 2018. Increased derivative income reflects increased activity due to market conditions. Derivative income can be volatile and is dependent upon ~~both~~the composition of the portfolio, customer sales activity and market value adjustments due to market interest rate movement.

~~Gain on disposal~~Other miscellaneous income of ~~assets~~$4.7 million was ~~$0.4~~up $0.3 million, or 8%, compared to the second quarter of 2019 and $1.3 million, or 39%, compared to the third quarter of 2018. The increase compared to the prior quarter was due to higher syndication fees. The

increase compared to the third quarter of 2018 includes higher income from investments in small business investment companies of $1.2 million and $0.8 million higher syndication fees.

Noninterest income was $233.0 million in the first ~~quarter~~nine months of 2019, ~~primarily attributable~~up $22.4 million, or 11%, from the first nine months of 2018. Trust fees increased $6.4 million, or 16%, due to the ~~sale of mortgage loans. In the fourth quarter of 2018, we recorded a loss of $0.2~~trust and asset management acquisition in July 2018. Bank card and ATM fees were $49.1 million, ~~primarily attributable to fixed asset retirements.~~

~~Other miscellaneous income of $2.4 million was down $1.4~~up $4.3 million, or ~~36%~~10%, ~~compared~~due to increased card activity. Derivative income increased $4.3 million, or 95%, with increased activity and the changing interest rate environment. Income from bank-owned life insurance was up $2.2 million, or 24%, due to the ~~fourth~~third quarter 2018 restructure and the additional investment in April of ~~2018 and $1.0~~2019. Secondary mortgage market income was up $2.2 million, or ~~29%~~19%, ~~compared~~ to ~~the first quarter of 2018. The decrease compared~~$13.9 million due to ~~both periods was~~higher production and sales volumes. Investment and annuity fees and insurance commissions increased $1.1 million, or 6%. Service charges were down $0.8 million, or 1%, primarily due ~~largely~~ to lower ~~syndication~~consumer overdraft fees and ~~earnings from community development entities and other investments.~~service charges.

Noninterest expense for the ~~first~~third quarter of 2019 was ~~$175.7~~$213.6 million, ~~down $3.7~~up $30.0 million, or 2%16%, from the ~~fourth~~second quarter of ~~2018,~~2019, and up ~~$4.9~~$32.4 million, or 3%18%, from the ~~first~~third quarter of 2018. ~~Excluding nonoperating~~There were $28.8 million of expenses ~~operating expense for~~in the ~~first~~third quarter of 2019 ~~was down $1.2 million, or less than 1%,~~related to the acquisition and ~~up $10.9 million, or 7%, from the first quarter~~operational integration of ~~2018.~~

MidSouth Bancorp, Inc. There were no nonoperating ~~noninterest~~ expenses in the ~~first~~second quarter of ~~2019. Nonoperating noninterest expenses~~2019 and there were $4.8 million in the ~~fourth~~third quarter of 2018, ~~totaled $2.5 million and~~ primarily ~~included costs associated with Hurricane Michael damage,~~related to the trust and asset management ~~acquisition and~~acquisition. Items identified as nonoperating are those that, when excluded from a reported financial measure, provide management or the ~~move~~reader with a measure that may be more indicative of forward-looking trends in our business. Due to the late quarter timing of the ~~New Orleans Main regional headquarters. Nonoperating noninterest expenses for the first quarter of~~acquisition, MidSouth had limited impact to operating results.

~~2018 included costs of a one-time bonus, the brand consolidation project, the sale of the consumer finance company, and the acquisition of the trust and asset management business.~~ The components of noninterest ~~operating~~ and nonoperating expense for the periods indicated are presented in the following ~~tables for the indicated periods.~~tables.

	Three Months Ended									Three Months Ended									Nine Months Ended
	March 31,			December 31,			March 31,			September 30,			June 30,			September 30,			September 30,
(in thousands)	2019			2018			2018			2019			2019			2018			2019			2018
Operating expense
Noninterest expense
Compensation expense	$	83,968		$	86,508		$	76,743		$	93,858		$	87,747		$	84,389		$	265,573		$	244,374
Employee benefits		19,730			18,400			19,623			18,622			18,888			18,084			57,240			55,316
Personnel expense		103,698			104,908			96,366			112,480			106,635			102,473			322,813			299,690
Net occupancy expense		11,984			12,153			10,943			13,156			12,961			11,895			38,101			35,221
Equipment expense		4,679			3,827			3,493			4,685			4,342			4,520			13,706			12,328
Data processing expense		19,331			18,492			16,368			21,532			20,088			20,492			60,951			55,214
Professional services expense		8,168			9,390			7,847			17,704			9,665			9,555			35,537			32,191
Amortization of intangible assets		5,138			5,472			5,618			4,889			5,047			5,638			15,074			16,578
Deposit insurance and regulatory fees		5,406			6,754			7,948			3,995			4,755			8,345			14,156			24,669
Other real estate (income) expense		(991	)		(2,924	)		210
Other real estate and foreclosed assets (income) expense											2,055			395			16			1,459			(63	)
Advertising		3,080			3,934			2,341			5,435			3,253			2,553			11,768			8,596
Corporate value and franchise taxes		4,042			2,860			3,440			4,109			4,215			3,718			12,366			10,735
Printing and supplies		1,169			1,209			1,031			1,459			1,092			1,287			3,720			4,261
Telecommunications and postage		3,466			3,555			3,850			3,610			3,363			3,598			10,439			11,063
Travel expense		1,098			1,462			1,064			1,172			1,344			1,365			3,614			3,872
Entertainment and contributions		2,708			2,899			2,509			2,765			2,742			2,539			8,215			8,250
Tax credit investment expense		1,138			1,857			874
Tax credit investment amortization											1,286			1,234			1,560			3,658			3,309
Other retirement expense		(4,105	)		(5,076	)		(4,463	)		(4,152	)		(4,152	)		(4,664	)		(12,409	)		(13,585	)
Other miscellaneous		5,691			6,136			5,499			17,374			6,588			6,297			29,653			24,051
Total operating expense	$	175,700		$	176,908		$	164,938
Nonoperating expense items		-			2,458			5,853
Total noninterest expense	$	175,700		$	179,366		$	170,791		$	213,554		$	183,567		$	181,187		$	572,821		$	536,380

	Three Months Ended							Three Months Ended							Nine Months Ended
	March 31,		December 31,			March 31,		September 30,		June 30,		September 30,			September 30,
(in thousands)	2019		2018			2018		2019		2019		2018			2019		2018
Nonoperating expense
Personnel expense	$	—	$	97		$	3,608	$	5,002	$	—	$	1,300		$	5,002	$	5,316
Net occupancy expense		—		421			67		735		—		66			735		751
Equipment expense		—		212			53		188		—		896			188		1,570
Data processing expense		—		423			81		437		—		2,074			437		3,149
Professional services expense		—		(2	)		1,408		7,491		—		638			7,491		7,238
Advertising		—		(196	)		185		2,624		—		(360	)		2,624		952
Printing and supplies		—		78			255		433		—		5			433		1,106
Loss on restructure of bank-owned life insurance contracts		—		62			—		—		—		—			—		3,240
Other expense		—		1,363			196		11,900		—		208			11,900		3,163
Total nonoperating expenses	$	—	$	2,458		$	5,853	$	28,810	$	—	$	4,827		$	28,810	$	26,485

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

Personnel expense totaled ~~$103.7~~$112.5 million for the ~~first~~third quarter of 2019, ~~down $1.2~~up $6.1 million, or 1%7%, compared to the prior quarter, primarily due to ~~two fewer~~$5.0 million of merger-related expenses from the MidSouth acquisition, including severance and change in control expense, as well as one additional payroll ~~days in~~day. Compared to the ~~quarter. Personnel~~third quarter of 2018, personnel costs were up ~~$7.3~~$10.0 million, or 8%10%, ~~compared~~primarily related to ~~the first quarter of 2018 due to~~annual merit increases, an increase in incentives and ~~additional headcount following the trust and asset management acquisition.~~a $3.7 million increase in merger-related expense.

Occupancy and equipment expenses totaled ~~$16.7~~$17.8 million in the ~~first~~third quarter of 2019, up $ ~~0.7~~0.5 million, or 4%3%, from the ~~fourth~~second quarter of ~~2018~~2019 and up ~~$2.2~~$1.4 million, or ~~15%~~9%, from the ~~first~~third quarter of 2018. The increase compared to the prior quarter is largely due to ~~higher depreciation expense on furniture and equipment following~~additional merger-related expenses of $0.9 million from the MidSouth acquisition, partially offset by annual insurance payments in the second quarter of 2019. The increase compared to the third quarter of 2018 is largely attributable to the move of the New Orleans regional headquarters. ~~The increase compared to first quarter of 2018 is attributable to both the move of the regional headquarters and an increase in depreciation of new signage following the Company’s rebranding.~~

Data processing expense was ~~$19.3~~$21.5 million for the ~~first~~third quarter of 2019, up ~~$0.8~~$1.4 million, or 7%, from the second quarter of 2019, and $1.0 million, or 5%, from the ~~fourth~~third quarter of 2018. The increase from the second quarter of 2019 is primarily due to expenses resulting from increased card activity and merger-related expense from the MidSouth transaction. The increase from the third quarter of 2018 was primarily the result of expenses related to increased card activity and ~~up $3.0 million, or 18%,~~expenses from investments in new technology, partially offset by merger-related expenses in the third quarter of 2018 from the ~~first quarter of 2018.~~trust and asset management acquisition.

Professional ~~service~~services expense ~~totaled $8.2 million in~~for the ~~first~~third quarter of 2019 ~~down $1.2~~totaled $17.7 million, up $8.0 million, or ~~13%~~83%, compared to the previous quarter and up ~~$0.3~~$8.1 million, or ~~4% compared to the same quarter last year. The decrease~~85%, from the ~~prior~~third quarter ~~was~~of 2018. The increase over both periods is largely due to $7.5 million in expenses related to the MidSouth acquisition in the third quarter of 2019, including transaction-related expenses and costs related to systems integration. The increase over the third quarter of 2018 also includes a ~~decrease~~higher level of expense related to the investment in ~~costs associated with problem credits. Professional service expense includes legal, audit, accounting~~new technology aimed at becoming more scalable, effective and ~~other consulting services.~~efficient.

Deposit insurance and regulatory fees and corporate value and franchise taxes were ~~$9.4~~$8.1 million, ~~a decrease of $0.2~~down $0.9 million, or 2%10%, from the ~~fourth~~second quarter of ~~2018~~2019 and down ~~$1.9~~$4.0 million, or ~~17%~~33%, from the ~~first~~third quarter of 2018. ~~Deposit insurance and regulatory fees and corporate value and franchise taxes were down~~The decrease from both ~~quarter over~~the prior quarter and ~~year over year~~the same period in 2018 is primarily due to a reduction in the risk-based deposit insurance assessment fees, with the ~~year-over-year~~year over year variance also favorably impacted by the elimination of the ~~quarterly~~large bank deposit insurance fund surcharge.

Business development-related expenses (including advertising, travel, ~~and~~ entertainment and contributions) were ~~$6.9~~$9.4 million for the ~~first~~third quarter of 2019, ~~down $1.4~~up $2.0 million, or ~~17%~~28%, from the ~~fourth~~second quarter of ~~2018~~2019 and up ~~$1.0~~$2.9 million, or ~~16%~~45%, from the ~~first~~third quarter of 2018. The ~~primary driver~~linked-quarter and year-over-year increase was largely due to $3.2 million of ~~the decrease from the prior quarter and the increase from the same quarter a year ago is~~merger-related expenses, primarily advertising ~~expenditures.~~expense.

