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.

~~86,352,402~~86,412,669 common shares were outstanding at ~~July~~October 31, 2020.

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

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

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

CECL – Current Expected Credit Losses, the term commonly used to refer to the methodology of estimating credit losses required by ASC 326, “Financial Instruments – Credit Losses.” ASC 326 was adopted by the Company on January 1, 2020, superseding the methodology prescribed by ASC 310.

Coronavirus – the novel coronavirus declared a pandemic during the first quarter of 2020, resulting in profound market disruptions

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

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

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

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

~~credit structure. 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 acquired on September 21, 2019

PPP – Paycheck Protection Program, a loan program administered by the Small Business Administration designed to provide a direct incentive for small businesses to keep workers on payroll during interruptions caused by the COVID-19 pandemic

Reference rate reform – refers to the global transition away from LIBOR and other interbank offered rates toward new reference rates that are more reliable and robust

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

	June 30,			December 31,			September 30,			December 31,
(in thousands, except per share data)	2020			2019			2020			2019
ASSETS
Cash and due from banks	$	535,234		$	432,104		$	484,315		$	432,104
Interest-bearing bank deposits		759,747			109,961			778,363			109,961
Federal funds sold		447			268			694			268
Securities available for sale, at fair value (amortized cost of $4,698,304 and $4,637,610)		4,932,142			4,675,304
Securities held to maturity (fair value of $1,553,593 and $1,611,004)		1,449,661			1,568,009
Securities available for sale, at fair value (amortized cost of $5,410,502 and $4,637,610)								5,647,315			4,675,304
Securities held to maturity (fair value of $1,517,688 and $1,611,004)								1,408,961			1,568,009
Loans held for sale		364,416			55,864			103,566			55,864
Loans		22,628,377			21,212,755			22,240,204			21,212,755
Less: allowance for loan losses		(442,638	)		(191,251	)		(448,674	)		(191,251	)
Loans, net		22,185,739			21,021,504			21,791,530			21,021,504
Property and equipment, net of accumulated depreciation of $259,784 and $249,527		380,119			380,209
Right of use assets, net of accumulated amortization of $17,649 and $12,194		115,130			110,023
Property and equipment, net of accumulated depreciation of $266,241 and $249,527								384,329			380,209
Right of use assets, net of accumulated amortization of $20,309 and $12,194								114,420			110,023
Prepaid expenses		43,634			40,178			40,003			40,178
Other real estate and foreclosed assets, net		18,724			30,405			11,640			30,405
Accrued interest receivable		122,605			92,037			112,686			92,037
Goodwill		855,453			855,453			855,453			855,453
Other intangible assets, net		96,293			106,807			91,505			106,807
Life insurance contracts		609,759			608,063			611,713			608,063
Funded pension assets, net		186,915			185,791			191,946			185,791
Other assets		559,382			328,777			564,885			328,777
Total assets	$	33,215,400		$	30,600,757		$	33,193,324		$	30,600,757
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits
Noninterest-bearing	$	11,759,085		$	8,775,632		$	11,881,548		$	8,775,632
Interest-bearing		15,563,183			15,027,943			15,149,111			15,027,943
Total deposits		27,322,268			23,803,575			27,030,659			23,803,575
Short-term borrowings		1,754,875			2,714,872			1,906,895			2,714,872
Long-term debt		386,269			233,462			385,887			233,462
Accrued interest payable		10,512			10,200			7,336			10,200
Lease liabilities		133,403			127,703			134,007			127,703
Deferred tax liability, net		27,095			37,721			46,665			37,721
Other liabilities		264,821			205,539			306,231			205,539
Total liabilities		29,899,243			27,133,072			29,817,680			27,133,072
Stockholders' equity:
Common stock		309,513			309,513			309,513			309,513
Capital surplus		1,747,640			1,736,664			1,755,315			1,736,664
Retained earnings		1,156,278			1,476,232			1,211,878			1,476,232
Accumulated other comprehensive income (loss), net		102,726			(54,724	)		98,938			(54,724	)
Total stockholders' equity		3,316,157			3,467,685			3,375,644			3,467,685
Total liabilities and stockholders' equity	$	33,215,400		$	30,600,757		$	33,193,324		$	30,600,757
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		92,947			92,947			92,947			92,947
Common shares outstanding		86,342			87,515			86,400			87,515

	Three Months Ended					Six Months Ended						Three Months Ended					Nine Months Ended
	June 30,					June 30,						September 30,					September 30,
(in thousands, except per share data)	2020			2019		2020			2019			2020			2019		2020			2019
Interest income:
Loans, including fees	$	228,917		$	243,233	$	467,640		$	481,515		$	220,392		$	243,875	$	688,032		$	725,390
Loans held for sale		650			344		1,271			597			833			592		2,104			1,189
Securities-taxable		31,702			30,244		64,309			61,383			30,863			32,724		95,172			94,107
Securities-tax exempt		4,854			5,211		9,798			10,657			4,831			5,058		14,629			15,715
Short-term investments		219			1,346		667			2,509			124			915		791			3,424
Total interest income		266,342			280,378		543,685			556,661			257,043			283,164		800,728			839,825
Interest expense:
Deposits		22,629			49,843		61,566			95,981			14,783			49,220		76,349			145,201
Short-term borrowings		2,253			7,847		6,715			15,929			1,673			7,729		8,388			23,658
Long-term debt		3,594			2,820		6,350			5,629			5,404			3,276		11,754			8,905
Total interest expense		28,476			60,510		74,631			117,539			21,860			60,225		96,491			177,764
Net interest income		237,866			219,868		469,054			439,122			235,183			222,939		704,237			662,061
Provision for credit losses		306,898			8,088		553,691			26,131			24,999			12,421		578,690			38,552
Net interest income (loss) after provision for credit losses		(69,032	)		211,780		(84,637	)		412,991			210,184			210,518		125,547			623,509
Noninterest income:
Service charges on deposit accounts		15,518			20,723		38,355			41,090			18,440			21,892		56,795			62,982
Trust fees		14,160			15,904		28,966			31,028			14,424			15,098		43,390			46,126
Bank card and ATM fees		15,957			16,619		33,319			31,909			17,222			17,154		50,541			49,063
Investment and annuity fees and insurance commissions		5,366			6,591		12,516			13,119			5,988			7,048		18,504			20,167
Secondary mortgage market operations		9,808			4,433		15,861			8,159			12,875			5,713		28,736			13,872
Other income		13,134			14,980		29,313			24,448			14,799			16,325		44,112			40,773
Total noninterest income		73,943			79,250		158,330			149,753			83,748			83,230		242,078			232,983
Noninterest expense:
Compensation expense		98,756			87,747		189,827			171,715			97,095			93,858		286,922			265,573
Employee benefits		21,653			18,888		44,131			38,618			20,761			18,622		64,892			57,240
Personnel expense		120,409			106,635		233,958			210,333			117,856			112,480		351,814			322,813
Net occupancy expense		13,559			12,961		26,081			24,945			13,191			13,156		39,272			38,101
Equipment expense		4,752			4,342		9,369			9,021			5,355			4,685		14,724			13,706
Data processing expense		21,250			20,088		43,297			39,419			21,888			21,532		65,185			60,951
Professional services expense		10,985			9,665		20,726			17,833			14,372			17,704		35,098			35,537
Amortization of intangible assets		5,169			5,047		10,514			10,185			4,788			4,889		15,302			15,074
Deposit insurance and regulatory fees		5,116			4,755		10,931			10,161			4,108			3,995		15,039			14,156
Other real estate and foreclosed asset (income) expense		(460	)		395		9,670			(596	)		(482	)		2,055		9,188			1,459
Other expense		15,759			19,679		35,328			37,966			14,698			33,058		50,026			71,024
Total noninterest expense		196,539			183,567		399,874			359,267			195,774			213,554		595,648			572,821
Income (loss) before income taxes		(191,628	)		107,463		(326,181	)		203,477			98,158			80,194		(228,023	)		283,671
Income taxes expense (benefit)		(74,556	)		19,186		(98,076	)		36,036			18,802			12,387		(79,274	)		48,423
Net income (loss)	$	(117,072	)	$	88,277	$	(228,105	)	$	167,441		$	79,356		$	67,807	$	(148,749	)	$	235,248
Earnings (loss) per common share-basic	$	(1.36	)	$	1.01	$	(2.64	)	$	1.92		$	0.90		$	0.77	$	(1.73	)	$	2.69
Earnings (loss) per common share-diluted	$	(1.36	)	$	1.01	$	(2.64	)	$	1.92		$	0.90		$	0.77	$	(1.73	)	$	2.69
Dividends paid per share	$	0.27		$	0.27	$	0.54		$	0.54		$	0.27		$	0.27	$	0.81		$	0.81
Weighted average shares outstanding-basic		86,301			85,728		86,744			85,708			86,358			86,377		86,614			85,934
Weighted average shares outstanding-diluted		86,301			85,835		86,744			85,810			86,400			86,462		86,614			86,010

	Three Months Ended					Six Months Ended					Three Months Ended						Nine Months Ended
	June 30,					June 30,					September 30,						September 30,
(in thousands)	2020			2019		2020			2019		2020			2019			2020			2019
Net income (loss)	$	(117,072	)	$	88,277	$	(228,105	)	$	167,441	$	79,356		$	67,807		$	(148,749	)	$	235,248
Other comprehensive income before income taxes:
Other comprehensive income (loss) before income taxes:
Net change in unrealized gain or loss on securities available for sale and cash flow hedges		51,532			69,225		216,829			126,468		425			34,159			217,254			160,627
Reclassification of net gain or loss realized and included in earnings		(2,885	)		3,984		(2,517	)		8,203		(4,076	)		3,280			(6,593	)		11,483
Valuation adjustments to employee benefit plan		(10,251	)		—		(10,251	)		—
Valuation adjustment to employee benefit plan												—			(7,015	)		(10,251	)		(7,015	)
Amortization of unrealized net loss or gain on securities transferred to held to maturity		(94	)		890		(289	)		1,481		(89	)		954			(378	)		2,435
Other comprehensive income before income taxes		38,302			74,099		203,772			136,152
Other comprehensive income (loss) before income taxes												(3,740	)		31,378			200,032			167,530
Income tax expense		8,842			16,793		46,322			30,646		48			7,331			46,370			37,977
Other comprehensive income net of income taxes		29,460			57,306		157,450			105,506
Comprehensive income (loss)	$	(87,612	)	$	145,583	$	(70,655	)	$	272,947
Other comprehensive income (loss) net of income taxes												(3,788	)		24,047			153,662			129,553
Comprehensive income											$	75,568		$	91,854		$	4,913		$	364,801

Three Months Ended June 30, 2020 and 2019											Accumulated
Three Months Ended September 30, 2020 and 2019																											Accumulated
	Common Stock										Other						Common Stock										Other
(in thousands, except per share data)	Shares Issued		Amount		Capital Surplus			Retained Earnings			Comprehensive Income (Loss), Net			Total			Shares Issued		Amount		Capital Surplus			Retained Earnings			Comprehensive Income (Loss), Net			Total
Balance, March 31, 2020		92,947	$	309,513	$	1,741,156		$	1,297,129		$	73,266		$	3,421,064
Net loss		—		—		—			(117,072	)		—			(117,072	)
Other comprehensive income		—		—		—			—			29,460			29,460
Comprehensive loss		—		—		—			(117,072	)		29,460			(87,612	)
Balance, June 30, 2020																		92,947	$	309,513	$	1,747,640		$	1,156,278		$	102,726		$	3,316,157
Net income																		—		—		—			79,356			—			79,356
Other comprehensive loss																		—		—		—			—			(3,788	)		(3,788	)
Comprehensive income																		—		—		—			79,356			(3,788	)		75,568
Cash dividends declared ($0.27 per common share)		—		—		—			(23,789	)		—			(23,789	)		—		—		—			(23,803	)		—			(23,803	)
Common stock activity, long-term incentive plan		—		—		5,450			10			—			5,460
Common stock activity, long-term incentive plans																		—		—		6,595			47			—			6,642
Issuance of stock from dividend reinvestment and stock purchase plans		—		—		1,034			—			—			1,034			—		—		1,080			—			—			1,080
Balance, June 30, 2020		92,947	$	309,513	$	1,747,640		$	1,156,278		$	102,726		$	3,316,157
Balance, March 31, 2019		87,903	$	292,716	$	1,731,148		$	1,299,220		$	(132,509	)	$	3,190,575
Balance, September 30, 2020																		92,947	$	309,513	$	1,755,315		$	1,211,878		$	98,938		$	3,375,644

Balance, June 30, 2019																		87,903	$	292,716	$	1,737,492		$	1,363,910		$	(75,203	)	$	3,318,915
Net income		—		—		—			88,277			—			88,277			—		—		—			67,807			—			67,807
Other comprehensive income		—		—		—			—			57,306			57,306			—		—		—			—			24,047			24,047
Comprehensive income		—		—		—			88,277			57,306			145,583			—		—		—			67,807			24,047			91,854
Cash dividends declared ($0.27 per common share)		—		—		—			(23,593	)		—			(23,593	)		—		—		—			(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		—		—		5,420			6			—			5,426			—		—		4,407			63			—			4,470
Issuance of stock from dividend reinvestment and stock purchase plans		—		—		924			—			—			924			—		—		889			—			—			889
Balance, June 30, 2019		87,903	$	292,716	$	1,737,492		$	1,363,910		$	(75,203	)	$	3,318,915
Six Months Ended June 30, 2020 and 2019											Accumulated
Balance, September 30, 2019																		92,947	$	309,513	$	1,919,840		$	1,408,183		$	(51,156	)	$	3,586,380

Nine Months Ended September 30, 2020 and 2019																											Accumulated
	Common Stock										Other						Common Stock										Other
(in thousands, except per share data)	Shares Issued		Amount		Capital Surplus			Retained Earnings			Comprehensive Income (Loss), Net			Total			Shares Issued		Amount		Capital Surplus			Retained Earnings			Comprehensive Income (Loss), Net			Total
Balance, December 31, 2019		92,947	$	309,513	$	1,736,664		$	1,476,232		$	(54,724	)	$	3,467,685			92,947	$	309,513	$	1,736,664		$	1,476,232		$	(54,724	)	$	3,467,685
Net loss		—		—		—			(228,105	)		—			(228,105	)		—		—		—			(148,749	)		—			(148,749	)
Other comprehensive income		—		—		—			—			157,450			157,450			—		—		—			—			153,662			153,662
Comprehensive loss		—		—		—			(228,105	)		157,450			(70,655	)
Comprehensive income																		—		—		—			(148,749	)		153,662			4,913
Cumulative effect of change in accounting principle		—		—		—			(44,087	)		—			(44,087	)		—		—		—			(44,087	)		—			(44,087	)
Cash dividends declared ($0.54 per common share)		—		—		—			(47,817	)		—			(47,817	)
Common stock activity, long-term incentive plan		—		—		9,564			55			—			9,619
Cash dividends declared ($0.81 per common share)																		—		—		—			(71,620	)		—			(71,620	)
Common stock activity, long-term incentive plans																		—		—		16,159			102			—			16,261
Net settlement of accelerated share repurchase agreement (1,001,472 shares)		—		—		12,110			—			—			12,110			—		—		12,110			—			—			12,110
Repurchase of common stock		—		—		(12,716	)		—			—			(12,716	)		—		—		(12,716	)		—			—			(12,716	)
Issuance of stock from dividend reinvestment and stock purchase plans		—		—		2,018			—			—			2,018			—		—		3,098			—			—			3,098
Balance, June 30, 2020		92,947	$	309,513	$	1,747,640		$	1,156,278		$	102,726		$	3,316,157
Balance, September 30, 2020																		92,947	$	309,513	$	1,755,315		$	1,211,878		$	98,938		$	3,375,644

Balance, December 31, 2018		87,903	$	292,716	$	1,725,741		$	1,243,592		$	(180,709	)	$	3,081,340			87,903	$	292,716	$	1,725,741		$	1,243,592		$	(180,709	)	$	3,081,340
Net income		—		—		—			167,441			—			167,441			—		—		—			235,248			—			235,248
Other comprehensive income		—		—		—			—			105,506			105,506			—		—		—			—			129,553			129,553
Comprehensive income		—		—		—			167,441			105,506			272,947			—		—		—			235,248			129,553			364,801
Cash dividends declared ($0.54 per common share)		—		—		—			(47,174	)		—			(47,174	)
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		—		—		9,948			51			—			9,999			—		—		14,355			114			—			14,469
Issuance of stock from dividend reinvestment and stock purchase plans		—		—		1,803			—			—			1,803			—		—		2,692			—			—			2,692
Balance, June 30, 2019		87,903	$	292,716	$	1,737,492		$	1,363,910		$	(75,203	)	$	3,318,915
Balance, September 30, 2019																		92,947	$	309,513	$	1,919,840		$	1,408,183		$	(51,156	)	$	3,586,380

	Six Months Ended						Nine Months Ended
	June 30,						September 30,
(in thousands)	2020			2019			2020			2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	(228,105	)	$	167,441		$	(148,749	)	$	235,248
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		15,420			15,169			22,869			22,867
Provision for credit losses		553,691			26,131			578,690			38,552
(Gain) loss on other real estate and foreclosed assets		9,790			(1,093	)
Loss on other real estate and foreclosed assets								9,252			852
Gain on sale of securities		(112	)		—			(488	)		—
Deferred tax expense (benefit)		(48,786	)		24,573			(28,949	)		30,136
Increase in cash surrender value of life insurance contracts		(4,235	)		(6,896	)		(14,443	)		(10,792	)
(Gain) Loss on disposal of other assets		19			(81	)
Net (increase) decrease in loans held for sale		(53,176	)		(7,998	)
(Gain) loss on disposal of other assets								(556	)		70
Net increase in loans held for sale								(46,691	)		(46,727	)
Net amortization of securities premium/discount		19,208			14,628			30,576			23,133
Amortization of intangible assets		10,514			10,185			15,302			15,074
Stock-based compensation expense		11,086			10,368			16,661			15,497
Net change in liability from variation margin collateral		(113,616	)		(18,918	)		(102,501	)		(42,500	)
Contribution to pension plan		—			(100,000	)		—			(100,000	)
Decrease in interest payable and other liabilities		(4,493	)		(1,907	)
Increase (decrease) in interest payable and other liabilities								11,369			(1,632	)
Increase in other assets		(86,813	)		(183	)		(97,265	)		(10,631	)
Other, net		(13,512	)		(2,613	)		(17,607	)		(2,854	)
Net cash provided by operating activities		66,880			128,806			227,470			166,293
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from the sale of available for sale securities		124,122			—			211,919			143,334
Proceeds from maturities of securities available for sale		385,125			125,154			662,269			204,391
Purchases of securities available for sale		(582,655	)		(133,992	)		(1,667,476	)		(810,198	)
Proceeds from maturities of securities held to maturity		124,037			191,553			169,863			297,150
Purchases of securities held to maturity		(12,359	)		(154,498	)		(20,884	)		(183,626	)
Net increase in short-term investments		(649,965	)		(39,968	)
Net (increase) decrease in short-term investments								(668,828	)		383,970
Proceeds from sales of loans and leases		22,221			100,751			301,609			111,141
Net increase in loans		(2,029,351	)		(278,834	)		(1,657,939	)		(353,971	)
Purchase of life insurance contracts		—			(32,788	)		—			(32,788	)
Purchases of property and equipment		(19,607	)		(22,718	)		(31,214	)		(33,746	)
Proceeds from sale of property and equipment		—			202
Proceeds from sales of other real estate		7,678			6,134			15,299			20,764
Cash acquired in stock-based business combination								—			28,060
Final cash settlement for acquisition of business		—			(1,112	)		—			(1,112	)
Other, net		(10,361	)		(10,887	)		(4,412	)		(19,815	)
Net cash used in investing activities		(2,641,115	)		(251,003	)		(2,689,794	)		(246,446	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits		3,518,693			85,857
Net increase (decrease) in deposits								3,227,084			(229,964	)
Net increase (decrease) in short-term borrowings		(959,997	)		52,470			(807,977	)		452,691
Proceeds from the issuance of long-term debt, net of issuance costs		166,812			11,649			166,425			11,649
Repayments of long-term debt		(153	)		(151	)		(230	)		(226	)
Dividends paid		(47,817	)		(47,174	)		(71,620	)		(70,771	)
Payroll tax remitted on net share settlement of equity awards		(1,585	)		(845	)		(1,639	)		(1,594	)
Proceeds from exercise of stock options		—			368			—			367
Proceeds from dividend reinvestment and stock purchase plans		2,018			1,803			3,098			2,692
Settlement of forward contract portion of accelerated share repurchase		12,110			—			12,110			—
Repurchase of shares		(12,716	)		—			(12,716	)		—
Net cash provided by financing activities		2,677,365			103,977			2,514,535			164,844
NET INCREASE (DECREASE) IN CASH AND DUE FROM BANKS		103,130			(18,220	)
NET INCREASE IN CASH AND DUE FROM BANKS								52,211			84,691
CASH AND DUE FROM BANKS, BEGINNING		432,104			383,372			432,104			383,372
CASH AND DUE FROM BANKS, ENDING	$	535,234		$	365,152		$	484,315		$	468,063
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	$	5,459		$	6,070			5,459			14,170

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, 2019. 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.

On January 1, 2020, the Company adopted Accounting Standards Codification (“ASC”) 326, “Financial Instruments – Credit Losses,” more commonly referred to as CECL, on a modified retrospective basis. The provisions of this guidance require a material change to the manner in which the Company estimates and reports losses on financial instruments, including loans and unfunded lending commitments, select securities and other assets carried at amortized cost. Results for reporting periods beginning after January 1, 2020 are presented under ASC 326, while prior period amounts continue to be reported in accordance with previously applicable GAAP. Changes to the Company’s accounting policies related to CECL are described below. Further, the Company performed an interim test of goodwill impairment using a quantitative assessment, as described below. There were no other 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, 2019. Refer to Note 16 – Recent Accounting Pronouncements for a discussion of accounting standards adopted during the ~~six~~nine months ended ~~June~~September 30, 2020 and the impact to the Company’s financial statements.

Allowance for Credit Losses on Loans, Leases Held for Investment and Unfunded Exposures

For reporting periods beginning on or after January 1, 2020, the Allowance for Credit Losses (ACL) is comprised of the Allowance for Loan and Lease Losses (ALLL), a valuation account available to absorb losses on loans and leases held for investment, and the Reserve for Unfunded Lending Commitments, a liability established to absorb credit losses for the expected life of the contractual term of on and off-balance sheet exposures as of the date of the determination. Quarterly, management estimates losses in the portfolio and unfunded exposures based on a number of factors, including the Company’s past loan loss experience, known and potential risks in the portfolio, adverse situations that may affect the borrowers’ ability to repay, the estimated value of any underlying collateral, and current and forecasted economic conditions.

The analysis and methodology for estimating the ACL includes two primary elements: a collective approach for pools of loans that have similar risk characteristics using a loss rate analysis, and a specific reserve analysis for credits individually evaluated for credit loss. For the collective approach, the Company segments loans into commercial non-real estate, commercial real estate – owner occupied, commercial real estate – income producing, construction and land development, residential mortgage and consumer, with further segmentation by region and sub-portfolio, as deemed appropriate. Both quantitative and qualitative factors are applied at the portfolio segment levels. The Company applies the practical expedient that permits the exclusion of the accrued interest receivable balance from amortized cost basis of financing receivables.

For the collectively evaluated portfolios, the Company utilizes internally developed credit models and third party economic forecasts for the calculation of expected credit loss over the reasonable and supportable forecast period for the majority of the portfolio and other methods, generally historical loss based, for select portfolios. The Company calculates collective allowance for a two-year reasonable and supportable forecast period utilizing probability weighted multiple macroeconomic scenarios, and then reverts on a linear basis over four quarters to an average historical loss rate for the remaining ~~life.~~term. The credit models consist primarily of multivariate regression and autoregressive models that correlate our historical net charge-off rates to select macroeconomic variables at a collective level. Forward-looking macroeconomic forecasts are applied as inputs to the regression equations to estimate quarterly collective net charge-off rates over the reasonable and supportable period. The net charge-off rates from the credit models for the reasonable and supportable period, the linear reversion rates, and the average loss rates for the post reasonable and supportable periods are applied to forecasted balance runoff for the estimated remaining term. The balance runoff incorporates prepayment assumptions developed from historical experience that are applied to the multiple macroeconomic forecasts. Forecasted net charge-off rates are also applied to forecasted draws and subsequent runoff of unfunded commitments in the calculation of the reserve for unfunded lending commitments. Qualitative adjustments to the output of quantitative calculations are made when management deems it necessary to reflect differences in current and forecasted conditions as compared to those during the historical loss period used in model development. Conditions to be considered include, but are not limited to, problem loan trends, current business and economic conditions, credit concentrations, lending policies and procedures, lending staff, collateral values, loan profiles and volumes, loan review quality, changes in competition and regulations, and other adjustments for model limitations or other variables not specifically captured.

The Company establishes specific reserves using an individually evaluated approach for nonaccrual loans, loans modified in troubled debt restructures, loans for which a troubled debt restructure is reasonably expected, and other financial instruments that are deemed to not share risk characteristics with other collectively evaluated financial assets. For loans individually evaluated, a specific allowance is recognized for any shortfall between the loan’s value and its recorded investment. The loan’s value is measured by either the loan’s observable market price, the fair value of the collateral of the loan (less liquidation costs) if it is collateral dependent, or by the present value of expected future cash flows discounted at the loan’s effective interest rate. The Company applies the practical expedient and defines collateral dependent loans as those where the borrower is experiencing financial difficulty and on which repayment is expected to be provided substantially through the operation or sale of the collateral. Loans individually analyzed are not incorporated into the pool analysis to avoid double counting. The Company limits the individually evaluated specific reserve analysis to include commercial and residential mortgage loans with relationship balances of $1 million or greater and all loans classified as troubled debt restructurings.

Acquired loans and other financial assets within the scope of CECL are segregated between those purchased with credit deterioration (“PCD”) and those that are not (“non PCD”). Assets considered PCD include those individual financial assets (or groups of financial assets with similar risk characteristics) that as of the date of acquisition are assessed as having experienced a more-than-insignificant deterioration in credit quality since origination. The assessment of what is more-than-insignificant credit deterioration since origination considers information including, but not limited to, financial assets that are delinquent, on nonaccrual and/or otherwise adversely risk rated as of the acquisition date, those that have been downgraded since origination, and those for which, after origination, credit spreads have widened beyond the threshold specified in policy. The Company bifurcates the fair value discount between the credit and noncredit components and records an allowance for credit losses for PCD assets by adding the credit portion of the fair value discount to the initial amortized cost basis and increasing the allowance for credit losses at the date of acquisition. Any noncredit discount or premium resulting from acquiring assets with credit deterioration is allocated to each individual asset. All non PCD financial assets acquired are recorded at the estimated fair value of the asset at acquisition, with the estimated allowance for credit loss recorded as a provision for credit losses through earnings in the period in which the acquisition has occurred. The noncredit discount or premium for PCD assets and full discount for non PCD assets will be accreted to interest income using the interest method based on the effective interest rate at the acquisition date.

Under the transition provisions for application of CECL, the Company has classified all purchased credit impaired loans (“PCI”) previously accounted for under Financial Accounting Standard Subtopic 310-30 to be classified as PCD, without reassessing whether the financial assets meet the criteria of PCD as of the date of adoption. The application of these provisions resulted in an adjustment to the amortized cost basis of the financial asset to reflect the addition of the allowance for credit losses at the date of adoption. The Company elected not to maintain pools of loans accounted for under Subtopic 310-30 at adoption. The Company was also not required to reassess whether modifications to individual acquired financial assets accounted for in pools were troubled debt restructurings as of the date of adoption. The noncredit discount, after the adjustment for the allowance for credit losses, will be accreted to interest income using the interest method based on the effective interest rate determined after the adjustment for credit losses at the adoption date.

The CECL standard also requires an assessment of the Company’s held to maturity debt securities for expected credit losses and the available for sale debt securities for credit-related impairment. The Company applies the practical expedient to exclude the accrued interest receivable balance from amortized cost basis of financing receivables. The allowance for credit losses on held to maturity debt securities is estimated at the individual security level when there is a more than inconsequential risk of default. The assessment uses probability of default and loss given default models based on public ratings, where available, or mapped internally developed risk grades to public ratings and forecasted cash flows using the same economic forecasts and probability weighting as used for the Company’s evaluation of the loan portfolio. Qualitative adjustments to the output of the quantitative calculation are made when management deems it necessary to reflect differences in current and forecasted conditions as compared to those during the historical loss period used in model development. The Company evaluates credit impairment on available for sale debt securities at an individual security level. This evaluation is done for securities whose fair value is below amortized cost with a more than inconsequential risk of default and where the Company has assessed the decline in fair value is significant enough to suggest a credit event occurred. Credit events are generally assessed based on adverse conditions specifically related to the security, an industry, or geographic area, changes in the financial condition of the issuer of the security, or in the case of an asset-backed debt security, changes in the financial condition of the underlying loan obligors. The allowance for credit losses for such securities is measured using a discounted cash flow methodology, through which management compares the present value of expected cash flows with the amortized cost basis of the security. The allowance for credit loss is limited to the amount by which the fair value is less than the amortized cost basis.

The Company reassesses the potential for credit losses at each reporting period and records subsequent changes in the allowance for credit losses on securities with a corresponding adjustment recorded in the provision for credit loss expense. If the Company intends to sell the debt security, or more likely than not will be required to sell the security before recovery of its amortized cost basis, the security is charged down to fair value against the allowance for credit losses, with any incremental impairment reported in earnings.

Goodwill, which represents the excess of cost over the fair value of the net assets of an acquired business, is not amortized but is assessed for impairment on an annual basis, or more often if events or circumstances indicate that it is more likely than not that a goodwill impairment exists. The impairment test compares the estimated fair value of a reporting unit with its net book value. If the unit’s fair value is less than its carrying value, an impairment is recognized.

The Company completed its annual impairment test of goodwill as of September 30, 2019 by performing a qualitative (“Step Zero”) assessment. The qualitative assessment involved the examination of changes in macroeconomic conditions, industry and market conditions, overall financial performance, cost factors and other relevant entity-specific events, including changes in management and other key personnel and changes in the share price of the Company’s common stock. As a result of the assessment, the Company concluded that its goodwill was not impaired.