Other real estate ~~income~~and foreclosed asset (income) expense was ~~$1.0~~$2.1 million for the ~~first~~third quarter of 2019, compared to ~~$2.9~~$0.4 million in the ~~fourth quarter of 2018 and a net expense of $0.2 million in the first quarter of 2018. The first~~second quarter of 2019 and ~~fourth~~less than $0.1 million in the third quarter of ~~2018 reflect gains~~2018. Third quarter of 2019 expense includes a non-cash write-down of foreclosed assets, partially offset by a gain on ~~dispositions~~the sale of ~~properties in excess~~a former corporate office building. Management believes that the second quarter of ~~holding costs.~~ 2019 reflects a more typical level of other real estate and foreclosed asset expense.

All other expenses, excluding amortization of intangibles, totaled $19.6 million for the third quarter of 2019, an increase of $11.5 million from both the second quarter of 2019 and third quarter of 2018. The linked-quarter and year-over-year increase is primarily due to expenses associated with the MidSouth acquisition, including contract buyouts, lease terminations, and other merger-related costs.

Noninterest expense for the first nine months of 2019 was $572.8 million, an increase of $36.4 million, or 7%, from the same period in 2018. The first nine months of 2019 includes $28.8 million of merger-related MidSouth expenses and the first nine months of 2018 includes $26.5 million of nonoperating expenses related to the brand consolidation, the trust and asset management business acquisition, the relocation of the New Orleans regional headquarters, a charge related to the restructure of our bank-owned life insurance contracts, as well as a one-time all hands bonus and other miscellaneous items. Personnel expense ~~items,~~for the nine months ended September 30, 2019 totaled ~~$7.4~~$322.8 million, up $23.1 million, or 8%. Occupancy and equipment expenses totaled $51.8 million, up $4.3 million, or 9%. Data processing expense was $61.0 million, an increase of $5.7 million, or 10%. Professional service expense was $35.5 million for the first ~~quarter~~nine months of 2019, ~~down $0.3~~up $3.3 million, or ~~4%, from the fourth quarter of 2018,~~10%. Deposit insurance and ~~up $0.6~~regulatory fees and corporate value and franchise taxes were down $8.9 million, or ~~8%,~~25%. Business development-related expenses were $24.0 million, up $2.9 million, or 14%. All other expenses, excluding amortization of intangibles, were up $6.0 million, or 20%. The increase in noninterest expense from the first ~~quarter~~nine months in 2018 is in large part attributable to annual merit raises, increased expenses related to the trust and asset management business acquired in July of ~~2018.~~2018, investment in new technologies, and the relocation of the New Orleans regional headquarters. The ~~variances compared~~decline in deposit insurance and regulatory fees and corporate value and franchise tax expense is due to ~~prior quarter~~a reduction in the risk-based deposit insurance assessment fees and ~~prior year were largely driven by changes in tax credit investment expense,~~ the ~~net credit for other retirement expense and other miscellaneous expense.~~elimination of the large bank deposit insurance fund surcharge.

The effective income tax rate for the ~~first~~third quarter of 2019 was approximately ~~17.6%~~15.5%, compared to ~~7.9%~~17.9% in the ~~fourth~~second quarter of ~~2018~~2019 and ~~18.5%~~17.5% in the ~~first~~third quarter of 2018. The decrease in the effective tax rate ~~was lower in~~from the ~~fourth~~prior quarter ~~of 2018~~is primarily ~~due to the $9.9 million income tax benefit~~ attributable to the ~~2017 tax savings initiatives implemented following~~benefit of including the ~~passage~~impact of ~~the Tax Cuts and Jobs Act (“Tax Act”), which, among other things, lowered the corporate federal income tax rate from 35% to 21%. The fourth quarter 2018~~merger-related costs in our estimated annual effective tax ~~rate excluding impact of the tax savings initiatives would have been 17.5%, which is comparable to the first quarter 2019 effective tax~~ rate.

Management expects the effective tax rate for 2019 will be approximately 17% in the ~~range of 17%-19%~~fourth quarter and full year 2019, based on current forecasts.

Our effective tax rate has historically varied from the federal statutory rate primarily because of tax-exempt income and tax credits. Interest income on bonds issued by or loans to state and municipal governments and authorities, and earnings from the life insurance contract program are the major components of tax-exempt income. The main source of tax credits has been investments in 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”) as well as Federal and State New Market 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 Tax Act repealed the provision related to tax credit bonds effective for bonds issued after December 31, 2017.

We have invested in NMTC projects through investments in our own Community Development Entity (“CDE”), as well as other unrelated CDEs. 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.

Based on tax credit investments that have been made to date and those anticipated to be made utilizing the remaining portion of our $50 million NMTC allocation award received in 2018, we expect to realize benefits from federal and state tax credits over the next three years totaling $7.5 million, $5.6 million and $4.9 million for 2020, 2021 and 2022, respectively. We intend to continue making investments in tax credit projects. However, our ability to access new credits will depend upon, among other factors, federal and state tax policies and the level of competition for such credits.

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

	Three Months Ended									Three Months Ended									Nine Months Ended
	March 31,			December 31,			March 31,			September 30,			June 30,			September 30,			September 30,
(in thousands)	2019			2018			2018			2019			2019			2018			2019			2018
Taxes computed at statutory rate	$	20,163		$	21,946		$	18,663		$	16,841		$	22,567		$	21,347		$	59,571		$	58,298
Tax credits:
QZAB/QSCB		(710	)		(759	)		(759	)		(710	)		(710	)		(760	)		(2,130	)		(2,279	)
NMTC - Federal and State		(1,402	)		(3,805	)		(1,379	)		(1,701	)		(1,999	)		(1,379	)		(5,102	)		(4,136	)
LIHTC and other tax credits		—			(365	)		—
Total tax credits		(2,112	)		(4,929	)		(2,138	)		(2,411	)		(2,709	)		(2,139	)		(7,232	)		(6,415	)
State income taxes, net of federal income tax benefit		1,905			2,813			2,044			1,519			1,756			1,989			5,180			5,957
Tax-exempt interest		(2,417	)		(2,536	)		(2,786	)		(2,881	)		(2,274	)		(2,720	)		(7,572	)		(8,267	)
Life insurance contracts		(678	)		(529	)		(930	)		(1,266	)		(927	)		(866	)		(2,871	)		(1,490	)
Employee share-based compensation		(272	)		(919	)		(140	)		(85	)		(74	)		(146	)		(431	)		(461	)
Impact from interim estimated effective tax rate		(776	)		1,152			356			(289	)		27			(664	)		(1,038	)		(1,152	)
FDIC assessment disallowance		545			566			747
Return to provision adjustment		—			(9,942	)		—
FDIC Assessment Disallowance											443			379			748			1,367			2,252
Other, net		492			643			581			516			441			226			1,449			1,359
Income tax expense	$	16,850		$	8,265		$	16,397		$	12,387		$	19,186		$	17,775		$	48,423		$	50,081

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

	Three Months Ended						Three Months Ended						Nine Months Ended
	March 31,		December 31,		March 31,		September 30,		June 30,		September 30,		September 30,
	2019		2018		2018		2019		2019		2018		2019		2018
Common Share Data
Earnings per share:
Basic	$	0.91	$	1.11	$	0.83	$	0.77	$	1.01	$	0.96	$	2.69	$	2.62
Diluted	$	0.91	$	1.10	$	0.83	$	0.77	$	1.01	$	0.96	$	2.69	$	2.61
Cash dividends paid	$	0.27	$	0.27	$	0.24	$	0.27	$	0.27	$	0.27	$	0.81	$	0.75
Book value per share (period-end)	$	37.23	$	35.98	$	33.96	$	39.49	$	38.70	$	34.90	$	39.49	$	34.90
Tangible book value per share (period-end)	$	26.92	$	25.62	$	24.22	$	28.73	$	28.46	$	24.44	$	28.73	$	24.44
Weighted average number of shares (000s):
Basic		85,688		85,522		82,241		86,377		85,728		85,348		85,934		85,298
Diluted		85,800		85,677		85,423		86,462		85,835		85,539		86,010		85,482
Period-end number of shares (000s)		85,710		85,643		85,285		90,822		85,759		85,364		90,822		85,364
Market data:
High sales price	$	44.34	$	49.22	$	56.40	$	42.11	$	44.74	$	53.00	$	44.74	$	56.40
Low sales price	$	34.11	$	32.59	$	49.48	$	33.63	$	37.03	$	46.05	$	33.63	$	45.76
Period-end closing price	$	40.40	$	34.77	$	51.70	$	38.30	$	40.06	$	47.55	$	38.30	$	47.55
Trading volume (000s) (a)		28,124		33,269		35,459		29,038		27,874		28,332		85,037		99,407

	Three Months Ended						Nine Months Ended
	September 30,		June 30,		September 30,		September 30,
(in thousands)	2019		2019		2018		2019		2018
Income Statement:
Interest income	$	283,164	$	280,378	$	263,212	$	839,825	$	756,911
Interest income (te) (a)		286,816		284,096		267,307		851,019		769,050
Interest expense		60,225		60,510		49,018		177,764		125,506
Net interest income (te)		226,591		223,586		218,289		673,255		643,544
Provision for loan and lease losses		12,421		8,088		6,872		38,552		28,016
Noninterest income		83,230		79,250		75,518		232,983		210,602
Noninterest expense (excluding amortization of intangibles)		208,665		178,520		175,549		557,747		519,802
Amortization of intangibles		4,889		5,047		5,638		15,074		16,578
Income before income taxes		80,194		107,463		101,653		283,671		277,611
Income tax expense		12,387		19,186		17,775		48,423		50,081
Net income	$	67,807	$	88,277	$	83,878	$	235,248	$	227,530

Nonoperating items, pre-tax (for informational purpose
Provision for alleged fraud (b)		—		—		—		10,084		—
Loss on sale of business		—		—		—		—		1,145
Merger-related expenses		28,810		—		3,853		28,810		5,707
Other nonoperating expenses		—		—		974		—		20,778
Nonoperating items, pre-tax		28,810		—		4,827		38,894		27,630

	Three Months Ended									Three Months Ended									Nine Months Ended
	March 31,			December 31,			March 31,			September 30,			June 30,			September 30,			September 30,
	2019			2018			2018			2019			2019			2018			2019			2018
Performance Ratios
Return on average assets		1.13	%		1.35	%		1.08	%		0.92	%		1.24	%		1.19	%		1.10	%		1.10	%
Return on average common equity		10.30	%		12.76	%		10.23	%		7.95	%		10.96	%		11.27	%		9.69	%		10.45	%
Return on average tangible common equity		14.38	%		18.15	%		14.41	%		10.77	%		15.07	%		16.11	%		13.32	%		14.75	%
Earning asset yield (te) (a)		4.35	%		4.21	%		3.95	%		4.31	%		4.38	%		4.11	%		4.35	%		4.04	%
Total cost of funds		0.89	%		0.82	%		0.58	%		0.90	%		0.93	%		0.75	%		0.91	%		0.66	%
Net interest margin (te)		3.46	%		3.39	%		3.37	%		3.41	%		3.45	%		3.36	%		3.44	%		3.38	%
Noninterest income to total revenue (te)		24.01	%		25.18	%		24.01	%		26.86	%		26.17	%		25.70	%		25.71	%		24.66	%
Efficiency ratio (c)											58.05	%		58.95	%		58.11	%		58.37	%		57.68	%
Average loan/deposit ratio		87.08	%		88.09	%		86.32	%		87.47	%		87.09	%		88.39	%		87.21	%		87.19	%
FTE employees (period-end)		3,885			3,933			3,775			3,894			3,930			3,858			3,894			3,858
Capital Ratios
Common stockholders' equity to total assets		11.20	%		10.91	%		10.61	%		11.74	%		11.54	%		10.60	%		11.74	%		10.60	%
Tangible common equity ratio (c)		8.36	%		8.02	%		7.80	%

Select performance measures excluding nonoperating items
Operating earnings per share - diluted (d)	$	1.00		$	1.12		$	0.90
Return on average assets - operating		1.24	%		1.37	%		1.17	%
Return on average common equity - operating		11.33	%		12.95	%		11.05	%
Return on average tangible common equity - operating		15.83	%		18.43	%		15.56	%
Efficiency ratio (e)		58.10	%		58.03	%		57.51	%
Noninterest income as a percent of total revenue (te) - operating		24.01	%		25.03	%		24.33	%
Tangible common equity ratio (d)											8.82	%		8.75	%		7.67	%		8.82	%		7.67	%

	Three Months Ended									Three Months Ended									Nine Months Ended
	March 31,			December 31,			March 31,			September 30,			June 30,			September 30,			September 30,
($ in thousands)	2019			2018			2018			2019			2019			2018			2019			2018
Asset Quality Information
Nonaccrual loans (a)	$	204,831		$	187,295		$	275,179		$	222,860		$	209,831		$	201,646		$	222,860		$	201,646
Restructured loans - still accruing		117,578			139,042			166,520			60,897			101,250			162,189			60,897			162,189
Total nonperforming loans		322,409			326,337			441,699			283,757			311,081			363,835			283,757			363,835
Other real estate (ORE) and foreclosed assets		27,148			26,270			26,630			30,955			27,520			27,475			30,955			27,475
Total nonperforming assets	$	349,557		$	352,607		$	468,329		$	314,712		$	338,601		$	391,310		$	314,712		$	391,310
Accruing loans 90 days past due (b)	$	20,308		$	5,589		$	12,724		$	7,872		$	6,493		$	24,460		$	7,872		$	24,460
Net charge-offs		17,869			28,136			12,200			12,474			7,151			6,852			37,494			24,126
Allowance for loan and lease losses		194,688			194,514			210,713			195,572			195,625			214,550			195,572			214,550
Provision for loan and lease losses		18,043			8,100			12,253			12,421			8,088			6,872			38,552			28,016
Ratios:
Nonperforming assets to loans, ORE and foreclosed assets		1.74	%		1.76	%		2.45	%		1.49	%		1.68	%		2.00	%		1.49	%		2.00	%
Accruing loans 90 days past due to loans		0.10	%		0.03	%		0.07	%		0.04	%		0.03	%		0.13	%		0.04	%		0.13	%
Nonperforming assets + accruing loans 90 days past due to loans, ORE and foreclosed assets		1.84	%		1.79	%		2.52	%		1.53	%		1.71	%		2.12	%		1.53	%		2.12	%
Net charge-offs to average loans		0.36	%		0.56	%		0.26	%		0.25	%		0.14	%		0.14	%		0.25	%		0.17	%
Allowance for loan losses to period-end loans		0.97	%		0.97	%		1.10	%		0.93	%		0.97	%		1.10	%		0.93	%		1.10	%
Allowance for loan losses to nonperforming loans + accruing loans 90 days past due		56.81	%		58.60	%		46.37	%		67.06	%		61.60	%		55.25	%		67.06	%		55.25	%

	March 31,			December 31,			September 30,			June 30,			March 31,			September 30,			June 30,			March 31,			December 31,			September 30,
(in thousands)	2019			2018			2018			2018			2018			2019			2019			2019			2018			2018
Period-End Balance Sheet
Total loans, net of unearned income	$	20,112,838		$	20,026,411		$	19,543,717		$	19,370,917		$	19,092,504
Total loans																$	21,035,952		$	20,175,812		$	20,112,838		$	20,026,411		$	19,543,717
Loans held for sale		27,437			28,150			29,043			36,047			21,827			75,789			36,150			27,437			28,150			29,043
Securities		5,577,522			5,670,584			5,987,447			6,113,873			5,930,076			6,404,719			5,725,735			5,577,522			5,670,584			5,987,447
Short-term investments		163,762			111,094			108,074			104,210			61,541			49,513			151,062			163,762			111,094			108,074
Earning assets		25,881,559			25,836,239			25,668,281			25,625,047			25,105,948			27,565,973			26,088,759			25,881,559			25,836,239			25,668,281
Allowance for loan losses		(194,688	)		(194,514	)		(214,550	)		(214,530	)		(210,713	)		(195,572	)		(195,625	)		(194,688	)		(194,514	)		(214,550	)
Goodwill and other intangible assets		883,097			887,123			892,595			825,223			830,544			977,369			878,051			883,097			887,123			892,595
Other assets		1,920,263			1,707,059			1,751,849			1,689,707			1,571,558			2,195,779			1,990,678			1,920,263			1,707,059			1,751,849
Total assets	$	28,490,231		$	28,235,907		$	28,098,175		$	27,925,447		$	27,297,337		$	30,543,549		$	28,761,863		$	28,490,231		$	28,235,907		$	28,098,175
Noninterest-bearing deposits	$	8,158,658		$	8,499,027		$	8,140,530		$	8,165,796		$	8,230,060		$	8,686,383		$	8,114,632		$	8,158,658		$	8,499,027		$	8,140,530
Interest-bearing transaction and savings deposits		8,224,203			8,000,093			7,972,417			7,711,542			8,058,793			8,758,993			8,034,801			8,224,203			8,000,093			7,972,417
Interest-bearing public funds deposits		3,229,589			3,006,516			2,613,858			2,854,839			3,108,008			2,954,966			3,159,790			3,229,589			3,006,516			2,613,858
Time deposits		3,767,844			3,644,549			3,691,002			3,503,161			3,088,861			3,800,957			3,926,819			3,767,844			3,644,549			3,691,002
Total interest-bearing deposits		15,221,636			14,651,158			14,277,277			14,069,542			14,255,662			15,514,916			15,121,410			15,221,636			14,651,158			14,277,277
Total deposits		23,380,294			23,150,185			22,417,807			22,235,338			22,485,722			24,201,299			23,236,042			23,380,294			23,150,185			22,417,807
Short-term borrowings		1,388,735			1,589,128			2,276,647			2,314,190			1,452,097			2,108,815			1,641,598			1,388,735			1,589,128			2,276,647
Long-term debt		224,962			224,993			215,912			266,009			300,443			246,641			232,754			224,962			224,993			215,912
Other liabilities		305,665			190,261			208,931			180,355			163,037			400,414			332,554			305,665			190,261			208,931
Stockholders' equity		3,190,575			3,081,340			2,978,878			2,929,555			2,896,038			3,586,380			3,318,915			3,190,575			3,081,340			2,978,878
Total liabilities & stockholders' equity	$	28,490,231		$	28,235,907		$	28,098,175		$	27,925,447		$	27,297,337		$	30,543,549		$	28,761,863		$	28,490,231		$	28,235,907		$	28,098,175

	Three Months Ended									Three Months Ended									Nine Months Ended
	March 31,			December 31,			March 31,			September 30,			June 30,			September 30,			September 30,
(in thousands)	2019			2018			2018			2019			2019			2018			2019			2018
Average Balance Sheet
Total loans, net of unearned income	$	20,126,948		$	19,817,729		$	19,028,490
Total loans										$	20,197,114		$	20,150,104		$	19,464,639		$	20,158,313		$	19,230,385
Loans held for sale		20,618			22,187			32,194			55,348			27,873			25,992			34,740			26,898
Securities (a)		5,656,689			5,965,461			5,897,290			6,004,688			5,586,390			6,186,410			5,750,530			6,039,645
Short-term investments		216,192			205,806			148,309			180,463			228,527			155,331			208,263			148,958
Earning assets		26,020,447			26,011,183			25,106,283			26,437,613			25,992,894			25,832,372			26,151,846			25,445,886
Allowance for loan losses		(196,384	)		(213,902	)		(216,796	)		(197,259	)		(195,238	)		(214,376	)		(196,297	)		(214,637	)
Goodwill and other intangible assets		885,381			889,820			833,269			886,868			880,497			886,226			884,254			849,279
Other assets		1,742,104			1,572,862			1,514,321			2,020,884			1,859,657			1,522,701			1,875,236			1,505,382
Total assets	$	28,451,548		$	28,259,963		$	27,237,077		$	29,148,106		$	28,537,810		$	28,026,923		$	28,715,039		$	27,585,910
Noninterest-bearing deposits	$	8,227,698		$	8,260,487		$	7,951,121		$	8,092,482		$	8,099,621		$	8,017,353		$	8,139,439		$	8,039,574
Interest-bearing transaction and savings deposits		8,082,584			7,940,670			8,043,176			8,179,240			8,026,012			7,944,349			8,096,299			7,948,819
Interest-bearing public fund deposits		3,060,565			2,680,837			3,070,079			2,979,494			3,194,113			2,682,269			3,077,760			2,906,067
Time deposits		3,743,292			3,616,151			2,979,043			3,840,139			3,817,817			3,377,588			3,800,771			3,160,943
Total interest-bearing deposits		14,886,441			14,237,658			14,092,298			14,998,873			15,037,942			14,004,206			14,974,830			14,015,829
Total deposits		23,114,139			22,498,145			22,043,419			23,091,355			23,137,563			22,021,559			23,114,269			22,055,403
Short-term borrowings		1,684,904			2,330,280			1,823,033			2,063,335			1,617,776			2,610,176			1,790,058			2,143,759
Long-term debt		224,966			222,339			305,117			234,240			232,277			241,517			230,528			281,876
Other liabilities		309,488			215,934			192,695			375,438			319,691			201,240			335,113			193,166
Stockholders' equity		3,118,051			2,993,265			2,872,813			3,383,738			3,230,503			2,952,431			3,245,071			2,911,706
Total liabilities & stockholders' equity	$	28,451,548		$	28,259,963		$	27,237,077		$	29,148,106		$	28,537,810		$	28,026,923		$	28,715,039		$	27,585,910

	Three Months Ended															Three Months Ended									Nine Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,			September 30,			June 30,			September 30,			September 30,
(in thousands)	2019			2018			2018			2018			2018			2019			2019			2018			2019			2018
Net interest income	$	219,254		$	217,433		$	214,194		$	211,547		$	205,664		$	222,939		$	219,868		$	214,194		$	662,061		$	631,405
Noninterest income		70,503			74,538			75,518			68,832			66,252			83,230			79,250			75,518			232,983			210,602
Total revenue	$	289,757		$	291,971		$	289,712		$	280,379		$	271,916		$	306,169		$	299,118		$	289,712		$	895,044		$	842,007
Tax-equivalent adjustment (a)		3,824			4,038			4,095			4,081			3,963			3,652			3,718			4,095			11,194			12,139
Nonoperating revenue		—			(604	)		—			—			1,145			—			—			—			—			1,145
Operating revenue (te)	$	293,581		$	295,405		$	293,807		$	284,460		$	277,024		$	309,821		$	302,836		$	293,807		$	906,238		$	855,291
Noninterest expense		(175,700	)		(179,366	)		(181,187	)		(184,402	)		(170,791	)		(213,554	)		(183,567	)		(181,187	)		(572,821	)		(536,380	)
Nonoperating expense		-			2,458			4,827			15,805			5,853			28,810			—			4,827			28,810			26,485
Operating pre-provision net revenue (te)	$	117,881		$	118,497		$	117,447		$	115,863		$	112,086
Operating pre-prevision net revenue (te)																$	125,077		$	119,269		$	117,447		$	362,227		$	345,396