During the ~~second~~third quarter of 2020, the Company assessed the indicators of goodwill impairment and noted certain events that indicated thatit ~~was more~~is “more likely than ~~not~~not” that ~~there was potential for~~a goodwill impairment exists, necessitating an interim test of impairment. Triggering events stemming from and in response to the COVID-19 pandemic include continued economic disruption, operating losses driven by a higher provision for credit losses and a lower interest rate environment, and a sustained decrease in the Company’s share price. As such, the Company performed a quantitative assessment of goodwill impairment as of ~~June~~September 30, 2020, which included determining the estimated fair value of the reporting unit and comparing that fair value to the reporting unit's carrying amount. The results of the test indicated that the estimated fair value of the reporting unit exceeded its carrying amount at ~~June~~September 30, 2020; therefore, goodwill was 0t impaired as of the testing date.

The Company used multiple approaches to measure its fair value at ~~June~~September 30, 2020. The primary approaches included an income approach using the discounted net present value of estimated future cash flows and a market approach using transaction or price-to-forward earnings multiples methodology using the actual price paid in recent acquisition transactions for similar entities, discounted for the current recessionary ~~environment.~~environment, neither of which resulted in impairment. The results from each of the primary approaches ~~showed~~were weighted equally, with the valuation of the reporting unit approximately 14% in excess of net book value at ~~June~~September 30, 2020, with the income approach resulting in a fair market value approximately 6% higher than net book value and the market approach resulting in a fair market value approximately 17% higher than net book value. Other supplementary valuation methodologies were performed to benchmark results, none of which resulted in impairment2020.

~~Each of the~~Both valuation techniques employed by the Company ~~requires~~require significant assumptions. Depending upon the specific approach, assumptions are made regarding the economic environment, expected net interest margins, growth rates, discount ~~rates for~~rate used to present value future cash flows, asset quality metrics, control premiums, and price-to-forward earnings multiples. Changes to any one of these assumptions could result in significantly different results. ~~A significant decline~~Changes in the amount and/or timing of the Company’s expected future cash flows or estimated growth rates, lack of improvement and/or ~~a prolonged~~further decline in the price of the Company’s common stock ~~due~~relative to our book value per share, and/or further deterioration in the economic environment ~~may necessitate additional interim testing, which~~beyond current estimates could result in an impairment charge to goodwill in future reporting periods.

Annual impairment testing will be performed in the fourth quarter of 2020 in coordination with our annual strategic planning process, and interim testing is expected to continue until indicators of goodwill impairment no longer exist.

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 $130.5 million and recorded goodwill of $63.4 million. In consideration for the net assets acquired, the Company issued approximately 5.0 million shares of our common stock, 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 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.

Goodwill represents the excess of the consideration transferred over the fair value of the net assets acquired. 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 following table presents the change in the Company’s goodwill during the year ended December 31, 2019. NaN measurement period adjustments were recorded during the ~~six~~nine months ended ~~June~~September 30, 2020.

(in thousands)
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
Initial goodwill recorded in the acquisition of MidSouth Bancorp, Inc.		69,207			69,207
Measurement period adjustments - acquisition of MidSouth Bancorp, Inc.		(5,838	)		(5,838	)
Goodwill balance at December 31, 2019	$	855,453		$	855,453
Goodwill balance at June 30, 2020	$	855,453
Goodwill balance at September 30, 2020				$	855,453

The following tables set forth the amortized cost, gross unrealized gains and losses, and estimated fair value of debt securities classified as available for sale and held to maturity at ~~June~~September 30, 2020 and December 31, 2019. Amortized cost of securities does not include accrued interest which is reflected in the accrued interest line item on the ~~Consolidated Balance Sheets~~consolidated balance sheets totaling ~~$23.5~~$23.2 million and $23.9 million at ~~June~~September 30, 2020 and December 31, 2019, respectively.

	June 30, 2020								December 31, 2019								September 30, 2020								December 31, 2019
			Gross		Gross				Gross		Gross								Gross		Gross				Gross		Gross
Securities Available for Sale	Amortized		Unrealized		Unrealized		Fair		Amortized		Unrealized		Unrealized		Fair		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	$	142,265	$	6,351	$	—	$	148,616	$	98,320	$	652	$	300	$	98,672	$	192,077	$	6,664	$	125	$	198,616	$	98,320	$	652	$	300	$	98,672
Municipal obligations		239,922		14,764		—		254,686		242,016		7,789		—		249,805		297,712		16,291		347		313,656		242,016		7,789		—		249,805
Residential mortgage-backed securities		2,007,247		70,089		13		2,077,323		1,910,909		20,268		7,020		1,924,157		2,536,999		70,222		531		2,606,690		1,910,909		20,268		7,020		1,924,157
Commercial mortgage-backed securities		1,726,091		132,398		—		1,858,489		1,570,765		19,880		4,178		1,586,467		1,965,664		136,056		720		2,101,000		1,570,765		19,880		4,178		1,586,467
Collateralized mortgage obligations		574,779		10,158		115		584,822		807,600		3,757		3,142		808,215		410,050		9,141		21		419,170		807,600		3,757		3,142		808,215
Corporate debt securities		8,000		225		19		8,206		8,000		21		33		7,988		8,000		185		2		8,183		8,000		21		33		7,988
	$	4,698,304	$	233,985	$	147	$	4,932,142	$	4,637,610	$	52,367	$	14,673	$	4,675,304	$	5,410,502	$	238,559	$	1,746	$	5,647,315	$	4,637,610	$	52,367	$	14,673	$	4,675,304

	June 30, 2020								December 31, 2019								September 30, 2020								December 31, 2019
			Gross		Gross				Gross		Gross								Gross		Gross				Gross		Gross
Securities Held to Maturity	Amortized		Unrealized		Unrealized		Fair		Amortized		Unrealized		Unrealized		Fair		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	$	3	$	—	$	50,003	$	—	$	—	$	—	$	—	$	50,000	$	3	$	—	$	50,003
Municipal obligations		624,717		43,718		16		668,419		641,019		27,146		69		668,096		630,894		49,348		17		680,225		641,019		27,146		69		668,096
Residential mortgage-backed securities		26,138		1,412		—		27,550		29,687		883		—		30,570		24,041		1,641		—		25,682		29,687		883		—		30,570
Commercial mortgage-backed securities		550,715		53,136		—		603,851		539,371		12,474		581		551,264		550,201		53,253		—		603,454		539,371		12,474		581		551,264
Collateralized mortgage obligations		248,091		5,682		—		253,773		307,932		3,597		458		311,071		203,825		4,502		—		208,327		307,932		3,597		458		311,071
	$	1,449,661	$	103,948	$	16	$	1,553,593	$	1,568,009	$	44,103	$	1,108	$	1,611,004	$	1,408,961	$	108,744	$	17	$	1,517,688	$	1,568,009	$	44,103	$	1,108	$	1,611,004

The following tables present the amortized cost and estimated fair value of debt securities available for sale and held to maturity at ~~June~~September 30, 2020 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	$	16,304	$	16,436	$	14,492	$	14,540
Due after one year through five years		179,035		191,064		239,148		258,655
Due after five years through ten years		1,874,212		2,006,374		2,066,697		2,196,332
Due after ten years		2,628,753		2,718,268		3,090,165		3,177,788
Total available for sale debt securities	$	4,698,304	$	4,932,142	$	5,410,502	$	5,647,315

Debt Securities Held to Maturity	Amortized		Fair		Amortized		Fair
(in thousands)	Cost		Value		Cost		Value
Due in one year or less	$	2,199	$	2,191	$	2,196	$	2,191
Due after one year through five years		189,341		201,759		189,141		201,869
Due after five years through ten years		622,579		683,858		636,976		701,345
Due after ten years		635,542		665,785		580,648		612,283
Total held to maturity securities	$	1,449,661	$	1,553,593	$	1,408,961	$	1,517,688

The Company held 0 securities classified as trading at ~~June~~September 30, 2020 and December 31, 2019.

~~During~~The following table presents the ~~six months ended June 30, 2020,~~ proceeds from, ~~the sales of securities totaled $124.1 million, with~~ gross ~~gains of $1.1 million~~gain on, and gross losses ~~of $1.0 million. There were 0~~on sales of securities during the ~~six~~nine months ended ~~June~~September 30, 2020 and 2019.

~~Securities with carrying values totaling $3.3 billion at both June 30, 2020 and December 31, 2019 were pledged as collateral,~~13

Securities with carrying values totaling $3.2 billion and $3.3 billion were pledged as collateral at September 30, 2020 and December 31, 2019 respectively, primarily to secure public deposits or securities sold under agreements to repurchase.

The Company’s policy is to invest only in securities of investment grade quality. These investments are largely limited to U.S. agency securities and municipal securities. Management has concluded, based on the long history of no credit losses, that the expectation of nonpayment of the held to maturity securities carried at amortized cost is zero for securities that are backed by the full faith and credit of and/or guaranteed by the U.S. government. As such,0 allowance for credit losses has been recorded for these securities. The municipal portfolio is analyzed separately for allowance for credit loss in accordance with the applicable guidance for each portfolio as noted below.

Effective January 1, 2020, in conjunction with the adoption of CECL, and again at ~~June~~September 30, 2020, the Company evaluated credit impairment for individual securities available for sale whose fair value was below amortized cost with a more than inconsequential risk of default and where the Company had assessed the decline in fair value significant enough to suggest a credit event occurred. There were 0 securities that met the criteria of a credit loss event and therefore, 0 allowance for credit loss was recorded for either period. The fair value and gross unrealized losses for securities classified as available for sale with unrealized losses for the periods indicated follow.

Available for Sale
June 30, 2020	Losses < 12 months				Losses 12 months or >				Total
September 30, 2020													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	$	—	$	—	$	—	$	—	$	—	$	—	$	44,039	$	125	$	—	$	—	$	44,039	$	125
Municipal obligations		—		—		—		—		—		—		26,010		347		—		—		26,010		347
Residential mortgage-backed securities		2,096		10		542		3		2,638		13		229,662		529		367		2		230,029		531
Commercial mortgage-backed securities		—		—		—		—		—		—		252,858		720		—		—		252,858		720
Collateralized mortgage obligations		47,153		115		—		—		47,153		115		3,300		21		—		—		3,300		21
Corporate debt securities		781		19		—		—		781		19		3,498		2		—		—		3,498		2
	$	50,030	$	144	$	542	$	3	$	50,572	$	147	$	559,367	$	1,744	$	367	$	2	$	559,734	$	1,746

Effective January 1, 2020 and in conjunction with the adoption of CECL, and again as of ~~June~~September 30, 2020, the Company evaluated its held to maturity municipal obligation portfolio for credit loss using probability of default and loss given default models. The models were run using a long-term average probability of default migration and with a probability weighting of Moody’s economic forecasts. The economic forecasts were largely weighted to a baseline scenario with some weight given to other scenarios. The ~~June~~September 30, 2020 forecast was further stressed by running a more severe probability of default migration. The resulting credit loss was negligible for both periods and no allowance for credit loss was recorded. The fair value and gross unrealized losses for securities classified as held to maturity with unrealized losses for the periods indicated follow.

Held to maturity
June 30, 2020	Losses < 12 months				Losses 12 months or >				Total
Held to Maturity
September 30, 2020													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	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Municipal obligations		—		—		2,893		16		2,893		16		523		2		2,890		15		3,413		17
Residential mortgage-backed securities		—		—		—		—		—		—		—		—		—		—		—		—
Commercial mortgage-backed securities		—		—		—		—		—		—		222		—		—		—		222		—
Collateralized mortgage obligations		—		—		—		—		—		—		—		—		—		—		—		—
	$	—	$	—	$	2,893	$	16	$	2,893	$	16	$	745	$	2	$	2,890	$	15	$	3,635	$	17

Held to maturity
Held to Maturity
December 31, 2019	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	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Municipal obligations		4,735		38		3,143		31		7,878		69		4,735		38		3,143		31		7,878		69
Residential mortgage-backed securities		—		—		—		—		—		—		—		—		—		—		—		—
Commercial mortgage-backed securities		28,426		581		—		—		28,426		581		28,426		581		—		—		28,426		581
Collateralized mortgage obligations		—		—		49,110		458		49,110		458		—		—		49,110		458		49,110		458
	$	33,161	$	619	$	52,253	$	489	$	85,414	$	1,108	$	33,161	$	619	$	52,253	$	489	$	85,414	$	1,108

As of September 30, 2020 the Company had 40 securities with market values below their cost basis. Unrealized losses in both portfolios relate primarily to changes in interest 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 ~~June~~September 30, 2020 and December 31, 2019 and did not intend to nor believe that it would be required to sell these securities before recovery of the indicated impairment. The unrealized losses on these securities were determined to be non-credit related as of December 31, 2019 and as noted above, 0 allowance for credit losses was recorded as of January 1, 2020 or ~~June~~September 30, 2020.

The Company generally makes loans in its market areas of south and central Mississippi; southern and central Alabama; northwest, central and south Louisiana; the northern, central, and panhandle regions of Florida; certain areas of east and northeast Texas, including Houston, Beaumont and Dallas; and Nashville, Tennessee. Loans, net of unearned income, by portfolio are presented at amortized cost basis in the table below. Amortized cost does not include accrued interest, which is reflected in the accrued interest line item in the Consolidated Balance Sheets, totaling ~~$94.6~~$86.0 million and $67.7 million at ~~June~~September 30, 2020 and December 31, 2019, respectively.

	June 30,		December 31,		September 30,		December 31,
(in thousands)	2020		2019		2020		2019
Commercial non-real estate	$	10,465,280	$	9,166,947	$	10,257,788	$	9,166,947
Commercial real estate - owner occupied		2,762,259		2,738,460		2,779,407		2,738,460
Total commercial and industrial		13,227,539		11,905,407		13,037,195		11,905,407
Commercial real estate - income producing		3,350,299		2,994,448		3,406,554		2,994,448
Construction and land development		1,128,959		1,157,451		1,096,149		1,157,451
Residential mortgages		2,877,316		2,990,631		2,754,388		2,990,631
Consumer		2,044,264		2,164,818		1,945,918		2,164,818
Total loans	$	22,628,377	$	21,212,755	$	22,240,204	$	21,212,755

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 non-real estate loans also include loans made under the Small Business Administration’s (SBA) Paycheck Protection Program (PPP). PPP loans are guaranteed by the SBA and are forgivable to the debtor upon satisfaction of certain criteria. The loans bear interest at 1% per annum and have two or five year terms, depending on the date of origination. These loans also earn an origination fee of 1% to 5%, depending on the loan size, that is deferred and amortized over the estimated life of the loan using the effective yield method.

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 credit losses by portfolio class for the ~~six~~nine months ended ~~June~~September 30, 2020 and 2019, as well as the corresponding recorded investment in loans at the end of each period. Effective January 1, 2020, the Company adopted the provisions of ASC 326 (CECL) using a modified retrospective basis. The difference between the December 31, 2019 incurred allowance and the CECL allowance is reflected as a cumulative effect of change in accounting principle in the table below. For further discussion of the day one impact of the CECL adoption, refer to Note 16 – Recent Accounting Pronouncements.