	Three Months Ended															Three Months Ended									Nine Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,			September 30,			June 30,			September 30,			September 30,
(in thousands)	2019			2018			2018			2018			2018			2019			2019			2018			2019			2018
Net income	$	79,164		$	96,240		$	83,878		$	71,177		$	72,475		$	67,807		$	88,277		$	83,878		$	235,248		$	227,530
Net income allocated to participating securities		(1,337	)		(1,691	)		(1,544	)		(1,328	)		(1,366	)		(1,141	)		(1,502	)		(1,544	)		(3,980	)		(4,238	)
Net income available to common shareholders		77,827			94,549			82,334			69,849			71,109			66,666			86,775			82,334			231,268			223,292
Nonoperating items, net of applicable income tax		7,966			1,465			3,813			12,486			5,782			22,760			—			3,813			30,720			22,081
Nonoperating items allocated to participating securities		(134	)		(26	)		(71	)		(233	)		(109	)		(383	)		—			(71	)		(517	)		(413	)
Operating earnings available to common shareholders		85,659			95,988			86,076			82,102			76,782			89,043			86,775			86,076			261,471			244,960
Weighted average common shares - diluted		85,800			85,677			85,539			85,483			85,423			86,462			85,835			85,539			86,010			85,482
Earnings per share - diluted	$	0.91		$	1.10		$	0.96		$	0.82		$	0.83		$	0.77		$	1.01		$	0.96		$	2.69		$	2.61
Operating earnings per share - diluted	$	1.00		$	1.12		$	1.01		$	0.96		$	0.90		$	1.03		$	1.01		$	1.01		$	3.04		$	2.87

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. We develop liquidity management strategies and measure and monitor liquidity risk as part of our overall asset/liability management process.

The asset portion of the balance sheet provides liquidity primarily through loan principal repayments, maturities and repayments of investment securities and occasional sales of various assets. 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. Management has established an internal target for the ratio of free securities to total securities to be 20% or more. As shown in the table below, our ratio of free securities to total securities was ~~33.57%~~54.44% at ~~March 31,~~September 30, 2019, compared to ~~41.39%~~40.10% at ~~December 31, 2018~~June 30, 2019 and ~~43.35%~~48.90% at ~~March 31,~~September 30, 2018. The total of pledged securities at ~~March 31,~~September 30, 2019 was ~~$3.7~~$3.0 billion, ~~up $391.2~~down $511.5 million from ~~December 31, 2018.~~June 30, 2019 as we used FHLB letters of credit as collateral during the quarter, impacting the availability on that line. Securities and FHLB letters of credit are pledged as collateral related to public funds and repurchase agreements. ~~Total~~Also impacting the free securities ~~of $5.6 billion at March 31, 2019 were down $93.1~~ratio was an increase in total securities available for pledging, up $698.2 million compared to ~~December 31,~~June 30, 2019 and $442.3 million compared to September 30, 2018, ~~and $297.7 million lower than at March 31, 2018.~~as the Company acquired bonds during third quarter of 2019 in anticipation of the MidSouth acquisition. The total bond portfolio is expected to decrease to our targeted level of approximately $6.2 billion during the fourth quarter of 2019.

	March 31,			December 31,			September 30,			June 30,			March 31,			September 30,			June 30,			March 31,			December 31,			September 30,
Liquidity Metrics	2019			2018			2018			2018			2018			2019			2019			2019			2018			2018
Free securities / total securities		33.57	%		41.39	%		48.90	%		49.31	%		43.35	%		54.44	%		40.10	%		33.57	%		41.39	%		48.90	%
Core deposits / total deposits		89.98	%		90.47	%		89.71	%		89.65	%		90.94	%		90.31	%		89.30	%		89.98	%		90.47	%		89.71	%
Wholesale funds / core deposits		13.61	%		14.53	%		19.34	%		19.93	%		14.32	%		15.54	%		15.13	%		13.61	%		14.53	%		19.34	%
Quarterly average loans /quarterly average deposits		87.08	%		88.09	%		88.39	%		86.84	%		86.32	%
Quarter-to-date average loans /quarter-to-date average deposits																	87.47	%		87.09	%		87.08	%		88.09	%		88.39	%

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. At ~~March 31,~~September 30, 2019, deposits totaled ~~$23.4~~$24.2 billion, an increase of ~~$230.1~~$965.3 million, or 1%4%, from ~~December 31, 2018~~June 30, 2019 and an increase of ~~$894.6 million,~~$1.8 billion, or 4%8%, from ~~March 31,~~September 30, 2018. The increase over both periods is due largely to the acquisition of $1.3 billion in deposits in the MidSouth transaction. Core deposits consist of total deposits excluding certificates of deposit (“CDs”) of $250,000 or more and brokered deposits. Core deposits totaled ~~$21.0~~$21.9 billion at ~~March 31,~~September 30, 2019, an increase of ~~$93.6 million~~$1.1 billion from ~~December 31, 2018,~~June 30, 2019, and ~~$591.2 million~~$1.7 billion from ~~March 31,~~September 30, 2018. The ratio of core deposits to total deposits was ~~89.98%~~90.31% at ~~March 31,~~September 30, 2019, compared to ~~90.47%~~89.30% at ~~December31, 2018~~June 30, 2019 and ~~90.94%~~89.71% at ~~March 31,~~September 30, 2018. Brokered deposits totaled ~~$1.2~~$1.0 billion as of ~~March 31,~~September 30, 2019, ~~an increase~~a decrease of ~~$21.2~~$223.1 million compared to ~~December 31, 2018~~June 30, 2019 and ~~$74.9~~$354.8 million compared to ~~March 31,~~September 30, 2018. The use of brokered deposits as a funding source is subject to certain policies regarding the amount, term and interest rate.

Purchases of federal funds, securities sold under agreements to repurchase and other short-term borrowings from customers provide additional sources of liquidity to meet short-term funding requirements. Besides funding from customer sources, the Bank has a line of credit with the FHLB that is secured by blanket pledges of certain mortgage loans. At ~~March 31,~~September 30, 2019, the Bank had borrowings of approximately ~~$900 million~~$1.4 billion and had approximately ~~$3.8~~$3.0 billion available under this line. The Bank also has unused borrowing capacity at the Federal Reserve’s discount window of approximately ~~$2.7~~$2.5 billion; there were no outstanding borrowings with the Federal Reserve at any date during any period covered by this report.

Wholesale funds, which are comprised of short-term borrowings, long-term debt and brokered deposits were ~~13.61%~~15.54% of core deposits at ~~March 31,~~September 30, 2019, compared to ~~14.53%~~15.13% at ~~December 31, 2018~~June 30, 2019 and ~~14.32%~~19.34% at ~~March 31,~~September 30, 2018. The linked quarter ~~decrease~~increase in wholesale funds was primarily related to ~~decreases~~increases in FHLB ~~borrowings.~~borrowings and federal funds purchased, partially offset by a decrease in brokered certificates of deposit and repurchase agreements. The year over year decrease in wholesale funds was primarily related to decreases in FHLB borrowings ~~long-term debt~~and brokered certificates of deposit, partially offset by an increase in repurchase agreements and federal funds ~~purchased, partially offset by increases in brokered deposits and repurchase agreements.~~purchased. The Company has established an internal target for wholesale funds to be less than 25% of core deposits.

Another key measure used to monitor our 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 for each dollar of deposits on hand. Our average loan-to-deposit ratio for the ~~first~~third quarter of 2019 was ~~87.08%~~87.47%, compared to ~~88.09%~~87.09% for the ~~fourth~~second quarter of ~~2018~~2019 and ~~86.32%~~88.39% for the ~~first~~third quarter of 2018. Management has an established target range for the loan-to-deposit ratio of 87% to 89%. , which could be exceeded under certain circumstances.

Cash generated from operations is another important source of funds to meet liquidity needs. The consolidated statements of cash flows present operating cash flows and summarize all significant sources and uses of funds for the ~~three~~nine months ended ~~March 31,~~September 30, 2019 and 2018.

Dividends received from the Bank have been the primary source of funds available to the Parent 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. The Parent targets cash and other liquid assets to provide liquidity in an amount sufficient to fund approximately ~~six~~four quarters of anticipated common stockholder dividends, but will temporarily operate below that level if a return to the target can be achieved in the near-term. On September 23, 2019, the Bank declared a special dividend of $150 million to the Parent to assist in the completion of the MidSouth acquisition and provide additional liquidity for the approved share buyback program and other activity of the Parent.

Stockholders’ equity totaled ~~$3.2~~$3.6 billion at ~~March 31,~~September 30, 2019, up ~~$109~~$267.5 million, or 4%8%, from ~~December 31, 2018~~June 30, 2019 and ~~up $295~~$607.5 million, or ~~10%~~20%, from ~~March 31,~~September 30, 2018. The tangible common equity ratio was ~~8.36 %~~8.82% at ~~March 31,~~September 30, 2019, compared to ~~8.02%~~8.75% at ~~December 31, 2018~~June 30, 2019 and ~~7.80%~~7.67% at ~~March 31,~~September 30, 2018. The increase in the tangible common equity ratio from ~~prior quarter is due~~both June 30, 2019 and September 30, 2018 was primarily attributable to ~~increases~~growth in net tangible retained earnings and net gains on fair value adjustments of securities available for sale included in other accumulated comprehensive ~~income. The increase from March 31, 2018 was primarily related to the change in net tangible retained earnings and the reduction in accumulated other comprehensive losses,~~loss, partially offset by the impact of the MidSouth acquisition and other growth in tangible ~~asset growth and an increase in intangible assets related to acquisition transactions.~~assets. Management has established an internal target for the tangible common equity ratio of at least 8.00%; however,

management will allow the 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 within a short time frame.

The regulatory capital ratios of the Company and the Bank ~~as of March 31,~~at September 30, 2019 ~~continued to improve and~~ remained well in excess of current regulatory minimum requirements. The decline in Bank regulatory capital ratios compared to the prior quarter was due in part to a special $150 million dividend from the Bank to the Parent in the third quarter of 2019 to assist in the MidSouth transaction and provide additional liquidity for the approved buyback program and other activities of the Parent. The Company and the Bank have been categorized as “well-capitalized” in the most recent notices received from our regulators. Both entities currently exceed all capital requirements of the Basel III ~~requirements, including the fully phased-in conservation buffer.~~requirements. Refer to the Supervision and Regulation section in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 for further discussion of our 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. ~~The Company’s and Bank’s regulatory filings for~~

On July 29, 2019, our board of directors declared a regular third quarter ~~ended March 31, 2018 were filed~~cash dividend of $0.27 per share, consistent with the prior quarter.

On September 21, 2019, we issued approximately 5.0 million shares of common stock at $38.42 as consideration in the ~~names~~acquisition of ~~Hancock Holding Company and Whitney Bank, respectively.~~MidSouth. Refer to Note 2 – Business Combinations for more information regarding this transaction.

On May 24, 2018, ~~our~~the Company’s board of directors approved a stock buyback program ~~that~~whereby the Company was authorized ~~the~~to repurchase of up to 5%, or ~~approximately~~ 4.3 million shares, of ~~outstanding~~85.3 million shares common ~~stock.~~stock then outstanding. The program was set to expire on December 31, 2019. Under this program, 200,000 shares of the Company’s common stock were repurchased at an average price of $41.30 per share.

On September 23, 2019, the Company’s board of directors approved a new stock buyback program ~~allows us~~that authorizes the Company to repurchase up to 5.5 million shares of our common stock ~~either~~through the expiration date of December 31, 2020. The program allows the Company to repurchase its common shares in the open market, ~~in compliance with Rule 10b-18 promulgated under the Securities Exchange Act of 1934, as amended, or~~by block purchase, through accelerated share repurchase programs, in privately negotiated transactions, ~~with non-affiliated sellers~~ or as otherwise determined by the Company in one or more ~~transactions, from time to time until December 31, 2019.~~transactions. The Company is not obligated to purchase any shares under this program, and the board of directors may terminate or amend the program at any time prior to the ~~expiration. As~~expiration date.

Subsequent to quarter end, we entered into an accelerated share repurchase (“ASR”) agreement with Morgan Stanley & Co. LLC (“Morgan Stanley”) to repurchase $185 million of ~~March 31,~~our common stock. Pursuant to the ASR agreement, we made a $185 million payment to Morgan Stanley on October 21, 2019, ~~we had purchased 200,000~~and received from Morgan Stanley on the same day an initial delivery of approximately 3.6 million shares of our common stock, ~~at an~~which represents 75% of the estimated total number of shares to be repurchased based on the October 18, 2019 closing price of our common stock. The final number of shares to be repurchased will be based generally on the volume-weighted average price ~~of $41.30~~ per share ~~under this program.~~

~~On January 28, 2019,~~of our ~~board~~common stock during the term of ~~directors declared~~ the ~~regular first~~ASR agreement, less a discount, and subject to possible adjustments in accordance with the terms of the ASR agreement. Final settlement of the ASR agreement is scheduled to occur no later than the third quarter ~~cash dividend at $0.27 per share, the same as prior quarter. The Company has paid uninterrupted quarterly dividends to shareholders since 1967.~~of 2020.

Investment in securities totaled ~~$5.6~~$6.4 billion at ~~March 31,~~September 30, 2019, ~~down $93.1~~up $679 million, or 2%12%, from ~~at December 31, 2018~~June 30, 2019 and ~~down $352.6~~up $417 million, or 6%7%, from ~~March 31,~~September 30, 2018. At ~~March 31,~~September 30, 2019, securities available for sale totaled ~~$2.7~~$3.5 billion and securities held to maturity totaled $2.9 billion.

Our securities portfolio consists mainly of residential and commercial mortgage-backed securities and collateralized mortgage obligations that are issued or guaranteed by U.S. government agencies. We invest only in high quality investment grade securities with a targeted portfolio duration generally between two and five and a half years. At ~~March 31,~~September 30, 2019, the average expected maturity of the portfolio was ~~5.52~~5.75 years with an effective duration of ~~4.37~~4.0 years and a nominal weighted-average yield of ~~2.75%~~2.63%. Management simulations indicate that the effective duration would increase to ~~4.59~~4.21 years with a 100 bp increase in the yield curve and increase to ~~4.75~~4.38 years with a 200 bp increase. At ~~December 31, 2018,~~June 30, 2019, the average expected maturity of the portfolio was ~~5.67~~5.41 years with an effective duration of ~~4.67~~4.18 years and a nominal weighted-average yield of 2.75%. The ~~change~~average maturity of the portfolio at September 30, 2018 was 5.61 years, with an effective duration was 4.90 years and the nominal weighted-average yield was 2.54%. The changes in expected maturity, effective duration, and nominal weighted-average yield iscompared to prior quarter and year-over-year were primarily related to ~~securities prepayments and maturities~~purchases during the ~~first~~third quarter of ~~2019.~~2019 in anticipation of the MidSouth acquisition. Year-over-year metrics were also impacted by the fourth quarter 2018 portfolio restructure.

Total loans at ~~March 31,~~September 30, 2019 were ~~$20.1~~$21.0 billion, up ~~$86.4~~$860.1 million, or ~~less than 1%~~4%, from ~~December 31, 2018,~~June 30, 2019, and up ~~$1.0~~$1.5 billion, or ~~5.3%~~8%, from ~~March 31,~~September 30, 2018. Growth ~~from December 31, 2018 was impacted by unanticipated paydowns, approximately $42 million~~compared to both the prior quarter and same quarter last year reflect the acquisition of

~~mortgage loan sales, and $17.9~~ $785 million in loans, net ~~charge-offs,~~ of ~~which $10.1 million was related to~~purchase discount, from MidSouth during the ~~DC Solar alleged fraud. Net~~third quarter of 2019. Additional net loan growth continues to be diversified across products and the ~~Company’s~~Bank’s footprint. Management ~~anticipates $75 million~~continues to ~~$125 million of period end~~anticipate the year-over-year average loan growth ~~during the second quarter of~~percentage for 2019 ~~with full year average percentage growth expected to~~will be in the mid-single digits.

The following table shows the composition of our loan portfolio at each date indicated:

	March 31,		December 31,		September 30,		June 30,		March 31,		September 30,		June 30		March 31,		December 31,		September 30,
(in thousands)	2019		2018		2018		2018		2018		2019		2019		2019		2018		2018
Total loans:
Commercial non-real estate	$	8,656,326	$	8,620,601	$	8,438,884	$	8,410,961	$	8,336,222	$	8,893,004	$	8,559,118	$	8,656,326	$	8,620,601	$	8,438,884
Commercial real estate - owner occupied		2,515,428		2,457,748		2,300,271		2,233,794		2,185,543		2,734,379		2,519,970		2,515,428		2,457,748		2,300,271
Total commercial and industrial		11,171,754		11,078,349		10,739,155		10,644,755		10,521,765		11,627,383		11,079,088		11,171,754		11,078,349		10,739,155
Commercial real estate - income producing		2,563,394		2,341,779		2,311,699		2,342,192		2,394,862		3,060,568		2,895,468		2,563,394		2,341,779		2,311,699
Construction and land development		1,340,067		1,548,335		1,523,419		1,515,233		1,413,878		1,190,718		1,144,062		1,340,067		1,548,335		1,523,419
Residential mortgages		2,933,251		2,910,081		2,846,916		2,780,359		2,732,821		3,004,958		2,968,271		2,933,251		2,910,081		2,846,916
Consumer		2,104,372		2,147,867		2,122,528		2,088,378		2,029,178		2,152,325		2,088,923		2,104,372		2,147,867		2,122,528
Total loans	$	20,112,838	$	20,026,411	$	19,543,717	$	19,370,917	$	19,092,504	$	21,035,952	$	20,175,812	$	20,112,838	$	20,026,411	$	19,543,717

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.

~~At March 31, 2019, commercial~~Commercial and industrial (“C&I”) loans, including both non-real estate and owner occupied real estate secured loans, totaled approximately ~~$11.2~~$11.6 billion, or ~~56%~~55% of the total loan portfolio at September 30, 2019, an increase of ~~$93~~$548.3 million, or 1%4.9%, from ~~December 31, 2018. The~~June 30, 2019. Approximately 70% of the linked-quarter increase is related to the MidSouth acquisition, with the remaining growth ~~was~~ across ~~the Company’s footprint~~most regions and ~~in many major lines including real estate, manufacturing, retail and transportation.~~specialty lines.

The Bank lends mainly to middle market and smaller commercial entities, although it participates in larger shared credit loan facilities. Shared national credits funded at ~~March 31,~~September 30, 2019 ~~totaling~~totaled approximately $2.1 billion, or 10% of total loans, ~~were up $96.6~~an increase of $14.7 million from ~~December 31, 2018.~~June 30, 2019. Approximately ~~$555.6~~$499.7 million of our shared national credits at September 30, 2019 were with energy-related ~~customers at March 31, 2019.~~customers.

Loans to borrowers in the energy sector totaled ~~$1.1~~$1.0 billion ~~relatively unchanged~~at September 30, 2019, up $26.2 million, or 3%, from ~~December 31, 2018~~June 30, 2019 and ~~March 31,~~$106.9 million, or 12%, compared to September 30, 2018. ~~We intend to maintain our total energy concentration at approximately 5% while continuing to shift the mix within the portfolio to approximately one-third~~The linked quarter increase in energy-related loans resulted from $82 million in MidSouth acquired loans that are largely in support services ~~subsector~~sector, partially offset by net payoffs and ~~two-thirds exploration and production and midstream subsectors.~~charge-offs. While our overall energy exposure increased during the third quarter of 2019 due to the MidSouth acquisition, the level remains below our target of 5%. At ~~March 31,~~

September 30, 2019, approximately ~~$580~~$494 million, or ~~55%~~48%, of the energy portfolio was comprised of customers engaged in exploration and production, transportation, and storage activities. The remaining ~~$483~~$540 million, or ~~45%~~52%, of the portfolio was comprised of customers engaged in onshore and offshore services and products to support exploration and production activities. We expect to continue to reduce our energy exposure through the next several quarters.

The following table ~~provide s~~provides detail of the more significant industry concentrations for our commercial and industrial loan portfolio, which is based on NAICS codes.

	March 31,					December 31,					September 30,					June 30,					March 31,					September 30,					June 30,					March 31,					December 31,					September 30,
	2019					2018					2018					2018					2018					2019					2019					2019					2018					2018
			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	$	1,430,878		13	%	$	1,349,674		12	%	$	1,232,737		11	%	$	1,195,278		11	%	$	1,154,304		11	%	$	1,426,334		12	%	$	1,303,770		12	%	$	1,406,207		12	%	$	1,326,146		12	%	$	1,232,737		11	%
Health Care and Social Assistance		1,083,469		10	%		1,120,799		10	%		1,135,040		11	%		1,152,593		11	%		1,159,214		11	%		1,084,884		9	%		1,040,352		9	%		1,083,469		10	%		1,120,799		10	%		1,135,040		11	%
Mining, Quarrying, and Oil and Gas Extraction (a)		957,590		8	%		1,016,870		9	%		874,223		8	%		932,113		9	%		972,580		9	%
Retail Trade (a)		932,857		8	%		902,783		8	%		930,134		9	%		901,020		8	%		869,662		8	%		1,060,765		9	%		1,024,031		9	%		970,599		9	%		937,971		8	%		934,281		9	%
Manufacturing (a)		913,363		8	%		866,079		8	%		846,447		8	%		820,135		8	%		795,014		8	%		1,034,030		9	%		946,700		9	%		922,365		8	%		877,950		8	%		852,643		8	%
Mining, Quarrying, and Oil and Gas Extraction (a)																											893,218		8	%		922,055		8	%		957,590		8	%		1,016,870		9	%		917,389		9	%
Transportation and Warehousing (a)																											775,869		7	%		745,403		7	%		746,837		7	%		717,746		7	%		700,698		6	%
Public Administration		799,237		7	%		814,442		7	%		842,199		8	%		866,052		8	%		857,736		8	%		765,492		7	%		778,622		7	%		799,237		7	%		814,442		7	%		842,199		8	%
Transportation and Warehousing (a)		746,837		7	%		717,746		7	%		700,698		6	%		702,615		7	%		651,869		6	%
Wholesale Trade (a)		657,685		6	%		602,052		6	%		559,638		5	%		523,839		5	%		536,791		5	%		699,993		6	%		657,215		6	%		657,685		6	%		602,052		5	%		559,638		5	%
Construction		645,107		6	%		643,932		6	%		582,761		5	%		632,592		6	%		626,013		6	%		638,384		6	%		619,204		6	%		645,107		6	%		643,932		6	%		582,761		5	%
Finance and Insurance		595,373		5	%		605,663		6	%		524,836		5	%		460,803		4	%		437,547		4	%		632,197		5	%		610,900		5	%		595,373		5	%		605,663		6	%		524,836		5	%
Professional, Scientific, and Technical Services (a)																											498,591		4	%		459,794		4	%		421,999		4	%		462,984		4	%		439,153		4	%
Other Services (except Public Administration)		450,153		4	%		436,390		4	%		391,040		4	%		382,737		4	%		371,913		4	%		477,625		4	%		452,958		4	%		450,153		4	%		436,390		4	%		391,040		4	%
Professional, Scientific, and Technical Services (a)		421,999		4	%		462,984		4	%		439,153		4	%		440,727		4	%		433,169		4	%
Accommodation and Food Services		410,754		4	%		383,087		3	%		331,604		3	%		366,240		3	%		357,693		3	%		451,150		4	%		415,814		4	%		413,732		4	%		385,958		4	%		416,734		4	%
Educational Services		353,803		3	%		359,997		3	%		430,238		4	%		437,484		4	%		440,272		4	%		353,366		3	%		351,697		3	%		353,803		3	%		359,997		3	%		430,238		4	%
Other (a)		772,649		7	%		795,851		7	%		918,407		9	%		830,527		8	%		857,988		9	%		835,485		7	%		750,573		7	%		747,598		7	%		769,449		7	%		779,768		7	%
Total commercial & industrial loans	$	11,171,754		100	%	$	11,078,349		100	%	$	10,739,155		100	%	$	10,644,755		100	%	$	10,521,765		100	%	$	11,627,383		100	%	$	11,079,088		100	%	$	11,171,754		100	%	$	11,078,349		100	%	$	10,739,155		100	%