				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
	Six Months Ended June 30, 2020																								Nine Months Ended September 30, 2020
Allowance for credit losses
Allowance for loan losses:
Beginning balance	$	106,432		$	10,977		$	117,409		$	20,869		$	9,350		$	20,331		$	23,292		$	191,251		$	106,432		$	10,977		$	117,409		$	20,869		$	9,350		$	20,331		$	23,292		$	191,251
Cumulative effect of change in accounting principle		(244	)		14,877			14,633			7,287			7,478			12,921			7,092			49,411			(244	)		14,877			14,633			7,287			7,478			12,921			7,092			49,411
Charge-offs		(339,566	)		(1,706	)	$	(341,272	)		(1,501	)		(5	)		(141	)		(10,736	)		(353,655	)		(364,123	)		(1,828	)	$	(365,951	)		(2,211	)		(7	)		(170	)		(13,640	)		(381,979	)
Recoveries		3,299			107		$	3,406			46			451			761			2,543			7,207			4,831			659		$	5,490			46			549			1,078			4,360			11,523
Net provision for loan losses		375,050			37,211		$	412,261			71,210			13,965			23,479			27,509			548,424			401,155			41,336		$	442,491			78,661			12,325			17,613			27,378			578,468
Ending balance - allowance for loan losses	$	144,971		$	61,466		$	206,437		$	97,911		$	31,239		$	57,351		$	49,700		$	442,638		$	148,051		$	66,021		$	214,072		$	104,652		$	29,695		$	51,773		$	48,482		$	448,674
Reserve for unfunded lending commitments:
Beginning balance	$	3,974		$	—		$	3,974		$	—		$	—		$	—		$	—		$	3,974		$	3,974		$	—		$	3,974		$	—		$	—		$	—		$	—		$	3,974
Cumulative effect of change in accounting principle		5,772			288			6,060			449			15,658			17			5,146			27,330			5,772			288			6,060			449			15,658			17			5,146			27,330
Provision for losses on unfunded commitments		(2,900	)		427			(2,473	)		649			10,455			5			(3,369	)		5,267			(3,786	)		187			(3,599	)		1,599			6,046			(11	)		(3,813	)		222
Ending balance - reserve for unfunded lending commitments		6,846			715			7,561			1,098			26,113			22			1,777			36,571			5,960			475			6,435			2,048			21,704			6			1,333			31,526
Total allowance for credit losses	$	151,817		$	62,181		$	213,998		$	99,009		$	57,352		$	57,373		$	51,477		$	479,209		$	154,011		$	66,496		$	220,507		$	106,700		$	51,399		$	51,779		$	49,815		$	480,200

Allowance for loan losses:
Individually evaluated	$	12,619		$	1,237		$	13,856		$	457		$	55		$	477		$	377		$	15,222		$	27,304		$	1,344		$	28,648		$	24		$	169		$	416		$	456		$	29,713
Collectively evaluated		132,352			60,229			192,581			97,454			31,184			56,874			49,323			427,416			120,747			64,677			185,424			104,628			29,526			51,357			48,026			418,961
Allowance for loan losses	$	144,971		$	61,466		$	206,437		$	97,911		$	31,239		$	57,351		$	49,700		$	442,638		$	148,051		$	66,021		$	214,072		$	104,652		$	29,695		$	51,773		$	48,482		$	448,674
Reserve for unfunded lending commitments:
Individually evaluated	$	751		$	—		$	751		$	—		$	—		$	—		$	—		$	751		$	992		$	—		$	992		$	—		$	—		$	—		$	5		$	997
Collectively evaluated		6,095			715			6,810			1,098			26,113			22			1,777			35,820			4,968			475			5,443			2,048			21,704			6			1,328			30,529
Reserve for unfunded lending commitments:	$	6,846		$	715		$	7,561		$	1,098		$	26,113		$	22		$	1,777		$	36,571		$	5,960		$	475		$	6,435		$	2,048		$	21,704		$	6		$	1,333		$	31,526
Total allowance for credit losses	$	151,817		$	62,181		$	213,998		$	99,009		$	57,352		$	57,373		$	51,477		$	479,209		$	154,011		$	66,496		$	220,507		$	106,700		$	51,399		$	51,779		$	49,815		$	480,200
Loans:
Individually evaluated	$	89,314		$	9,982		$	99,296		$	6,222		$	1,007		$	5,710		$	3,970		$	116,205		$	73,139		$	11,124		$	84,263		$	5,549		$	1,837		$	6,064		$	3,924		$	101,637
Collectively evaluated		10,375,966			2,752,277			13,128,243			3,344,077			1,127,952			2,871,606			2,040,294			22,512,172			10,184,649			2,768,283			12,952,932			3,401,005			1,094,312			2,748,324			1,941,994			22,138,567
Total loans	$	10,465,280		$	2,762,259		$	13,227,539		$	3,350,299		$	1,128,959		$	2,877,316		$	2,044,264		$	22,628,377		$	10,257,788		$	2,779,407		$	13,037,195		$	3,406,554		$	1,096,149		$	2,754,388		$	1,945,918		$	22,240,204

				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
	Six Months Ended June 30, 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		(21,653	)		(71	)		(21,724	)		(10	)		-			(439	)		(8,167	)		(30,340	)		(33,382	)		(137	)		(33,519	)		(10	)		(7	)		(660	)		(13,169	)		(47,365	)
Recoveries		2,730			221			2,951			2			97			266			2,004			5,320			5,662			284			5,946			518			108			433			2,866			9,871
Net provision for loan losses		17,698			328			18,026			7,781			(4,079	)		(551	)		4,954			26,131			29,267			545			29,812			7,604			(5,982	)		(2,076	)		9,194			38,552
Ending balance	$	96,527		$	14,235		$	110,762		$	25,411		$	11,665		$	23,058		$	24,729		$	195,625		$	99,299		$	14,449		$	113,748		$	25,750		$	9,766		$	21,479		$	24,829		$	195,572
Ending balance:
Allowance:
Individually evaluated for impairment	$	8,486		$	142		$	8,628		$	93		$	1		$	146		$	253		$	9,121		$	11,535		$	57		$	11,592		$	49		$	29		$	183		$	365		$	12,218
Amounts related to purchased credit impaired loans		138			172			310			105			151			8,695			313			9,574			135			172			307			40			144			8,032			300			8,823
Collectively evaluated for impairment		87,903			13,921			101,824			25,213			11,513			14,217			24,163			176,930			87,629			14,220			101,849			25,661			9,593			13,264			24,164			174,531
Total allowance	$	96,527		$	14,235		$	110,762		$	25,411		$	11,665		$	23,058		$	24,729		$	195,625		$	99,299		$	14,449		$	113,748		$	25,750		$	9,766		$	21,479		$	24,829		$	195,572
Loans:
Individually evaluated for impairment	$	224,603		$	17,769		$	242,372		$	1,880		$	19		$	4,089		$	1,521		$	249,881		$	201,979		$	11,109		$	213,088		$	2,781		$	3,385		$	4,301		$	1,583		$	225,138
Purchased credit impaired loans		6,313			5,581			11,894			4,702			1,482			98,472			3,444			119,994			33,040			45,124			78,164			27,281			23,431			93,450			6,294			228,620
Collectively evaluated for impairment		8,328,202			2,496,620			10,824,822			2,888,886			1,142,561			2,865,710			2,083,958			19,805,937			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	$	8,559,118		$	2,519,970		$	11,079,088		$	2,895,468		$	1,144,062		$	2,968,271		$	2,088,923		$	20,175,812		$	8,893,004		$	2,734,379		$	11,627,383		$	3,060,568		$	1,190,718		$	3,004,958		$	2,152,325		$	21,035,952

The calculation of the allowance for credit losses under CECL is performed using two primary approaches: a collective approach for pools of loans that have similar risk characteristics using a loss rate analysis, and a specific reserve analysis for credits individually evaluated. The increase in the allowance for credit losses for the ~~six~~nine months ended ~~June~~September 30, 2020 reflects the impact of the ~~unprecedented~~ economic shutdown in response to the pandemic and the significant drop in oil prices. The allowance for credit losses was developed using multiple Moody’s macroeconomic forecasts applied to internally developed credit models for a two year reasonable and supportable period. The Company weighted the baseline economic forecast, ~~50%~~ which ~~includes a~~Moody’s defines as the “most likely outcome” based on current conditions and its view of where the economy is headed, at 50%. Following the sharp recession in the first ~~and second quarters~~half of 2020, ~~with~~the baseline scenario assumes a gradual recovery beginning in the second half of ~~2020.~~2020, with the most meaningful growth occurring after a vaccine for the coronavirus becomes widely available in the second quarter of 2021. The upside scenario S-1 and the downside scenario S-2 were each weighted 25% to incorporate reasonably possible alternative outcomes. The S-1 scenario reflects reasonably possible improving conditions and a quicker recovery in ~~the second half of~~ 2020 and in 2021 compared to the baseline. The S-2 scenario reflects reasonably possible ~~worsening~~slower economic ~~conditions~~recovery, with higher instances of infection and ~~a double-dip recession in~~death, and restrictions on travel and business winding down somewhat more slowly as compared to the ~~fourth quarter of 2020 and the first quarter of 2021.~~baseline. The degradation in economic conditions during the ~~six~~nine months ended ~~June~~September 30, 2020 created the need for an increased allowance across all portfolios. The allowance for credit loss activity for the ~~first six~~nine months ofended September 30, 2020 also reflects the impact of the ~~transfer~~sale of $497 million of energy-related ~~loans to held for sale in anticipation of a third quarter 2020 transaction.~~loans. The write-down to loans’ observable market value plus cost to sell resulted in charge-offs of $242.6 million and a reserve release of $82.5 million, for a net provision for credit losses impact of $160.1 million, which is mostly reflected in the commercial non-real estate portfolio. Detail of the individually evaluated allowance is provided in the impaired loans section that follows.

The following table shows the composition of nonaccrual loans by portfolio class. Prior to the adoption of CECL, purchased credit impaired loans accounted for in pools with an accretable yield were considered to be performing. Such loans totaled $17.5 million at December 31, 2019.

	June 30,		December 31,		September 30,		December 31,
(in thousands)	2020		2019		2020		2019
Commercial non-real estate	$	93,471	$	178,678	$	78,184	$	178,678
Commercial real estate - owner occupied		14,120		7,708		14,683		7,708
Total commercial and industrial		107,591		186,386		92,867		186,386
Commercial real estate - income producing		7,180		2,594		7,028		2,594
Construction and land development		2,498		1,217		3,234		1,217
Residential mortgages		42,237		39,262		43,596		39,262
Consumer		24,473		16,374		24,737		16,374
Total loans	$	183,979	$	245,833	$	171,462	$	245,833

For the ~~six~~nine months ended ~~June~~September 30, 2020 and 2019, the estimated amount of interest income that would have been recorded had the loans not been assigned nonaccrual status was ~~$8.4~~$10.6 million and ~~$6.4~~$9.9 million, respectively.

Nonaccrual loans include nonaccruing loans modified in troubled debt restructurings (“TDRs”) of ~~$55.2~~$39.9 million and $132.5 million at ~~June~~September 30, 2020 and December 31, 2019, respectively. Total TDRs, both accruing and nonaccruing, were ~~$65.0~~$49.1 million at ~~June~~September 30, 2020 and $193.7 million at December 31, 2019. All TDRs are individually evaluated for credit loss. At ~~June~~September 30, 2020 and December 31, 2019, the Company had unfunded commitments of ~~$0.8~~$1.0 million and $2.4 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 ~~six~~three and nine months ended ~~June~~September 30, 2020 and 2019:

	Three Months Ended												Three Months Ended
($ in thousands)	June 30, 2020						June 30, 2019						September 30, 2020						September 30, 2019
			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		2	$	350	$	350		1	$	334	$	334		—	$	—	$	—		2	$	13,083	$	6,271
Commercial real estate - owner occupied		—		—		—		—		—		—		—		—		—		—		—		—
Total commercial and industrial		2		350		350		1		334		334		—		—		—		2		13,083		6,271
Commercial real estate - income producing		—		—		—		—		—		—		—		—		—		1		123		123
Construction and land development		1		15		15		—		—		—		—		—		—		3		323		323
Residential mortgages		8		1,810		1,810		2		638		638		5		1,358		1,358		3		297		297
Consumer		2		30		30		—		—		—		2		25		25		4		70		70
Total loans		13	$	2,205	$	2,205		3	$	972	$	972		7	$	1,383	$	1,383		13	$	13,896	$	7,084

	Six Months Ended												Nine Months Ended
($ in thousands)	June 30, 2020						June 30, 2019						September 30, 2020						September 30, 2019
Troubled Debt Restructurings:	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
Commercial non-real estate		3	$	745	$	745		8	$	14,137	$	14,137		3	$	745	$	745		10	$	27,220	$	20,408
Commercial real estate - owner occupied		—		—		—		1		167		167		—		—		—		1		167		167
Total commercial and industrial		3		745		745		9		14,304		14,304		3		745		745		11		27,387		20,575
Commercial real estate - income producing		—		—		—		—		—		—		—		—		—		1		123		123
Construction and land development		1		15		15		—		—		—		1		15		15		3		323		323
Residential mortgages		9		2,066		2,066		7		1,902		1,902		14		3,424		3,424		10		2,199		2,199
Consumer		5		64		64		2		46		46		7		89		89		6		116		116
Total loans		18		2,890		2,890		18	$	16,252	$	16,252		25		4,273		4,273		31	$	30,148	$	23,336

The TDRs modified during the ~~six~~nine months ended ~~June~~September 30, 2020 reflected in the table above include $0.7 million of loans with extended amortization terms or other payment concessions, ~~and~~$1.1 million with reduced interest rates, $0.4 million with significant covenant waivers and ~~$1.8~~$2.1 million with other modifications. The TDRs modified during the ~~six~~nine months ended ~~June~~September 30, 2019 include ~~$0.1~~$0.6 million of loans with extended amortization terms or other payment concessions, ~~$9.1~~$22.1 million with significant covenant waivers and ~~$7.0~~$7.4 million with other modifications.

NaN commercial non-real estate loan totaling $0.4 million, 1 residential mortgage loan totaling $0.6 million, and 2 consumer loans totaling $0.2 million that defaulted during the ~~six~~nine months ended ~~June~~September 30, 2020 had been modified in a TDR during the twelve months prior to default. NaN loans that defaulted during the ~~six~~nine months ended ~~June~~September 30, 2019 had been modified in a TDR during the twelve months prior to default.

The tables below present loans that are individually evaluated by portfolio class at ~~June~~September 30, 2020 and December 31, 2019. Loans individually evaluated include nonaccrual loans, TDRs and other loans that do not share common characteristics with loans evaluated on a collective basis that have aggregate relationship balances of $1 million or more.

	June 30, 2020								September 30, 2020
(in thousands)	Recorded investment without an allowance		Recorded investment with an allowance		Unpaid principal balance		Related allowance for loan loss		Recorded investment without an allowance		Recorded investment with an allowance		Unpaid principal balance		Related allowance for loan loss
Commercial non-real estate	$	42,426	$	46,888	$	150,630	$	12,619	$	20,689	$	52,450	$	125,893	$	27,304
Commercial real estate - owner occupied		3,177		6,805		12,764		1,237		6,900		4,224		14,029		1,344
Total commercial and industrial		45,603		53,693		163,394		13,856		27,589		56,674		139,922		28,648
Commercial real estate - income producing		1,332		4,890		7,018		457		5,453		96		7,016		24
Construction and land development		667		340		1,007		55		667		1,170		1,838		169
Residential mortgages		1,921		3,789		6,251		477		2,890		3,174		6,869		416
Consumer		1,567		2,403		3,970		377		1,592		2,332		3,924		456
Total loans	$	51,090	$	65,115	$	181,640	$	15,222	$	38,191	$	63,446	$	159,569	$	29,713

The tables below present the average balances and interest income for individually evaluated loans for the ~~six~~three and nine months ended ~~June~~September 30, 2020 and 2019. Interest income recognized represents interest on accruing loans modified in a TDR.