Commercial real estate – income producing loans totaled approximately ~~$2.6~~$3.1 billion at ~~March 31,~~September 30, 2019, an increase of ~~$222~~$165.1 million, or 9%6%, from ~~December 31, 2018. The increase reflects~~June 30, 2019, largely due to the ~~transfer~~addition of ~~loans from construction to permanent financing, as well as new production that included increases for senior care facilities, multifamily properties and retail properties.~~MidSouth loans. The following table details for the preceding five quarters the end-of-period commercial real estate – income producing loan balances by property type.

	March 31,					December 31,					September 30,					June 30,					March 31,					September 30,					June 30,					March 31,					December 31,					September 30,
	2019					2018					2018					2018					2018					2019					2019					2019					2018					2018
			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 real estate - income producing loans:
Retail	$	542,904		21	%	$	507,129		22	%	$	499,395		22	%	$	502,809		22	%	$	521,607		22	%	$	637,707		21	%	$	607,622		21	%	$	542,904		21	%	$	507,129		22	%	$	499,395		22	%
Office		436,819		17	%		444,973		19	%		421,965		18	%		430,319		18	%		436,789		18	%		532,191		17	%		465,498		16	%		436,819		17	%		444,973		19	%		421,965		18	%
Hotel/Motel		377,674		15	%		374,430		16	%		346,735		15	%		332,411		14	%		336,724		14	%
Multifamily		369,041		14	%		332,145		14	%		333,144		15	%		347,732		15	%		379,932		16	%		466,545		15	%		519,808		18	%		369,041		14	%		332,145		14	%		333,144		15	%
Industrial		353,804		14	%		311,933		13	%		285,292		12	%		279,041		12	%		270,812		11	%		409,828		13	%		406,926		14	%		353,804		14	%		311,933		13	%		285,292		12	%
Hotel/Motel																											325,003		11	%		379,385		13	%		377,674		15	%		374,430		16	%		346,735		15	%
Other		483,152		19	%		371,169		16	%		425,168		18	%		449,880		19	%		448,998		19	%		689,294		23	%		516,229		18	%		483,152		19	%		371,169		16	%		425,168		18	%
Total commercial real estate - income producing loans	$	2,563,394		100	%	$	2,341,779		100	%	$	2,311,699		100	%	$	2,342,192		100	%	$	2,394,862		100	%	$	3,060,568		100	%	$	2,895,468		100	%	$	2,563,394		100	%	$	2,341,779		100	%	$	2,311,699		100	%

Construction and land development loans, totaling approximately ~~$1.3~~$1.2 billion at ~~March 31,~~September 30, 2019, ~~decreased $208.3~~increased $46.7 million, or 4%, from ~~December 31, 2018. The decrease was primarily due to the reclassification of loans from construction and land development loans to commercial real estate loans as noted above.~~June 30, 2019. Residential mortgages increased ~~$23.2~~$36.7 million and consumer loans ~~decreased $43.5~~increased $63.4 million during the ~~first~~third quarter of 2019. These increases were also primarily as a result of the MidSouth acquisition.

The Company's total allowance for loan losses was ~~$194.7~~$195.6 million at ~~March 31,~~September 30, 2019 virtually unchanged from ~~December 31, 2018~~June 30, 2019 and down ~~$16.0~~$19.0 million compared to ~~March 31,~~September 30, 2018. The ratio of the allowance for loan losses to period-end loans ~~of 0.97%~~was 0.93% at ~~March 31, 2019 was unchanged from December 31, 2018. The allowance for loan losses at March 31,~~September 30, 2019 compared to 0.97% at both June 30, 2019 and December 31, 2018 ~~reflects a net build in~~with the ~~commercial nonenergy~~decline resulting from the addition of MidSouth loans with no allowance as that portfolio is largely covered by the $41 million acquisition discount. Excluding the impact of $3.0 million, partially offset by a net release of $1.7 million in the energy portfolio. The consumer and residential mortgage allowances had releases of $0.9 million and $0.2 million, respectively.MidSouth, coverage to total loans would have been flat. The relatively flat allowance (excluding the impact of MidSouth) reflects mixed credit metrics with higher commercial criticized and nonaccrual loans, largely attributable to a few shared national credit downgrades, partially offset by problem credit resolutions, payoffs, restructure to performing loans and other upgrades. The energy allowance totaled $32.0 million, or 3.1% of energy loans at September 30, 2019, up $0.5 million, or 1% from June 30, 2019. The slight increase in energy allowance reflects the ~~favorable impact of improvement in criticized levels and other credit metrics across most~~replenishment of the ~~loan portfolios, offset by slightly elevated loss coverage ratios~~$9.9 million of current quarter net charge-offs due to increasing concerns over borrower specific liquidity issues in the commercial portfolio as we continue to grow and diversify that portfolio. Energy performance continues to be stable with increasing oil prices and a continued decline in criticized levels compared to prior quarter.upstream subsector.

The Company’s balance of criticized commercial loans totaled ~~$584~~$659.4 million at ~~March 31,~~September 30, 2019, ~~down $41~~up $86.6 million, or 7%15%, compared to ~~December 31,~~June 30, 2019, with $47.9 million of the increase attributable to MidSouth loans which are covered by the purchased discount. The increase in commercial criticized loans includes $63.4 million attributable to the commercial nonenergy portfolio ($43.1 million from MidSouth) and $23.1 million attributable to the energy portfolio ($4.5 million from MidSouth). Compared to September 30, 2018, criticized commercial loans were down $174.4 million, or 21%, with ~~$26~~$98.5 million attributable to the commercial nonenergy portfolio and $76.0 million of the decrease attributable to the ~~commercial nonenergy portfolio and $15 million attributable to the~~ energy portfolio. Commercial criticized loans are down $500 million, or 46%, compared to first quarter of 2018, with $259 million of the decrease attributable to the energy portfolio and $241 million attributable to the commercial nonenergy portfolio. Criticized loans are defined as those having potential weaknesses that deserve management’s close attention (risk-rated as special mention, substandard and doubtful), including both accruing and nonaccruing loans. Our commercial nonenergy criticized portfolio, totaling ~~$320~~$378.4 million at ~~March 31,~~September 30, 2019, is comprised of loans that are diversified as to both industry and geography. Commercial nonenergy criticized loans comprised ~~2.12%~~2.55% of that portfolio at ~~March 31,~~September 30, 2019, compared to ~~2.31%~~2.23% at ~~December 31, 2018~~June 30, 2019 and ~~3.91%~~3.49% at ~~March 31,~~September 30, 2018. ~~As of March 31,~~At September 30, 2019, criticized loans in the energy portfolio were ~~$264~~$281.0 million, or approximately ~~25%~~27% of that ~~portfolio.~~

~~Management continues~~portfolio, up slightly compared to closely monitor the ability of our energy-related customers to service their debt, including reviews of customers’ balance sheets, leverage ratios, collateral values and other critical lending metrics. We believe we are adequately reserved for losses on remaining credits, and do not expect a significant provision for any additional issues. The Company has recorded approximately $95 million in energy charge-offs during the latest26% at June 30, 2019, but down ~~cycle that began in late 2014.~~

Net ~~charge- offs~~charge-offs were ~~$17.9~~$12.5 million, or ~~0.36%~~0.25%, of average total loans on an annualized basis in the ~~first~~third quarter of 2019, ~~down~~up from ~~$28.1~~$7.2 million, or ~~0.56%~~0.14%, of average total loans in the ~~fourth~~second quarter of ~~2018.~~2019. Commercial net charge-offs totaled ~~$14.4~~$8.3 million in the ~~first~~third quarter of 2019, up compared to ~~$24.3~~$4.3 million in the ~~fourth~~second quarter of ~~2018.~~2019. The ~~first~~increase in third quarter of 2019 charge-offs is largely due to net charge-offs ~~included $10.1~~of $9.8 million ~~related to~~in energy portfolio, primarily in the ~~alleged fraud associated with the DC Solar equipment finance credit.~~upstream subsector, partially offset by nonenergy commercial net recoveries. There were no ~~energy net charge-offs during the first quarter of 2019 compared to $15.8 million of~~energy-related net charge-offs in the ~~fourth~~second quarter of 2019 or the third quarter of 2018. Residential mortgage net charge-offs at $0.1 million were relatively flat to linked-quarter and were up from a net recovery of $1.1 million in the third quarter of 2018. Consumer ~~loan~~ net charge-offs ~~of $3.2 million~~ were ~~down $1.0~~up $1.2 million compared to the ~~fourth~~prior quarter, ~~of 2018 and~~but were down ~~$3.0~~$0.6 million when compared to the same quarter last year.

We have completed our first ~~quarter 2018.~~round of parallel testing of the calculation of our Current Expected Credit Loss (CECL) or life of loan loss allowance that replaces the current incurred loss allowance method effective January 1, 2020. Preliminary results using September 30, 2019 information indicates a net increase of approximately 20 to 30% over our incurred loan loss reserve level utilizing the CECL models and current economic forecast; this range excludes the impact of the loans and debt securities recently acquired from MidSouth. Significant drivers in the aforementioned increase were higher calculated reserve levels forlonger life real-estate secured loans and the expected funding of off-balance sheet exposures, partially offset by releases in reserves for shorter-term commercial loans. The ~~first quarter~~amount of ~~2018 included $1.5 million~~actual increase in allowance for credit losses upon adoption will be impacted by the portfolio composition and quality, as well as current economic conditions and forecasts at that time. Refer to Note 16 – Recent Accounting Pronouncements for additional discussion on status of ~~net charge-offs related to the consumer finance subsidiary that was sold on March 9, 2018.~~implementation activities and our CECL estimation process.

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

	Three Months Ended									Three Months Ended									Nine Months Ended
	March 31,			December 31,			March 31,			September 30,			June 30,			September 30,			September 30,
(in thousands)	2019			2018			2018			2019			2019			2018			2019			2018
Allowance for loan losses at beginning of period	$	194,514		$	214,550		$	217,308		$	195,625		$	194,688		$	214,530		$	194,514		$	217,308
Loans charged-off:
Commercial non real estate		16,344			24,668			9,335			11,729			5,309			3,556			33,382			15,401
Commercial real estate - owner-occupied		—			729			851			66			71			526			137			7,330
Total commercial & industrial		16,344			25,397			10,186			11,795			5,380			4,082			33,519			22,731
Commercial real estate - income producing		10			-			—			—			—			29			10			1,633
Construction and land development		—			69			10			7			—			45			7			265
Total commercial		16,354			25,466			10,196			11,802			5,380			4,156			33,536			24,629
Residential mortgages		406			29			192			221			33			87			660			585
Consumer		4,231			5,314			8,048			5,002			3,936			5,635			13,169			18,599
Total charge-offs		20,991			30,809			18,436			17,025			9,349			9,878			47,365			43,813
Commercial non real estate		1,926			1,151			4,146			2,932			804			758			5,662			13,234
Commercial real estate - owner-occupied		17			35			88			63			204			7			284			282
Total commercial & industrial		1,943			1,186			4,234			2,995			1,008			765			5,946			13,516
Commercial real estate - income producing		2			-			63			516			—			156			518			221
Construction and land development		11			28			29			11			86			30			108			68
Total commercial		1,956			1,214			4,326			3,522			1,094			951			6,572			13,805
Residential mortgages		162			325			116			167			104			1,142			433			1,854
Consumer		1,004			1,134			1,794			862			1,000			933			2,866			4,028
Total recoveries		3,122			2,673			6,236			4,551			2,198			3,026			9,871			19,687
Total net charge-offs		17,869			28,136			12,200			12,474			7,151			6,852			37,494			24,126
Provision for loan losses		18,043			8,100			12,253			12,421			8,088			6,872			38,552			28,016
Decrease in allowance as a result of sale of subsidiary		—			—			(6,648	)		—			—			—			—			(6,648	)
Allowance for loan losses at end of period	$	194,688		$	194,514		$	210,713		$	195,572		$	195,625		$	214,550		$	195,572		$	214,550
Ratios:
Gross charge-offs to average loans		0.42	%		0.62	%		0.39	%		0.33	%		0.19	%		0.20	%		0.31	%		0.30	%
Recoveries to average loans		0.06	%		0.05	%		0.13	%		0.09	%		0.04	%		0.06	%		0.07	%		0.14	%
Net charge-offs to average loans		0.36	%		0.56	%		0.26	%		0.25	%		0.14	%		0.14	%		0.25	%		0.17	%
Allowance for loan losses to period-end loans		0.97	%		0.97	%		1.10	%		0.93	%		0.97	%		1.10	%		0.93	%		1.10	%

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

	March 31,			December 31,			September 30,			December 31,
(in thousands)	2019			2018			2019			2018
Loans accounted for on a nonaccrual basis: (a)
Commercial non-real estate	$	22,933		$	26,617		$	52,131		$	26,617
Commercial non-real estate - restructured		104,060			84,036			98,574			84,036
Total commercial non-real estate		126,993			110,653			150,705			110,653
Commercial real estate - owner occupied		14,104			16,682			12,790			16,682
Commercial real estate - owner-occupied - restructured		362			213			295			213
Total commercial real estate - owner-occupied		14,466			16,895			13,085			16,895
Commercial real estate - income producing		4,205			4,991			2,848			4,991
Commercial real estate - income producing - restructured		—			—			109			—
Total commercial real estate - income producing		4,205			4,991			2,957			4,991
Construction and land development		2,002			2,134			1,184			2,134
Construction and land development - restructured		11			12			153			12
Total construction and land development		2,013			2,146			1,337			2,146
Residential mortgage		37,849			34,594			36,122			34,594
Residential mortgage - restructured		1,426			1,272			1,778			1,272
Total residential mortgage		39,275			35,866			37,900			35,866
Consumer		17,879			16,744			16,661			16,744
Consumer - restructured		—			—			215			—
Total consumer		17,879			16,744			16,876			16,744
Total nonaccrual loans	$	204,831		$	187,295		$	222,860		$	187,295
Restructured loans - still accruing:
Commercial non-real estate	$	109,872		$	130,075		$	58,837		$	130,075
Commercial real estate - owner occupied		5,928			7,286			—			7,286
Commercial real estate - income producing		391			398			379			398
Construction and land development		9			9			112			9
Residential mortgage		341			546			480			546
Consumer		1,037			728			1,089			728
Total restructured loans - still accruing		117,578			139,042			60,897			139,042
Total nonperforming loans		322,409			326,337			283,757			326,337
ORE and foreclosed assets		27,148			26,270			30,955			26,270
Total nonperforming assets (b)	$	349,557		$	352,607		$	314,712		$	352,607
Loans 90 days past due still accruing to loans (c)	$	20,308		$	5,589		$	7,872		$	5,589
Total restructured loans	$	223,437		$	224,575		$	162,021		$	224,575
Ratios:
Nonperforming assets to loans plus ORE and foreclosed assets		1.74	%		1.76	%		1.49	%		1.76	%
Allowance for loan losses to nonperforming loans and accruing loans 90 days past due		56.81	%		58.60	%		67.06	%		58.60	%
Loans 90 days past due still accruing to loans ~~(c)~~		0.10	%		0.03	%		0.04	%		0.03	%

Nonperforming assets totaled ~~$349.6~~$314.7 million at ~~March 31,~~September 30, 2019, down ~~$3.1~~$23.9 million from June 30, 2019, $37.9 million from December 31, 2018 and ~~$118.8~~$76.6 million from ~~March 31,~~September 30, 2018. Nonperforming loans decreased approximately ~~$3.9~~$27.3 million compared to ~~December 31, 2018 with~~June 30, 2019, due largely to a ~~continued~~ reduction in restructured accruing loans as a result of one of our energy ~~nonperforming loans of $15 million,~~credits returning to a conforming market structure, as well as other activity including both net paydowns and charge-offs, partially offset by ~~an increase in commercial nonenergy nonperforming loans of $11 million.~~new downgrades. Our nonperforming loans included ~~$117.8~~$60.9 million of accruing restructured loans, ~~or approximately one-third~~most of ~~total nonperforming loans, most within~~which are energy credits that endured challenges during the downturn in the energy cycle. Nonperforming assets as a percent of total loans, ORE and other foreclosed assets was ~~1.74%~~1.49% at ~~March 31,~~September 30, 2019, down 219 bps from June 30, 2019, 27 bps from December 31, 2018 and 7151 bps from ~~March 31,~~September 30, 2018.

Short-term liquidity investments, including interest-bearing bank deposits and federal funds sold, were ~~$163.8~~$49.5 million at ~~March 31,~~September 30, 2019. This represents ~~an increase~~a decrease of ~~$52.7~~$101.5 million from ~~December 31, 2018~~June 30, 2019 and ~~an increase of $102.2~~$58.6 million from ~~March 31,~~September 30, 2018. These ~~assets are volatile~~asset levels vary on a daily basis depending upon movement in customer loan and deposit accounts. Average short-term investments of ~~$216.2~~$180.5 million for the ~~first~~third quarter of 2019 were ~~up $10.4~~down $48.1 million compared to the ~~fourth~~second quarter of ~~2018,~~2019, and up ~~$67.9~~$25.1 million compared to the ~~first~~third quarter of 2018. Short-term liquidity assets are held to ensure funds are available to meet the cash flow needs of both borrowers and depositors.

Total deposits were ~~$23.4~~$24.2 billion at ~~March 31,~~September 30, 2019, up ~~$230.1 million, or 1%, from December 31, 2018, and up $894.6~~$965.3 million, or 4%, from ~~March 31, 2018.~~June 30, 2019, and $1.8 billion, or 8%, from September 30, 2018, which included the impact of approximately $1.3 billion of deposits assumed from the MidSouth acquisition. MidSouth deposits improved our overall deposit mix and facilitated the paydown of $223 million in brokered certificates of deposit. Average deposits for the ~~first~~third quarter of 2019 were $23.1 billion, ~~up $616.0~~down $46.2 million, or 3%less than 1%, from the ~~fourth~~second quarter of ~~2018~~2019 and up $1.1 billion, or 5%, from the ~~first~~third quarter of 2018.

Noninterest-bearing demand deposits were ~~$8.2~~$8.7 billion at ~~March 31,~~September 30, 2019, ~~down $340.4~~up $571.8 million, or 4%7%, ~~compared to December 31, 2018,~~from June 30, 2019, and ~~down $71.4~~$545.9 million, or 1%7%, ~~compared to March 31,~~from September 30, 2018. The linked-quarter increase reflects the $389 million of noninterest-bearing demand deposits assumed in the MidSouth acquisition. Noninterest-bearing demand deposits comprised ~~35%~~36% of total deposits at ~~March 31,~~September 30, 2019, 35% at June 30, 2019 and ~~37%~~36% at ~~December 31, 2018 and March 31,~~September 30, 2018.

Interest-bearing transaction and savings accounts of ~~$8.2~~$8.8 billion at ~~March 31,~~September 30, 2019 increased ~~$224~~$724.2 million, or 3%9%, ~~compared to December 31, 2018~~from June 30, 2019 and ~~increased $165.4~~$786.6 million, or 2%10%, ~~compared to March 31,~~from September 30, 2018, with the linked-quarter and year-over-year increase mainly attributable to ~~customer~~ deposits ~~assumed in~~from the ~~trust and asset management~~MidSouth acquisition.

Interest-bearing public fund deposits totaled ~~$3.2~~$3.0 billion at ~~March 31,~~September 30, 2019, ~~up $223.1~~down $204.8 million, or 7%6%, from ~~December 31, 2018, primarily due to both new and enhanced business relationships,~~June 30, 2019, and up ~~$121.6~~$341.1 million, or 4%13%, ~~compared~~from September 30, 2018. The decrease in public fund deposits is related to ~~March 31, 2018.~~typical seasonality and is expected to increase in fourth quarter of 2019. Time deposits other than public funds totaled ~~$3.7~~$3.8 billion at ~~March 31,~~September 30, 2019, ~~up $123.3~~down $125.9 million, or 3%, from ~~December 31, 2018,~~June 30, 2019, driven primarily by ~~promotional certificate of deposit offers across our markets and~~ a ~~$21.2~~$222 million ~~increase~~decrease in brokered certificates of ~~deposit.~~deposit, partially offset by an increase in retail certificates of deposits, largely from the MidSouth acquisition. Time deposits other than public funds were up ~~$679.0~~$110.0 million, or ~~22.0%~~3%, ~~compared~~from September 30, 2018, largely due to ~~March 31, 2018, due largely~~ an increase in retail certificates of deposit, primarily from the MidSouth acquisition, offset by a decrease in brokered certificates of deposit. The level of time deposits was impacted by $446 million of maturities during the third quarter of 2019 compared to $715 million in second quarter of 2019 and $239 million during the third quarter of 2018.