	Three Months Ended								Three Months Ended
	June 30, 2020				June 30, 2019				September 30, 2020				September 30, 2019
(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	$	247,526	$	217	$	228,055	$	1,444	$	81,227	$	37	$	213,291	$	1,062
Commercial real estate - owner occupied		7,083		—		17,371		71		10,553		—		14,439		45
Total commercial and industrial		254,609		217		245,426		1,515		91,780		37		227,730		1,107
Commercial real estate - income producing		6,761		6		2,274		7		5,886		6		2,331		7
Construction and land development		2,179		2		19		—		1,422		3		1,702		2
Residential mortgages		5,168		17		4,743		2		5,887		22		4,195		2
Consumer		2,625		23		1,515		18		3,947		21		1,552		21
Total loans	$	271,342	$	265	$	253,977	$	1,542	$	108,922	$	89	$	237,510	$	1,139

	Six Months Ended								Nine Months Ended
	June 30, 2020				June 30, 2019				September 30, 2020				September 30, 2019
(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	$	245,320	$	739	$	231,750	$	3,140	$	190,622	$	776	$	225,597	$	4,202
Commercial real estate - owner occupied		5,683		-		18,346		151		7,306		—		17,044		196
Total commercial and industrial		251,003		739		250,096		3,291		197,928		776		242,641		4,398
Commercial real estate - income producing		5,680		12		2,480		14		5,749		18		2,430		21
Construction and land development		1,996		4		45		—		1,805		7		597		2
Residential mortgages		5,034		21		4,690		7		5,318		43		4,525		9
Consumer		2,004		46		1,386		34		2,651		67		1,442		55
Total loans	$	265,717	$	822	$	258,697	$	3,346	$	213,451	$	911	$	251,635	$	4,485

The TDR disclosure above does not include loans modified under Section 4013 of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) signed into law on March 27, 2020, which allows financial institutions to exclude eligible modifications from TDR ~~reporting.~~assessment. Eligible modification must be (1) related to COVID-19, (2) executed on a loan that was not more than 30 days past due as of December 31, 2019 and (3) executed between March 1, 2020 and the earlier of 60 days after the date of the termination of the national emergency or December 31, 2020. ~~As of June~~At September 30, 2020, there were ~~6,945~~817 loans totaling ~~$2.7 billion~~$564.8 million with active short-term payment ~~deferral modifications~~deferrals of principal, interest or both, ~~that are eligible to be excluded from TDR reporting requirements.~~or other qualifying CARES Act modifications. These loans are ~~also excluded from reporting~~reported in the aging analysis that follows ~~as delinquency is tracked under~~based on the modified terms.

The tables below present the aging analysis of past due loans by portfolio class at ~~June~~September 30, 2020 and December 31, 2019. Prior to the adoption of CECL, purchased credit impaired loans accounted for in pools under ASC 310-30 with an accretable yield were considered to be current in the table below as of December 31, 2019. These loans totaled $6.1 million for 30-59 days past due, $2.0 million for 60-89 days past due and $8.3 million for both greater than 90 days past due and greater than 90 days past due and still accruing at December 31, 2019.

June 30, 2020	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, 2020															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	$	3,940	$	3,079	$	80,668	$	87,687	$	10,377,593	$	10,465,280	$	2,497	$	6,026	$	14,277	$	65,705	$	86,008	$	10,171,780	$	10,257,788	$	5,110
Commercial real estate - owner occupied		1,265		1,012		12,409		14,686		2,747,573		2,762,259		117		535		2,276		11,708		14,519		2,764,888		2,779,407		113
Total commercial and industrial		5,205		4,091		93,077		102,373		13,125,166		13,227,539		2,614		6,561		16,553		77,413		100,527		12,936,668		13,037,195		5,223
Commercial real estate - income producing		1,519		593		7,720		9,832		3,340,467		3,350,299		663		165		30,238		8,701		39,104		3,367,450		3,406,554		2,490
Construction and land development		476		2,060		2,338		4,874		1,124,085		1,128,959		406		1,076		237		3,178		4,491		1,091,658		1,096,149		393
Residential mortgages		3,942		11,119		30,769		45,830		2,831,486		2,877,316		626		3,164		11,779		32,908		47,851		2,706,537		2,754,388		1,818
Consumer		9,245		5,874		14,712		29,831		2,014,433		2,044,264		921		9,451		4,621		12,920		26,992		1,918,926		1,945,918		515
Total	$	20,387	$	23,737	$	148,616	$	192,740	$	22,435,637	$	22,628,377	$	5,230	$	20,417	$	63,428	$	135,120	$	218,965	$	22,021,239	$	22,240,204	$	10,439

The following tables present the credit quality indicators by segments and portfolio class of loans held for investment at ~~June~~September 30, 2020 and December 31, 2019. The Company routinely assesses the ratings of loans in its portfolio through an established and comprehensive portfolio management process. In addition, the Company often ~~looks at~~examines portfolios of loans to determine if there are areas of risk not specifically identified in its loan by loan approach. As a result, several loans were downgraded to pass-watch in 2020 in reaction to the economic downturn caused by the pandemic and other environmental factors. In alignment with regulatory guidance, the Company has been working with its customers to manage through this period of severe uncertainty and economic stress, including providing various types of loan deferrals. AsWhile a significant number of these deferrals ~~expire~~have expired, our ability to predict future cash flow is limited due to the economic uncertainty, and ~~more information becomes available concerning individual borrower circumstances,~~we expect that further risk rating adjustments may be required.

	June 30, 2020												September 30, 2020
(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	$	9,954,470	$	2,564,962	$	12,519,432	$	3,239,192	$	1,097,257	$	16,855,881	$	9,617,743	$	2,562,635	$	12,180,378	$	3,278,116	$	1,062,252	$	16,520,746
Pass-Watch		263,198		136,658		399,856		78,302		24,617		502,775		368,292		127,688		495,980		83,736		27,851		607,567
Special Mention		60,022		9,160		69,182		10,079		1,588		80,849		85,096		37,299		122,395		2,021		210		124,626
Substandard		187,590		51,479		239,069		22,726		5,497		267,292		186,657		51,785		238,442		42,681		5,836		286,959
Doubtful		—		—		—		—		—		—		—		—		—		—		—		—
Total	$	10,465,280	$	2,762,259	$	13,227,539	$	3,350,299	$	1,128,959	$	17,706,797	$	10,257,788	$	2,779,407	$	13,037,195	$	3,406,554	$	1,096,149	$	17,539,898

	June 30, 2020						December 31, 2019						September 30, 2020						December 31, 2019
(in thousands)	Residential mortgage		Consumer		Total		Residential mortgage		Consumer		Total		Residential mortgage		Consumer		Total		Residential mortgage		Consumer		Total
Performing	$	2,832,131	$	2,018,614	$	4,850,745	$	2,950,854	$	2,147,312	$	5,098,166	$	2,708,484	$	1,920,049	$	4,628,533	$	2,950,854	$	2,147,312	$	5,098,166
Nonperforming		45,185		25,650		70,835		39,777		17,506		57,283		45,904		25,869		71,773		39,777		17,506		57,283
Total	$	2,877,316	$	2,044,264	$	4,921,580	$	2,990,631	$	2,164,818	$	5,155,449	$	2,754,388	$	1,945,918	$	4,700,306	$	2,990,631	$	2,164,818	$	5,155,449

The following table presents credit quality disclosures of amortized cost by class and vintage for term loans and by revolving and revolving converted to amortizing at ~~June~~September 30, 2020. ~~We define~~The Company defines vintage as the later of origination, renewal or restructure date.

	Term Loans																			Term Loans
	Amortized Cost Basis by Origination Year																			Amortized Cost Basis by Origination Year
		2020		2019		2018		2017		2016		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total			2020		2019		2018		2017		2016		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total
Commercial Loans:																				Commercial Loans:
Pass		$	4,296,564	$	3,327,755	$	2,146,064	$	1,672,980	$	1,187,467	$	1,605,845	$	2,518,581	$	100,625	$	16,855,881		$	4,980,953	$	3,098,996	$	1,979,152	$	1,508,213	$	1,067,144	$	1,417,583	$	2,385,763	$	82,942	$	16,520,746
Pass-Watch			52,823		53,406		64,528		86,433		45,023		85,315		102,437		12,810		502,775			70,389		101,741		56,681		78,598		53,259		116,413		125,134		5,352		607,567
Special Mention			1,598		4,372		5,798		26,179		13,687		16,091		11,882		1,242		80,849			5,687		13,763		24,805		17,888		31,355		2,268		25,960		2,900		124,626
Substandard			32,647		36,746		56,298		15,284		19,411		42,952		51,322		12,632		267,292			76,243		21,552		24,505		37,104		18,231		50,571		48,004		10,749		286,959
Doubtful			—		—		—		—		—		—		—		—		—			—		—		—		—		—		—		—		—		—
Total Commercial Loans		$	4,383,632	$	3,422,279	$	2,272,688	$	1,800,876	$	1,265,588	$	1,750,203	$	2,684,222	$	127,309	$	17,706,797		$	5,133,272	$	3,236,052	$	2,085,143	$	1,641,803	$	1,169,989	$	1,586,835	$	2,584,861	$	101,943	$	17,539,898
Residential Mortgage and Consumer Loans:																				Residential Mortgage and Consumer Loans:
Performing		$	277,534	$	506,177	$	531,553	$	698,878	$	583,723	$	1,004,835	$	1,242,586	$	5,459		4,850,745		$	351,828	$	501,172	$	489,007	$	629,621	$	536,380	$	901,979	$	1,212,937	$	5,609		4,628,533
Nonperforming			954		4,275		6,360		10,315		5,546		35,972		3,409		4,004		70,835			1,244		4,540		6,181		10,422		5,178		35,169		3,039		6,000		71,773
Total Consumer Loans		$	278,488	$	510,452	$	537,913	$	709,193	$	589,269	$	1,040,807	$	1,245,995	$	9,463	$	4,921,580		$	353,072	$	505,712	$	495,188	$	640,043	$	541,558	$	937,148	$	1,215,976	$	11,609	$	4,700,306

Under the transition provisions for the application of CECL, the Company has classified all loans previously accounted for as purchased credit impaired under ASC 310-30 to be classified as purchased credit deteriorated. The application of these provisions resulted in an increase of $19.8 million to the amortized cost basis of the financial asset and the allowance for credit losses at the date of adoption, representing the remaining credit portion of the purchased discount. The Company elected not to maintain pools of loans accounted for under Subtopic 310-30 with the adoption of CECL. The remaining noncredit discount was allocated to the individual loans and will be accreted to interest income using the interest method based on the effective interest rate. Changes in the carrying amount of purchased credit impaired loans and related accretable yield are presented in the following table for the year ended December 31, 2019.

Loans in process of foreclosure include those for which formal foreclosure proceedings are in process according to local requirements of the applicable jurisdiction. Included in loans at September 30, 2020 and December 31, 2019 was $11.2 million and $8.6 million of consumer loans secured by single family residential real estate that were in process of foreclosure. In March 2020, in light of the economic ~~conditions~~deterioration stemming from the COVID-19 pandemic, the Company placed all active residential mortgage foreclosures on hold and suspended the filing of new foreclosures. On September 1, 2020 the Company resumed foreclosure activity in all states except Florida, where the moratorium expired on September 30 and foreclosure activity resumed October 1, 2020. In addition to the single family residential real estate loans in process of foreclosure, the Company also held ~~$4.9~~$3.6 million and $6.3 million of foreclosed single family residential properties in other real estate owned at ~~June~~September 30, 2020 and December 31, 2019, respectively.

~~Included in loans held for sale at June~~At September 30, 2020 ~~were commercial loans totaling $254.4 million~~ and ~~residential mortgage loans totaling $110.0 million. At~~ December 31, 2019, loans held for sale ~~of $55.9 million consisted~~was comprised only of ~~residential~~ mortgage ~~loans. The $254.4 million of commercial~~ loans ~~held~~originated for sale ~~at June 30, 2020 represents~~in the portion of the Company’s energy loan portfolio sold in a transaction that closed in July 2020. The carrying balance of the loans of $497 million was charged down to the expected net sales proceeds and transferred to loans held for sale at June 30, 2020.secondary market.

Included in short-term borrowings are customer securities sold under agreements to repurchase that mature daily and are secured by U.S. agency securities totaling ~~$654.3~~$806.6 million and $484.4 million at ~~June~~September 30, 2020 and December 31, 2019, 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.

At ~~June~~September 30, 2020 and December 31, 2019, long-term debt was comprised of the following:


	June 30,					December 31,			September 30,			December 31,
(in thousands)		2020			2019				2020			2019
Subordinated notes payable, maturing June 2045		$	150,000		$		150,000		$	150,000		$	150,000
Subordinated notes payable, maturing June 2060			172,500				—			172,500			—
Other long-term debt			73,786				87,890			73,709			87,890
Less: unamortized debt issuance costs			(10,017	)			(4,428	)		(10,322	)		(4,428	)
Total long-term debt		$	386,269		$		233,462		$	385,887		$	233,462

The following table sets forth unamortized debt issuance costs associated with the respective debt instruments ~~as of June~~at September 30, 2020:

					Unamortized						Unamortized
					Debt						Debt
					Issuance						Issuance
(in thousands)		Principal			Costs			Principal			Costs
Subordinated notes payable, maturing June 2045	$		150,000	$		4,340	$		150,000	$		4,296
Subordinated notes payable, maturing June 2060			172,500			5,677			172,500			6,026
Other long-term debt			73,786			—			73,709			—
Total	$		396,286	$		10,017	$		396,209	$		10,322

On June 9, 2020, the Company completed the issuance of subordinated notes payable with an aggregate principal amount of $172.5 million with a stated maturity of June 15, 2060. The notes accrue interest at a fixed rate of 6.25% per annum, with quarterly interest payments ~~beginning~~that began September 15, 2020. Subject to prior approval by the Federal Reserve, the Company may redeem the notes in whole or in part on any interest payment date on or after June 15, 2025. This debt qualifies as tier 2 capital in the calculation of certain regulatory capital ratios. The proceeds from the issuance are intended ~~for use~~ for general corporate purposes, including providing capital to Hancock Whitney Bank if and when deemed appropriate.

On March 9, 2015, the Company completed the issuance of subordinated notes payable with an aggregate principal amount of $150 million with a stated maturity of June 15, 2045. These notes accrue interest at a fixed rate of 5.95% per annum, with quarterly interest payments that began in June 2015. Subject to prior approval by the Federal Reserve, the Company may redeem the notes in whole or in part on any interest payment date on or after June 15, 2020. This debt qualifies as tier 2 capital in the calculation of certain regulatory capital ratios.

Substantially all of the Company’s other long-term debt consists of borrowings associated with tax credit fund activities. Although these borrowings have indicated maturities through 2053, each is expected to be satisfied at the end of the seven-year compliance period for the related tax credit investments.

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 associated with fixed rate brokered deposits, certain investment securities and select pools of variable rate loans. The Company also enters into interest rate derivative agreements as a service to certain qualifying customers. A matched book is managed with respect to these customer derivatives in order to minimize its net interest rate risk exposure resulting from such agreements. The Company 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 ~~June~~September 30, 2020 and December 31, 2019.

		June 30, 2020								December 31, 2019									September 30, 2020								December 31, 2019
				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 - variable rate loans	Cash Flow	$	1,175,000	$	63,765		$	—		$	1,175,000	$	24,172		$	337		Cash Flow	$	1,175,000	$	57,412		—			$	1,175,000	$	24,172		$	337
Interest rate swaps - securities	Fair Value		549,900		238			25,293			441,400		1,474			1,759		Fair Value		762,650		842			24,203			441,400		1,474			1,759
Interest rate swaps - brokered deposits	Fair Value		—		—			—			43,000		—			9		Fair Value		—		—			—			43,000		—			9
			1,724,900		64,003			25,293			1,659,400		25,646			2,105				1,937,650		58,254			24,203			1,659,400		25,646			2,105
Derivatives not designated as hedging instruments:
Interest rate swaps ⁽²⁾	N/A		4,504,336		174,801			178,817			3,759,232		54,512			55,664		N/A		4,560,306		164,273			168,207			3,759,232		54,512			55,664
Risk participation agreements	N/A		277,216		73			155			254,825		21			45		N/A		205,787		78			136			254,825		21			45
Forward commitments to sell residential mortgage loans	N/A		352,445		3,235			2,855			145,623		651			744		N/A		345,871		82			3,584			145,623		651			744
Interest rate-lock commitments on residential mortgage loans	N/A		260,001		1,660			3,071			83,224		369			375		N/A		265,957		2,452			59			83,224		369			375
Foreign exchange forward contracts	N/A		83,042		1,342			1,291			64,632		303			366		N/A		81,492		1,937			1,888			64,632		303			366
Visa Class B derivative contract	N/A		43,565		—			4,982			43,753		—			5,704		N/A		43,565	—				4,616			43,753		—			5,704
			5,520,605		181,111			191,171			4,351,289		55,856			62,898				5,502,978		168,822			178,490			4,351,289		55,856			62,898
Total derivatives		$	7,245,505	$	245,114		$	216,464		$	6,010,689	$	81,502		$	65,003			$	7,440,628	$	227,076		$	202,693		$	6,010,689	$	81,502		$	65,003
Less: netting adjustment ⁽³⁾					(64,003	)		(157,530	)				(27,056	)		(43,914	)					(58,254	)		(146,415	)				(27,056	)		(43,914	)
Total derivative assets/liabilities				$	181,111		$	58,934				$	54,446		$	21,089					$	168,822		$	56,278				$	54,446		$	21,089

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. Amortization of other comprehensive loss on terminated cash flow hedges totaled ~~$1.1~~ $1.4 million and ~~$1.4~~3.4 million for the ~~six~~nine months ended ~~June~~September 30, 2020 and 2019. The notional amounts of the swap agreements in place at ~~June~~September 30, 2020 expire as follows: $50 million in 2021; $475 million in 2022; $550 million in 2023; and $100 million in 2024.

The Company is party to forward-starting fixed payer swaps that convert the latter portion of the term of certain available for sale securities to a floating rate. These derivative instruments are designated as fair value hedges of interest rate risk. 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 September 2025, and maturity dates from January 2028 through March 2031. 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.

The majority of the hedged available for sale securities is a closed portfolio of pre-payable commercial mortgage backed securities. In accordance with ASC 815, prepayment risk may be excluded when measuring the change in fair value of such hedged items attributable to interest rate risk under the last-of-layer approach. At ~~June~~September 30, 2020, the amortized cost basis of the closed portfolio of pre-payable commercial mortgage backed securities totaled ~~$541.2~~$823.6 million. The amount that represents the hedged items was ~~$515.9~~$752.5 million and the basis adjustment associated with the hedged items totaled ~~$25.3~~$23.8 million.

Prior to January 2020, the Company was party to certain interest rate swap agreements that modified 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 matched the features of the hedged deposits. As interest rates declined or increased, the corresponding movement in the value of the certificates of deposit were offset by the change in the value of the interest rate swaps, resulting in no impact to earnings. Interest expense was adjusted by the difference between the fixed and floating rates for the period the swaps are in effect.

The Company 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 Company has offered customers a deferral of the monthly derivative payment/settlement if the associated loan was on deferral. At ~~June~~September 30, 2020, the Company had a receivable totaling ~~$1.3~~$0.1 million related to these deferrals.

The Company 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 Company 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 Company 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 ~~June~~September 30, 2020 and December 31, 2019 the fair value of the liability associated with this contract was ~~$5.0~~$4.6 million and $5.7 million, respectively.

The effects of derivative instruments on the consolidated statements of income for the ~~six~~nine months ended ~~June~~September 30, 2020 and 2019 are presented in the table below. Interest income or the reduction of interest income attributable to cash flow hedges includes amortization of accumulated other comprehensive loss that resulted from termination of interest rate swap contracts.

		Three Months Ended						Six Months Ended						Three Months Ended						Nine Months Ended
		June 30,						June 30,						September 30,						September 30,
Derivative Instruments:	Location of Gain (Loss) Recognized in the Statement of Income:	2020			2019			2020		2019			Location of Gain (Loss) Recognized in the Statement of Income:	2020			2019			2020		2019
Cash flow hedges - variable rate loans	Interest income	$	4,597		$	(1,660	)	$	5,461	$	(3,676	)	Interest income	$	5,788		$	(956	)	$	11,249	$	(4,632	)
Fair value hedges - securities	Interest income		(1	)		—			40		—		Interest income		(7	)		15			33		15
Fair value hedges - brokered deposits	Interest expense		—			(461	)		46		(1,449	)	Interest expense	—				(243	)		46		(1,692	)
All other instruments	Other noninterest income		4,108			3,600			7,979		4,409		Other noninterest income		1,739			4,324			9,718		8,733
Total gain (loss)		$	8,704		$	1,479		$	13,526	$	(716	)
Total gain														$	7,520		$	3,140		$	21,046	$	2,424

Certain of the Company’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 ~~June~~September 30, 2020, the Company was not in violation of any such provisions. The aggregate fair value of derivative instruments with credit risk-related contingent features that were in a net liability position at ~~June~~September 30, 2020 and December 31, 2019 was ~~$47.6~~$47.1 million and $12.9 million, respectively, for which the Company had posted collateral of ~~$47.7~~$47.8 million and $12.4 million, respectively.

The Company’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 ~~June~~September 30, 2020 and December 31, 2019 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 Financial Condition
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 Financial Condition			Presented in the Statement of Financial Condition		Financial Instruments		Cash Collateral		Net Amount
As of June 30, 2020
As of September 30, 2020
Derivative Assets	$	65,960	$	(65,957	)	$	3	$	3	$	—	$	—		$	60,231	$	(60,231	)	$	—	$	—	$	—	$	—
Derivative Liabilities	$	207,355	$	(159,856	)	$	47,499	$	3	$	85,500	$	(38,004	)	$	195,780	$	(148,738	)	$	47,042	$	—	$	87,926	$	(40,884	)

(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 Financial Condition
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 Financial Condition			Presented in the Statement of Financial Condition		Financial Instruments		Cash Collateral		Net Amount
As of December 31, 2019
Derivative Assets	$	27,938	$	(27,915	)	$	23	$	23	$	—	$	—		$	27,938	$	(27,915	)	$	23	$	23	$	—	$	—
Derivative Liabilities	$	56,523	$	(44,570	)	$	11,953	$	23	$	35,113	$	(23,183	)	$	56,523	$	(44,570	)	$	11,953	$	23	$	35,113	$	(23,183	)

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 5.2 million at ~~June~~September 30, 2020 and 4.0 million at December 31, 2019, with a first-in-first-out cost basis of ~~$177.1~~$176.1 million and $135.8 million at ~~June~~September 30, 2020 and December 31, 2019, respectively. Shares outstanding also excludes unvested restricted share awards totaling 1.4 million at both ~~June~~September 30, 2020 and December 31, 2019.

On September 21, 2019, the Company issued approximately 5.0 million shares of common stock at a market value of $38.42 per share as consideration infor its acquisition of MidSouth. Refer to Note 2 – Business Combination for further information.

On September 23, 2019, the Company’s board of directors approved a stock buyback program that authorized the Company to repurchase up to 5.5 million shares of its common stock through the expiration date of December 31, 2020. The program allows the Company to repurchase its common shares in the open market, by block purchase, through accelerated share repurchase programs, in privately negotiated transactions, or as otherwise determined by the Company in one or more 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.

On October 18, 2019, the Company entered into an accelerated share repurchase agreement (“ASR”) with Morgan Stanley & Co. LLC (“Morgan Stanley”) to repurchase $185 million of the Company’s common stock. Pursuant to the ASR, the Company made a $185 million payment to Morgan Stanley on October 21, 2019, and received from Morgan Stanley an initial delivery of 3,611,870 shares of the Company’s common stock, which represented 75% of the estimated total number of shares to be repurchased based on the October 18, 2019 closing price of the Company’s common stock. The value of the remaining shares to be exchanged upon final settlement was accounted for as a forward contract until settlement. Final settlement of the ASR agreement occurred on March 18, 2020. Pursuant to the terms of the settlement, the Company received cash of approximately $12.1 million and a final delivery of 1.0 million shares.

In January 2020, the Company repurchased 315,851 shares of its common stock at a price of $40.26 in a privately negotiated transaction. In total, the Company repurchased 4.9 million ~~shares~~ of the 5.5 million authorized shares under the buyback program at an average price of $37.65 per ~~share through the ASR and a privately negotiated transaction. Refer to Part II, Item 2 of this report for tabular presentation of share repurchase activity during the six months ended June 30, 2020.~~share.

The Company has suspended the repurchase of shares under its stock buyback program.

The components of Accumulated Other Comprehensive Income (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, 2018	$	(50,125	)	$	(12,044	)	$	(110,247	)	$	(8,293	)	$	—		$	(180,709	)	$	(50,125	)	$	(12,044	)	$	(110,247	)	$	(8,293	)	$	—		$	(180,709	)
Net change in unrealized gain or loss		96,514			—			—			29,343			611			126,468
Net change in unrealized loss																				125,589			—			—			35,472			(434	)		160,627
Reclassification of net loss realized and included in earnings		—			—			4,527			3,676			—			8,203			—			—			6,851			4,632			—			11,483
Valuation adjustment to employee benefit plans																				—			—			(7,015	)		—			—			(7,015	)
Amortization of unrealized net loss on securities transferred to HTM		—			1,481			—			—			—			1,481			—			2,435			—			—			—			2,435
Income tax expense		21,822			335			1,023			7,466			—			30,646
Balance, June 30, 2019	$	24,567		$	(10,898	)	$	(106,743	)	$	17,260		$	611		$	(75,203	)
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	)
Balance, December 31, 2019	$	28,950		$	639		$	(101,278	)	$	17,399		$	(434	)	$	(54,724	)	$	28,950		$	639		$	(101,278	)	$	17,399		$	(434	)	$	(54,724	)
Net change in unrealized gain or loss		171,333			—			—			46,480			(984	)		216,829			176,009			—			—			46,180			(4,935	)		217,254
Reclassification of net income or loss realized and included in earnings		—			—			2,944			(5,461	)		—			(2,517	)		—			—			4,656			(11,249	)		—			(6,593	)
Valuation adjustment to employee benefit plans		—			—			(10,251	)		—			—			(10,251	)		—			—			(10,251	)		—			—			(10,251	)
Amortization of unrealized net gain on securities transferred to HTM		—			(289	)		—			—			—			(289	)		—			(378	)		—			—			—			(378	)
Income tax expense (benefit)		38,759			(65	)		(1,653	)		9,281			—			46,322			39,817			(85	)		(1,265	)		7,903			—			46,370
Balance, June 30, 2020	$	161,524		$	415		$	(106,932	)	$	49,137		$	(1,418	)	$	102,726
Balance, September 30, 2020																			$	165,142		$	346		$	(105,608	)	$	44,427		$	(5,369	)	$	98,938

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.

	Six Months Ended							Nine Months Ended
Amount reclassified from AOCI (a)	June 30,						Affected line item on	September 30,						Affected line item on
(in thousands)	2020			2019			the statement of income	2020			2019			the statement of income
Amortization of unrealized net gain or loss or gain on securities transferred to HTM	$	289		$	(1,481	)	Interest income	$	378		$	(2,435	)	Interest income
Tax effect		(65	)		335		Income taxes		(85	)		551		Income taxes
Net of tax		224			(1,146	)	Net income		293			(1,884	)	Net income
Amortization of defined benefit pension and post-retirement items		(2,944	)		(4,527	)	Other noninterest expense (b)		(4,656	)		(6,851	)	Other noninterest expense (b)
Tax effect		666			1,023		Income taxes		1,053			1,546		Income taxes
Net of tax		(2,278	)		(3,504	)	Net income		(3,603	)		(5,305	)	Net income
Reclassification of unrealized gain (loss) on cash flow hedges		6,550			(1,204	)	Interest income		12,602			(1,200	)	Interest income
Tax effect		(1,482	)		272		Income taxes		(2,851	)		271		Income taxes
Net of tax		5,068			(932	)	Net income		9,751			(929	)	Net income
Amortization of loss on terminated cash flow hedges		(1,089	)		(2,472	)	Interest income		(1,353	)		(3,432	)	Interest income
Tax effect		246			559		Income taxes		306			776		Income taxes
Net of tax		(843	)		(1,913	)	Net income		(1,047	)		(2,656	)	Net income
Total reclassifications, net of tax	$	2,171		$	(7,495	)	Net income	$	5,394		$	(10,774	)	Net income

On March 27, 2020, the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation issued an interim final rule that provides an option to delay the estimated impact on regulatory capital stemming from the implementation CECL for a transition period of five years. The five-year rule provides a full delay of the estimated impact of CECL on regulatory capital transition (0%) for the first two years, followed by a three-year transition (25% of the impact included in 2022, 50% in 2023, 75% in 2024 and 100% thereafter). The two-year delay includes the full impact of day one CECL plus the estimated impact of current CECL activity calculated quarterly as 25% of the current ACL over the day one balance (“modified transition amount”). The modified transition amount will be recalculated each quarter in 2020 and 2021, with the December 31, 2021 impact carrying through the remaining three years of the transition. The Company elected the five-year transition period option upon issuance of the interim final rule.