At ~~March 31,~~September 30, 2019, short-term borrowings totaled ~~$1.4~~$2.1 billion, ~~down $200.4~~up $467.2 million, or 28%, from ~~December 31, 2018, as~~June 30, 2019, with increases in FHLB borrowings ~~decreased $250.1~~of $427.5 million and federal funds purchased of $124.9 million partially offset by an $85.1 million decrease in securities sold under repurchase ~~agreements increased $49.7 million.~~agreements. The increase in FHLB borrowings was due largely to preparations for the MidSouth acquisition in anticipation of near-term balance sheet changes. Short-term borrowings decreased ~~$63.4 million from March 31, 2018.~~

~~Average short-term borrowings of $1.7 billion in the first quarter of 2019 were down $645.4~~$167.8 million, or ~~28%~~7%, ~~compared to the fourth quarter of 2018, and down $138.1 million, or 8%, compared to the first quarter of~~from September 30, 2018. The decrease compared to ~~prior periods~~third quarter of 2018 was due in part to a portfolio restructure late in the fourth quarter where proceeds from the sale of loans and securities were used to pay down a portion of FHLB ~~borrowings.~~borrowings, partially offset by increases in securities sold under repurchase agreements.

Average short-term borrowings of $2.1 billion in the third quarter of 2019 were up $445.6 million, or 28%, compared to the second quarter of 2019, and down $546.8 million, or 21%, compared to the third quarter of 2018.

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, amounts available will vary. 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.

payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset over the lease term, as well as the disclosure of key information about operating leasing arrangements. Upon adoption, the Company recorded a gross-up of assets and liabilities in its consolidated balance sheet, with approximately $116 million for right-of-use assets and $131 million of lease payment obligations offset by the elimination of $15 million of existing lease incentive and other deferred rent liabilities. Accounting for leases in accordance with Topic 842 has not had a material impact upon our consolidated results of operations, and is not expected to in future periods. Refer to Note 5 – Operating Leases for further information related to the operating lease accounting policy, practical expedient elections for adoption and operating leasing information at adoption.

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~~its 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 and Bank must include unfunded commitments meeting certain criteria in risk-weighted capital calculations.

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

The following table shows the commitments to extend credit and letters of credit at ~~March 31,~~September 30, 2019 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	$	7,198,032	$	3,275,846	$	1,543,306	$	1,456,399	$	922,481	$	7,478,907	$	3,352,245	$	1,549,939	$	1,622,515	$	954,208
Letters of credit		336,419		250,652		35,805		49,962		—		389,998		303,681		41,756		44,561		—
Total	$	7,534,451	$	3,526,498	$	1,579,111	$	1,506,361	$	922,481	$	7,868,905	$	3,655,926	$	1,591,695	$	1,667,076	$	954,208

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, 2018.

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. Estimates are based 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.

Refer to Note 16 to our Consolidated Financial Statements included elsewhere in this report.

Item 3. Quantitative and ~~Qualitative~~Qualitative Disclosures About Market Risk

The Company’s 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 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 following table presents an analysis of our interest rate risk as measured by the estimated changes in net interest income resulting from an instantaneous and sustained parallel shift in rates at ~~March 31,~~September 30, 2019. Shifts are measured in 100 basis point increments in a range from -500 to +500 basis points from base case, with ~~-200~~-100 through +300 basis points presented in the table below. Our interest rate sensitivity modeling incorporates a number of assumptions including loan and deposit repricing characteristics, the rate of loan prepayments and other factors. The base scenario assumes that the current interest rate environment is held constant over a 24-month forecast period and is the scenario to which all others are compared in order to measure the change in net interest income. Policy limits on the change in net interest income under a variety of interest rate scenarios are approved by the ~~Board.~~Board of Directors. All policy scenarios assume a static volume forecast where the balance sheet is held constant, although other scenarios are modeled.

	Estimated Increase						Estimated Increase
	(Decrease) in NII						(Decrease) in NII
Change in Interest Rates	Year 1			Year 2			Year 1			Year 2
(basis points)
-200		(9.96	)%		(13.82	)%
-100		(4.27	)%		(5.69	)%		(4.30	)%		(6.84	)%
+100		3.10	%		3.92	%		1.94	%		3.69	%
+200		5.77	%		7.13	%		4.43	%		7.77	%
+300		8.12	%		9.80	%		6.76	%		11.55	%

The results indicate a general asset sensitivity across most scenarios driven primarily by repricing in variable rate loans and a funding mix which is composed of material volumes of non-interest bearing and lower rate sensitive deposits. When deemed prudent, management has taken actions to mitigate exposure to interest rate risk with on- or off-balance sheet financial instruments and intends to do so in the future. Possible actions include, but are not limited to, changes in the pricing of loan and deposit products, modifying the composition of earning assets and interest-bearing liabilities, and adding to, modifying or terminating existing interest rate swap agreements or other financial instruments used for interest rate risk management ~~purposes~~.purposes.

Even if interest rates change in the designated amounts, there can be no assurance that our assets and liabilities would perform as anticipated. Additionally, a change in the U.S. Treasury rates in the designated amounts accompanied by a change in the shape of the U.S. Treasury yield curve would cause significantly different changes to net interest income than indicated above. Strategic management of our balance sheet and earnings is fluid and would be adjusted to accommodate these movements. As with any method of measuring interest rate risk, certain shortcomings are inherent in the methods of analysis presented above. For example, although certain assets and liabilities may have similar maturities or periods to repricing, they may react in different degrees to changes in market interest rates. Also, the interest rates on certain types of assets and liabilities may fluctuate in advance of changes in market interest rates, while interest rates on other types may lag behind changes in market rates. Certain assets such as adjustable-rate loans have features which restrict changes in interest rates on a short-term basis and over the life of the asset. Also, the ability of many borrowers to service their debt may decrease in the event of an interest rate increase. We consider all of these factors in monitoring exposure to interest rate risk.

In July 2017, the United Kingdom Financial Conduct Authority (the authority that regulates LIBOR) announced it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. At September 30, 2019, approximately 30% of our loan portfolio consisted of variable rate loans tied to LIBOR, along with related derivatives and other financial instruments. During the third quarter of 2019, we began transition activities by modifying new and renewed loan and derivative documents to include the following terms: (1) ability for the Bank to use its discretion to determine when to name a replacement index; (2) ability for the Bank to name the replacement index; (3) ability for the Bank to adjust credit spread to the replacement index for the loan; and (4) ability for the Bank to make these changes by notifying the customer and without requiring a modification of the document. Our LIBOR transition team is continuing to monitor developments and is taking steps to ensure readiness should the LIBOR benchmark rate be discontinued.

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 included in our Annual Report on Form 10-K for the year ended December 31, 2018.

In connection with the preparation of this Quarterly Report on Form 10-Q, an evaluation was carried out by the Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of ~~March 31,~~September 30, 2019, 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 period ended ~~March 31,~~September 30, 2019, 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.

The Company disclosed risk factors in its Annual Report on Form 10-K for the year ended December 31, 2018. 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.

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.

Mississippi		64-0693170
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

HancockWhitneyPlaza, 2510 14^thStreet, Gulfport, Mississippi		39501
(Address of principal executive offices)		(Zip Code)


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common stock, par value $3.33 per share	HWC	Nasdaq


Part I. Financial Information		Page Number
ITEM 1.	Financial Statements	4
	Consolidated Balance Sheets (unaudited) – ~~March 31,~~September 30, 2019 and December 31, 2018	4
	Consolidated Statements of Income (unaudited) – Three and Nine Months Ended ~~March 31,~~September 30, 2019 and 2018	5
	Consolidated Statements of Comprehensive Income (unaudited) – Three and Nine Months Ended ~~March 31,~~September 30, 2019 and 2018	6
	Consolidated Statements of Changes in Stockholders’ Equity (unaudited) – Three and Nine Months Ended ~~March 31,~~September 30, 2019 and 2018	7
	Consolidated Statements of Cash Flows (unaudited) – ~~Three~~Nine Months Ended ~~March 31,~~September 30, 2019 and 2018	8
	Notes to Consolidated Financial Statements (unaudited) – ~~March 31,~~September 30, 2019 and 2018	9
ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	3539
ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	5762
ITEM 4.	Controls and Procedures	5763
Part II. Other Information
ITEM 1.	Legal Proceedings	5964
ITEM 1A.	Risk Factors	5964
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5964
ITEM 3.	Default on Senior Securities	N/A
ITEM 4.	Mine Safety Disclosures	N/A
ITEM 5.	Other Information	N/A
ITEM 6.	Exhibits	5964
Signatures		6065

(in thousands)
ASSETS
Cash and due from banks	$	28,060
Interest bearing bank deposits		318,914
Federal funds sold		3,475
Securities available for sale		272,406
Loans		785,204
Property and equipment		30,164
Other real estate		435
Identifiable intangible assets		35,000
Other assets		56,860
Total identifiable assets		1,530,518
LIABILITIES
Deposit liabilities		1,281,078
Short term borrowings		66,996

(in thousands)
ASSETS
Accounts receivable	$	2,803
Identifiable intangible assets		27,562
Total identifiable assets		30,365
LIABILITIES
Deposit liabilities		217,432
Other liabilities		151
Total liabilities		217,583
Net liabilities assumed		(187,218	)
Consideration received		140,657
Goodwill	$	46,561

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

Long term debt		13,919
Other liabilities		43,883
Total liabilities		1,405,876
Net assets acquired		124,642
Value of stock-based consideration		193,849
Goodwill	$	69,207

(in thousands)
Liability balance at December 31, 2017	$	—
Entry into derivative contract		7,304
Liability balance at December 31, 2018		7,304
Cash settlement		(414	)
Losses included in earnings		63
Liability balance at March 31, 2019	$	6,953

(in thousands)
Balance at December 31, 2017	$	—
Entry into derivative contract		7,304
Balance at December 31, 2018		7,304
Cash settlements		(1,262	)
Losses included in earnings		207
Balance at September 30, 2019	$	6,249

	Well-			September 30,			June 30,			March 31,			December 31,			September 30,
	Capitalized			2019			2019			2019			2018			2018
Total capital (to risk weighted assets)
Hancock Whitney Corporation		10.00	%		12.43	%		12.43	%		12.24	%		11.99	%		11.98	%
Hancock Whitney Bank		10.00	%		11.19	%		11.81	%		11.73	%		11.17	%		11.25	%
Tier 1 common equity capital (to risk weighted assets)
Hancock Whitney Corporation		6.50	%		11.02	%		10.94	%		10.74	%		10.48	%		10.36	%
Hancock Whitney Bank		6.50	%		10.39	%		10.97	%		10.88	%		10.32	%		10.30	%
Tier 1 capital (to risk weighted assets)
Hancock Whitney Corporation		8.00	%		11.02	%		10.94	%		10.74	%		10.48	%		10.36	%
Hancock Whitney Bank		8.00	%		10.39	%		10.97	%		10.88	%		10.32	%		10.30	%
Tier 1 leverage capital
Hancock Whitney Corporation		5.00	%		9.49	%		9.10	%		8.85	%		8.67	%		8.50	%
Hancock Whitney Bank		5.00	%		8.95	%		9.12	%		8.97	%		8.54	%		8.46	%

Exhibit Number	Description	Filed Herewith	Form	Exhibit	Filing Date
3.1	Composite Articles of the Company		8-K	3.1	5/24/2018
3.2	Amended and Restated Bylaws		8-K	3.2	5/24/2018
31.1	Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	X
31.2	Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	X
32.1	Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	X
32.2	Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	X
101	XBRL Interactive Data	X

Hancock Whitney Corporation

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

		/s/ Michael M. Achary
		Michael M. Achary
		Senior Executive Vice President & Chief Financial Officer (Principal Financial Officer)


		/s/ Stephen E. Barker
		Stephen E. Barker
		Executive Vice President, ~~& Chief~~Senior Accounting ~~Officer~~ ~~(Principal~~and Finance Executive (Principal Accounting Officer)

		~~May 7,~~November 8, 2019