	Three Months Ended				Six Months Ended				Three Months Ended				Nine Months Ended
	June 30,				June 30,				September 30,				September 30,
(in thousands)	2020		2019		2020		2019		2020		2019		2020		2019
Income from bank-owned life insurance	$	3,317	$	4,083	$	7,583	$	7,348	$	6,628	$	4,147	$	14,211	$	11,495
Credit related fees		2,609		2,937		5,674		5,532		2,911		2,988		8,585		8,520
Income from derivatives		4,108		3,600		7,979		4,409		1,739		4,324		9,718		8,733
Other miscellaneous		3,100		4,360		8,077		7,159		3,521		4,866		11,598		12,025
Total other noninterest income	$	13,134	$	14,980	$	29,313	$	24,448	$	14,799	$	16,325	$	44,112	$	40,773

	Three Months Ended						Six Months Ended						Three Months Ended						Nine Months Ended
	June 30,						June 30,						September 30,						September 30,
(in thousands)	2020			2019			2020			2019			2020			2019			2020			2019
Advertising	$	2,696		$	3,253		$	6,930		$	6,333		$	3,159		$	5,435		$	10,089		$	11,768
Corporate value and franchise taxes		4,481			4,215			8,777			8,257			4,872			4,109			13,649			12,366
Telecommunications and postage														4,043			3,610			11,483			10,439
Entertainment and contributions														1,315			2,765			7,146			8,215
Travel expense														309			1,172			1,816			3,614
Printing and supplies		1,627			1,092			2,735			2,261			1,271			1,459			4,006			3,720
Telecommunications and postage		3,374			3,363			7,440			6,829
Travel expense		396			1,344			1,507			2,442
Entertainment and contributions		3,384			2,742			5,831			5,450
Tax credit investment amortization		961			1,234			1,921			2,372			961			1,286			2,882			3,658
Net other retirement expense (income)		(6,337	)		(4,152	)		(12,459	)		(8,257	)		(6,337	)		(4,152	)		(18,796	)		(12,409	)
Other miscellaneous		5,177			6,588			12,646			12,279			5,105			17,374			17,751			29,653
Total other noninterest expense	$	15,759		$	19,679		$	35,328		$	37,966		$	14,698		$	33,058		$	50,026		$	71,024

The Company calculates earnings (loss) per share using the two-class method. The two-class method allocates net income or loss to each class of common stock and participating security according to common dividends declared and participation rights in undistributed earnings. For reporting periods in which a net loss is recorded, net loss is not allocated to participating securities because the holders of such securities bear no contractual obligation to fund or otherwise share in the losses. 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 (loss) per common share follows.

	Three Months Ended					Six Months Ended					Three Months Ended				Nine Months Ended
	June 30,					June 30,					September 30,				September 30,
(in thousands, except per share data)	2020			2019		2020			2019		2020		2019		2020			2019
Numerator:
Net income (loss) to common shareholders	$	(117,072	)	$	88,277	$	(228,105	)	$	167,441	$	79,356	$	67,807	$	(148,749	)	$	235,248
Net dividends or income allocated to participating securities - basic and diluted		422			1,502		849			2,839		1,435		1,141		1,278			3,980
Net income (loss) allocated to common shareholders - basic and diluted	$	(117,494	)	$	86,775	$	(228,954	)	$	164,602	$	77,921	$	66,666	$	(150,027	)	$	231,268
Denominator:
Weighted-average common shares - basic		86,301			85,728	$	86,744		$	85,708		86,358		86,377	$	86,614		$	85,934
Dilutive potential common shares		-			107		-			102		42		85		—			76
Weighted-average common shares - diluted		86,301			85,835	$	86,744		$	85,810		86,400		86,462	$	86,614		$	86,010
Earnings (loss) per common share:
Basic	$	(1.36	)	$	1.01	$	(2.64	)	$	1.92	$	0.90	$	0.77	$	(1.73	)	$	2.69
Diluted	$	(1.36	)	$	1.01	$	(2.64	)	$	1.92	$	0.90	$	0.77	$	(1.73	)	$	2.69

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. For reporting periods in which a net loss is reported, 0 effect is given to potentially dilutive common shares in the computation of loss per common share as any impact from such shares would be antidilutive. Potentially dilutive common shares with a weighted ~~average~~averages of ~~14,150~~78,867 for the three months ended September 30, 2020 and ~~14,183~~43,794 and 37,680 for the three and nine months ended September 30, 2019, respectively, were excluded from the calculation of earnings per common share, ~~for the three and six months ended June 30, 2019, respectively,~~ as the effect would have been antidilutive.

The Company sponsors a qualified defined benefit pension plan, the Hancock Whitney Corporation Pension 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 as of January 1, 2018 and will not thereafter increase. The Company makes contributions to the Pension Plan in amounts sufficient to meet funding requirements set forth in federal employee benefit and tax laws, plus such additional amounts as the Company may determine to be appropriate. During the first quarter of 2019, the Company made a discretionary contribution of $100 million to the Pension Plan.

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 June 30,	2020			2019			2020			2019
For The Three Months Ended September 30,													2020			2019			2020			2019
Service cost	$	3,208		$	2,735		$	28		$	22		$	3,207		$	2,735		$	28		$	22
Interest cost		4,641			4,661			107			164			3,892			4,659			106			165
Expected return on plan assets		(12,797	)		(11,300	)		—			—			(12,047	)		(11,299	)		—			—
Amortization of net loss and prior service costs		1,853			2,552			(141	)		(228	)		1,854			2,553			(142	)		(229	)
Net periodic benefit cost (reduction of cost)	$	(3,095	)	$	(1,352	)	$	(6	)	$	(42	)
Net reduction of periodic benefit cost													$	(3,094	)	$	(1,352	)	$	(8	)	$	(42	)

							Other Post-												Other Post-
(in thousands)	Pension Benefits						Retirement Benefits						Pension Benefits						Retirement Benefits
For the Six Months Ended June 30,	2020			2019			2020			2019
For the Nine Months Ended September 30,													2020			2019			2020			2019
Service cost	$	6,483		$	5,510		$	50		$	51		$	9,690		$	8,245		$	78		$	73
Interest cost		8,423			9,524			271			292			12,315			14,183			377			457
Expected return on plan assets		(24,097	)		(22,600	)		—			—			(36,144	)		(33,899	)		—			—
Amortization of net loss and prior service costs		3,314			4,982			(370	)		(455	)		5,168			7,535			(512	)		(684	)
Net periodic benefit cost (reduction of cost)	$	(5,877	)	$	(2,584	)	$	(49	)	$	(112	)
Net reduction of periodic benefit cost													$	(8,971	)	$	(3,936	)	$	(57	)	$	(154	)

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 18 to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.

At September 30, 2020, the Company had 28,725 outstanding and exercisable stock options, with a weighted average exercise price of $34.11 and a weighted average remaining contractual term of 1.4 years. The options had 0 aggregate intrinsic value.

There were 0 exercises of stock ~~option activity for~~options during the ~~six~~nine months ended ~~June~~September 30, ~~2020 is presented below:~~

2020. The total intrinsic value of options exercised during the ~~six~~nine months ended ~~June~~September 30, ~~2020~~2019 was ~~$0.1~~$0.2 million.

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 ~~June~~September 30, 2020 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, 2020		1,596,258		$	40.43		1,596,258		$	40.43
Granted		75,607			42.88		131,025			31.81
Vested		(20,388	)		42.29		(32,706	)		41.39
Forfeited		(35,441	)		44.84		(55,814	)		41.21
Nonvested at June 30, 2020		1,616,036		$	40.50
Nonvested at September 30, 2020							1,638,763		$	39.70

At ~~June~~September 30, 2020, there was ~~$50.3~~$44.8 million of total unrecognized compensation expense related to nonvested restricted and performance shares expected to vest in the future. This compensation is expected to be recognized in expense over a weighted average period of ~~3.2~~3 years. The total fair value of shares which vested during the ~~six~~nine months ended ~~June~~September 30, 2020 and 2019 was ~~$0.5~~$1.4 million and ~~$0.6~~$1.3 million, respectively.

During the ~~six~~nine months ended ~~June~~September 30, 2020, the Company granted 35,754 performance share awards subject to a total shareholder return (“TSR”) performance metric with a grant date fair value of $46.61 per share and 35,754 performance shares subject to an operating earnings per share performance metric with a grant date fair value of $39.39 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 4947 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 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. At September 30, 2020, the Company had a reserve for unfunded lending commitments of $31.5 million.

The following table presents a summary of the Company’s off-balance sheet financial instruments as of ~~June~~September 30, 2020 and December 31, 2019:

	June 30,		December 31,		September 30,		December 31,
(in thousands)	2020		2019		2020		2019
Commitments to extend credit	$	7,995,491	$	7,530,143	$	7,803,139	$	7,530,143
Letters of credit		369,848		393,284		369,538		393,284

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 ~~June~~September 30, 2020 and December 31, 2019:

	June 30, 2020								September 30, 2020
(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	$	—	$	148,616	$	—	$	148,616	$	—	$	198,616	$	—	$	198,616
Municipal obligations		—		254,686		—		254,686		—		313,656		—		313,656
Corporate debt securities		—		8,206		—		8,206		—		8,183		—		8,183
Residential mortgage-backed securities		—		2,077,323		—		2,077,323		—		2,606,690		—		2,606,690
Commercial mortgage-backed securities		—		1,858,489		—		1,858,489		—		2,101,000		—		2,101,000
Collateralized mortgage obligations		—		584,822		—		584,822		—		419,170		—		419,170
Total available for sale securities		—		4,932,142		—		4,932,142		—		5,647,315		—		5,647,315
Derivative assets (1)		—		181,111		—		181,111		—		168,822		—		168,822
Total recurring fair value measurements - assets		—	$	5,113,253		—	$	5,113,253	$	—	$	5,816,137	$	—	$	5,816,137
Liabilities
Derivative liabilities (1)	$	—	$	53,952	$	4,982	$	58,934	$	—	$	51,662	$	4,616	$	56,278
Total recurring fair value measurements - liabilities	$	—	$	53,952	$	4,982	$	58,934	$	—	$	51,662	$	4,616	$	56,278

	December 31, 2019								December 31, 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	$	—	$	98,672	$	—	$	98,672	$	—	$	98,672	$	—	$	98,672
Municipal obligations		—		249,805		—		249,805		—		249,805		—		249,805
Corporate debt securities		—		7,988		—		7,988		—		7,988		—		7,988
Residential mortgage-backed securities		—		1,924,157		—		1,924,157		—		1,924,157		—		1,924,157
Commercial mortgage-backed securities		—		1,586,467		—		1,586,467		—		1,586,467		—		1,586,467
Collateralized mortgage obligations		—		808,215		—		808,215		—		808,215		—		808,215
Total available for sale securities		—		4,675,304		—		4,675,304		—		4,675,304		—		4,675,304
Derivative assets (1)		—		54,446		—		54,446		—		54,446		—		54,446
Total recurring fair value measurements - assets		—	$	4,729,750		—	$	4,729,750	$	—	$	4,729,750	$	—	$	4,729,750
Liabilities
Derivative liabilities (1)	$	—	$	15,385	$	5,704	$	21,089	$	—	$	15,385	$	5,704	$	21,089
Total recurring fair value measurements - liabilities	$	—	$	15,385	$	5,704	$	21,089	$	—	$	15,385	$	5,704	$	21,089

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 and 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 ~~six~~nine months ended ~~June~~September 30, 2020 and the year ended December 31, 2019 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:

(in thousands)
Balance at December 31, 2018	$	7,304		$	7,304
Cash settlement		(1,900	)		(1,900	)
Losses included in earnings		300			300
Balance at December 31, 2019		5,704			5,704
Cash settlement		(826	)		(1,243	)
Losses included in earnings		104			155
Balance at June 30, 2020	$	4,982
Balance at September 30, 2020				$	4,616

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

June 30, 2020

December 31, 2019

September 30, 2020

December 31, 2019

Derivative liability

4,982

5,704

4,616

5,704

Valuation technique

Discounted cash flow

Unobservable inputs:

Visa Class A appreciation - range

6% - 18%

Visa Class A appreciation - weighted average

12%

Conversion rate - range

1.63x - 1.59x

Conversion rate -weighted average

1.6228x

1.616x

1.6109x

1.616x

Time until resolution

6 - 30 months

12 - 36 months

3-27 months

12 - 36 months

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 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 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.

	June 30, 2020								September 30, 2020
(in thousands)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Collateral-dependent impaired loans	$	—	$	116,205	$	—	$	116,205	$	—	$	91,819	$	—	$	91,819
Other real estate owned and foreclosed assets, net		—		—		18,724		18,724		—		—		11,219		11,219
Total nonrecurring fair value measurements	$	—	$	116,205	$	18,724	$	134,929	$	—	$	91,819	$	11,219	$	103,038

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.

Federal Funds Purchased and 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.

Short-Term FHLB Borrowings – The fair value at September 30, 2020 is estimated by discounting the future contractual cash flows using current market rates at which borrowings with similar terms and options could be obtained. The fair value at December 31, 2019 assumed that the carrying amount was a reasonable estimate of fair value given the relatively stable interest rate environment.

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:

	June 30, 2020										September 30, 2020
							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	$	1,295,428	$	—	$	—	$	1,295,428	$	1,295,428	$	1,263,372	$	—	$	—	$	1,263,372	$	1,263,372
Available for sale securities		—		4,932,142		—		4,932,142		4,932,142		—		5,647,315		—		5,647,315		5,647,315
Held to maturity securities		—		1,553,593		—		1,553,593		1,449,661		—		1,517,688		—		1,517,688		1,408,961
Loans, net		—		116,205		22,886,354		23,002,559		22,185,739		—		91,819		21,970,946		22,062,765		21,791,530
Loans held for sale		—		364,416		—		364,416		364,416		—		103,566		—		103,566		103,566
Derivative financial instruments		—		181,111		—		181,111		181,111		—		168,822		—		168,822		168,822
Financial liabilities:
Deposits		—		—		27,315,521		27,315,521		27,322,268		—		—		27,017,416		27,017,416		27,030,659
Federal funds purchased		575		—		—		575		575		250		—		—		250		250
Securities sold under agreements to repurchase		654,300		—		—		654,300		654,300		806,645		—		—		806,645		806,645
FHLB short-term borrowings		1,100,000		—		—		1,100,000		1,100,000		—		1,161,666		—		1,161,666		1,100,000
Long-term debt		—		436,837		—		436,837		386,269		—		434,597		—		434,597		385,887
Derivative financial instruments		—		53,952		4,982		58,934		58,934		—		51,662		4,616		56,278		56,278

In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” The ASU, more commonly referred to as Current Expected Credit Losses, or CECL, along with several subsequently issued related amendments, were codified as ASC 326. The provisions of ASC 326, which supersede the incurred loss methodology, require the measurement of expected credit losses over the life of financial assets based on historical experience, current conditions, and reasonable and supportable forecasts. As such, financial institutions and other organizations are required to use forward-looking information to inform their credit loss estimates. Many of the loss estimation techniques prescribed by previous guidance will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses for the estimated remaining life of the instrument. An entity will continue to use judgment to determine which loss estimation methods are appropriate for its circumstances. In addition, ASC 326 amends the accounting for credit losses on both held to maturity and available for sale debt securities and purchased financial assets with credit deterioration.

The Company adopted the provisions of ASC 326 on January 1, 2020, with a cumulative-effect adjustment to retained earnings for non-purchased credit impaired loans. For purchased credit impaired loans (as defined by ASC 310-30), there was no impact to retained earnings upon adoption; rather, a portion of the purchase accounting fair value mark was reclassified to allowance for credit losses. A more detailed discussion of the Company’s policy for accounting for credit losses under the provisions of ASC 326 is presented in Note 1 – Basis of Presentation.

The following table reflects the impact of adoption reflected in the Company’s consolidated balance sheets. The increase in the allowance for loan losses represents a reduction in total assets, while the reserve for unfunded lending commitments represents an increase in total liabilities.

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The amendments in this Update provide optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The amendments in this Update are elective and apply to all entities, subject to meeting certain criteria, that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The amendments in this Update provide optional expedients and exceptions for applying generally accepted accounting principles (GAAP) to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this Update apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, except for hedging relationships existing as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. The Company adopted this guidance upon its issuance; at adoption, the Company elected to amend the hedge documentation, without de-designating and re-designating, for all outstanding hedging relationships using the available expedient to assert probability of the hedged interest, regardless of any expected modification in terms related to reference rate reform.

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 the Company adopted the guidance effective January 1, 2020. Refer to Note 15 - Fair Value Measurements for the modified disclosures. Adoption of this guidance had no impact upon the Company’s results of operations or financial condition.

In December 2019, the FASB issued ASU 2019-12, “Simplifying the Accounting for Income Taxes (Topic 740).” The amendments in this update are meant to simplify the accounting for income taxes by removing certain exceptions to GAAP. The amendments also improve consistent application of and simplify GAAP by modifying and/or revising the accounting for certain income tax transactions and by clarifying certain existing codification. The amendments in the update are effective for public business entities for fiscal years and interim periods within those fiscal years beginning after December 15, 2020. The Company is currently assessing the impact of adoption of this guidance, but does not expect the update 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. Adoption of this guidance will have no impact upon the Company’s results of operations or financial condition.

On July 21, 2020, the Company closed the sale of $497 million of energy-related loans, substantially all of which were part of its commercial non-real estate portfolio, for $254.4 million, net of selling costs. As such, on June 30, 2020, the Company recorded a provision for credit losses of $160.1 million to write the loans down to observable market price less cost to sell, consisting of a charge-off of $242.6 million and a release of $82.5 million of existing credit loss reserves. As of June 30, 2020, the remaining carrying balance of $254.4 million is classified in loans held for sale on the consolidated balance sheet.

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 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, 2019, Part II, Item 1A. “Risk Factors” in our Quarterly Report on Form 10-Q for the quarterly period ended ~~March 31,~~June 30, 2020, Part II, Item 1A. “Risk Factors” in this Quarterly Report on Form 10-Q, 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 Pre-Provision Net Revenue as total 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.

Much of the United States began the second quarter of 2020 with some degree of mandated closures for non-essential businesses to allow for social distancing measures in an effort to slow the spread of COVID-19. The economic fallout from the closures has resulted in significant economic harm nationally and across the footprint we serve. Incidence of infections has increased in our footprint in

The COVID-19 pandemic continues to profoundly impact economic conditions throughout the United States and globally. Early and ongoing efforts to contain the spread of the novel coronavirus in the form of stay at home orders and restrictions on travel, trade and retail operations triggered a sharp decline in commercial and consumer activity, resulting in ~~delays~~a recessionary economic environment. Gross domestic product (“GDP”) declined 31% on an annualized basis and unemployment averaged 13% during the second quarter of 2020. The federal government’s CARES Act and other stimulus programs in ~~planned phased economic reopenings. The fiscal stimulus packages announced~~addition to the Federal Reserve’s actions to reduce interest rates to near zero provided businesses and individuals temporary relief from these conditions. Consumer spending increased meaningfully in the ~~latter part~~third quarter of ~~the first quarter, including direct payments to consumers, unemployment benefits,~~2020, resulting in GDP growth and ~~Paycheck Protection Program (PPP) loans, have helped to ease the negative impact to some extent.~~increased hiring and employment. According to ~~the Bureau of Economic Analysis, consumer spending increased 8.2% in May following declines of 6.6% in March and 12.6% in April. Further, according to~~an October 2, 2020 release by the Bureau of Labor Statistics, the ~~national employment market has experienced recent growth, with 2.7 million jobs added in May and 4.8 million in June across a variety~~unemployment rate fell to approximately 8% during the month of ~~industries, most prevalently in~~September, reflecting the hospitality industry. Despite the recent growth, industries where we have significant concentration remain under financial pressure. Unemployment rates across our footprint are trending favorably since peaking in April. The impact to our business will be contingent upon the pace and successpartial resumption of ~~business~~economic activities as many jurisdictions began or continued phased reopening measures in our markets, advancements for treatment and/or vaccines, and restoration of consumer confidence, which would allow for a successful restart of the economy. Timing and success of these items are difficult to predict; therefore, significant uncertainty exists for the near term. These economic conditions have been reflected in our second quarter results most notably through the allowance for credit losses and losses associated with a sale of a portion of our energy portfolio, discussed in more detail below.programs.

The Company utilizes economic forecasts produced by Moody’s Analytics (Moody’s) that provide various scenarios to assist with the development of our economic outlook. These forecasts are anchored on a baseline forecast scenario, which by definition reflects a 50% probability ~~distribution~~ that the economy will perform better or worse than the forecasted baseline parameters. Several upside and downside scenarios are ~~also provided~~produced that are derived from the baseline scenario. ~~The June~~In the September 2020 ~~baseline scenario reflects~~Baseline forecast, the ~~continued damage caused by the pandemic on the global economy with a sharp and severe recession that began~~economic recovery in the ~~latter part of~~near-term is expected to be somewhat faster than the first quarter and continued through the second quarter. This scenario assumes the worst of the economic fallout from the virus occurred in the second quarter and that recovery begins in the third quarter of 2020,June forecast, but atgrowth is muted until a ~~slower pace than forecasted in the March 2020 scenarios.~~vaccine is widely available. Key underlying assumptions in the Baseline forecast are that (1) there is not a second wave of ~~the virus that seriously disrupts businesses again is not expected,~~economic shutdown, (2) a vaccine will be made ~~widely~~ available by April 2021 with infections abating by June 2021, (3) unemployment rates average 9.1% in ~~summer~~the fourth quarter of 2020, 8.4% in 2021, and ~~(3) to support the economy,~~6.4% in 2022, (4) lawmakers will pass an additional stimulus bill in ~~the second half of 2020. Further, the forecast includes the assumption~~2020 that is split between aid for state and local governments and unemployment benefits, and (5) the Federal Reserve will continue to respond to the economic damage by maintaining rates at or near zero until late 2023, providing liquidity to short-term funding markets, maintaining reduced bank capital, liquidity and reserve requirements, and utilizing unlimited quantitative easing through purchases of treasuries and agency mortgage backed securities. 2023.

The alternative Moody’s forecast scenarios have varying degrees of positive and negative severity of the outcome of the economic downturn, as well as varying shapes and length of recovery. Management determined that assumptions provided for in the stronger and slower near-term growth scenarios (S-1 and S-2, respectively) were reasonably possible, and as such, the S-1 and S-2 scenarios were given consideration through probability weighting in our allowance for credit losses calculation at ~~June~~September 30, 2020. We believe ~~the~~these alternative scenarios ~~provided for~~ are less likely to occur than ~~baseline~~the Baseline and have weighted them accordingly in developing our ~~overall~~ economic ~~outlook.~~forecast. The extent to which observed and forecasted economic conditions deteriorate or recover beyond that currently forecasted may result in additional volatility and allowance for credit loss builds or releases in the future. Changes in the depth and duration of these ~~unprecedented~~ economic conditions may also require revisions to our currently forecasted cash flows that could result in impairment of certain intangible or other assets in future periods.

Our response at the outset of the ~~pandemic~~COVID-19 crisis was proactive and continues to be adaptive to ongoing changing conditions. We have taken deliberate measures to maintain a strong liquidity position and enhance capital levels, control both interest and noninterest expense, and build an allowance for credit losses that we believe to be appropriate in light of current and forecasted economic ~~and social~~ conditions. Business continuity plans continue to be effective in maintaining operations and we continue to meet the needs of the customers we serve. Our online and mobile banking applications have also allowed us to continue to assist our customers. A mix of corporate service team members continue to support our operations effectively remotely. We have continued to take appropriate measures to maintain our liquidity and strengthen our balance sheet while maintaining solid capital levels. These measures include, among other things, increasing our line of credit with the Federal Reserve to $4.7 billion and increasing other internal sources (i.e. free securities and balances kept at the Federal Reserve) to $3.9 billion, to provide total net liquidity of $17.4 billion at June 30, 2020, an increase of $3.4 billion linked quarter. These measures have allowed the Company to continue to effectively support and participateparticipated in ~~the~~ various economic relief strategies, ~~employed at~~including the ~~federal level~~origination of $2.4 billion of Small Business Administration Paycheck Protection Program (PPP) loans, and ~~provide loan payment deferral options in response to the pandemic to assist new and existing customers. In mid-May, deferral modifications~~offering temporary waivers of certain service fees, short-term deferrals of principal and/or interest ~~under this program peaked at $3.6 billion. Demand or need~~on loan payments as well as other modifications to loan repayment terms for ~~such modifications has diminished significantly since then, with $2.7 billion and $1.4 billion on active deferrals as of June 30 and July 15, 2020, respectively.~~

customers affected by COVID-19. TheCoronavirus Aid, Relief, and Economic Security ("CARES") Act, as amended, contains substantial tax and spending provisions intended to address the impact of the COVID-19 pandemic, including PPP, a $659 billion program designed to aid small- and medium-sized businesses through federally guaranteed loans distributed through banks. As of June 30, 2020, the Company had originated 12,662 PPP loans ~~totaling $2.3 billion~~provided loan growth and contributed favorably to ~~our customers, approximately 89% of which were in amounts less than $350,000. The fees earned by~~ originating these loans will be accreted into interest income over the expected life of the loans. Our second quarter results include $17.4 million of fees and interest attributable to these loans. Many of the PPP loans originated were self-funded, as recipients placed PPP loans in deposit accounts at the bank. This extra liquidity improved our net interest income and margin ~~but negatively~~during the second and third quarters, while providing much needed assistance in the communities we serve.

We have been able to return most of our financial centers to full service operation and substantially all of our back office associates to onsite work in compliance with guidelines from the Centers for Disease Control and Prevention. Recent easing of certain restrictions on movement and the impacts of government stimulus programs and the low interest rate environment have positively impacted business activity for both commercial and consumer customers. We experienced an increase in most categories of noninterest income, including sizable increases in secondary mortgage origination and sales activity, bank card usage fees and deposit account service charges, ~~on deposits~~albeit not to pre-pandemic levels. We initiated cost reduction measures in the third quarter, including closing two trust locations in New York and New Jersey in mid-September 2020, closing 12 branch locations in Louisiana and Mississippi scheduled for late October 2020 and reducing headcount through higher vacancy levels and attrition, as well as other initiatives. Increased business activity, cost control measures, and balance sheet de-risking strategies undertaken in the first half of the year, including the sale of a large portion of the energy portfolio, resulted in a return to profitability in the third quarter of 2020.

Despite recent improvements in certain ~~other noninterest income items.~~ economic indicators, significant constraints to commerce remain in place, and considerable uncertainty remains over the timing of an effective and widely available coronavirus vaccine, the timing and scope of additional government stimulus packages, and the economic impact resulting from the outcome of the November 2020 elections. The duration

~~Two other strategic actions taken included successfully raising $172.5 million in subordinated notes~~and extent of the downturn and speed of the related recovery on our business, customers, and the ~~opportunistic disposition of $497 million of energy-related loans. The issuance~~economy as a whole remains uncertain.

Highlights of the subordinated notes, which have a 40 year maturity and 6.25% interest rate, are included in tier 2 capital, providing additional capital to help support, among other things, the execution of an overall de-risking of the balance sheet, including the energy loan sale. Following these transactions, the Company remains in a solid capital position with an excess over regulatory required capital levels, including the capital conservation buffer. The execution of the energy loan sale has more closely aligned our asset quality metrics with peers and has provided for more granularity in the loan portfolio.

As noted above, our customers have taken measures to enhance their liquidity, with significant draws on existing credit lines at the end of the first quarter, participation in PPP, and seeking loan payment deferrals. Excluding the impact of PPP, there was contraction of the portfolio due to repayment of amounts drawn in first quarter compounded with general lack of loan demand. As funding from government sponsored relief programs is utilized and economic conditions remain depressed, loan demand will likely continue to fall in the near term. Also, with historically low interest rates and as the effects of fees earned on PPP loan diminish, pressure on the net interest margin will continue. On a positive note, customers have taken advantage of the favorable rate environment to refinance existing mortgages or purchase homes, which contributed favorably to the income from secondary mortgage operations during the second quarter. Increased mortgage origination volume will likely continue, albeit to a lesser extent, in the short-term with the expectation of returning to typical levels by the year’s end. We continue to monitor and respond to the impact of the pandemic closely, as well as any effects that may result from the CARES Act and future stimulus programs; however, the extent to which the pandemic will impact our operations and financial results during the remainder of 2020 and beyond is highly uncertain.

~~The Company~~We reported net income for the third quarter of 2020 of $79.4 million, or $.90 per diluted common share (EPS), compared to a net loss for the second quarter of 2020 of $117.1 million, or $(1.36) ~~per diluted common share (EPS).~~EPS and net income for the third quarter of 2019 of $67.8 million, or $.77 EPS. The second quarter net loss ~~reflects~~reflected a provision for credit losses of $306.9 million that ~~includes~~included both ~~an additional reserve build in response to deterioration in the macroeconomic environment from the pandemic and~~ a ~~provision related to the sale of $497 million in energy loans, discussed in more detail below. The Company reported a net loss for the first quarter 2020 of $111.0~~$160 million, or ~~$(1.28) EPS and net income~~$1.47 per share, provision for ~~the second quarter of 2019 of $88.3 million, or $1.01 EPS.~~

~~Subsequent~~credit losses related to ~~quarter end, on July 21, 2020, the Company closed on~~ the sale of $497 million of energy loans and an additional reserve build for credit losses related to ~~certain funds and accounts managed by Oaktree Capital Management, L.P.~~COVID-19. The third quarter of 2019 included $28.8 million, or $.26 per share, of merger costs associated with the September 2019 acquisition of MidSouth Bancorp, Inc. (“Midsouth”).

As noted above, second quarter 2020 results included a $160 million provision for credit loss associated with the sale ~~includes~~of $497 million of energy loans that included reserve-based ~~lending~~ (RBL), midstream and nondrilling service ~~credits.~~credits, significantly reducing our exposure in this portfolio. The ~~Company~~transaction closed on July 21, 2020 and the company received proceeds of ~~approximately~~ $257.5 million ~~in the third quarter~~ from the sale of these loans. All loans included in the transaction were re-classified as held for sale as of June 30, 2020, and charge-offs associated with the sale are reflected in the Company’s second quarter results. The portion of the provision for credit losses related to the transaction totaled $160.1 million (pre-tax), or $(1.47) per diluted share after tax (using a 21% income tax rate). The primary objective of this sale is to continue de-risking our loan portfolio by accelerating the disposition of assets that have been impacted by ongoing issues within the energy industry, and have now been further complicated by the pandemic. As a result of this transaction, both nonperforming assets and criticized loans show significant improvement at June 30, 2020, and our energy portfolio concentration was reduced from 4.4% to 1.7% of total loans, excluding PPP loans.sale.

~~The second quarter’s results reflect our continued focus on~~the current economy. Our de-risking our balance sheet in light of today’s environment. We made a strategic decision to opportunistically divest a large portion of our energy portfolio and, based on updated forecasts, we built a stronger level of reserves for what appears to be a longer and possibly deeper impact to our economies related to the pandemic. Despite those charges, our pre-provision net revenue improved linked-quarter, our capital remains solid and we expect that our actions throughstrategies implemented during the first half of 2020, ~~will provide~~which included building a ~~stronger~~strong reserve for credit losses, issuing subordinated debt, and divesting a large portion of the energy portfolio, positioned us to report solid results and strengthen our capital. Pre-provision net revenue increased, our provision for credit loss returned to a more normalized level and our capital ratios improved compared to the second quarter of 2020.

The overactive hurricane season has impacted several of our Gulf Coast markets, including Southwest and Southeast Louisiana, Coastal Mississippi, Alabama and Florida, with ~~less risk~~three significant hurricanes making landfall in the ~~balance sheet, which should~~third quarter and another in ~~turn lead~~October. After each event, we quickly mobilized portable banking units and ATMs to ~~improved returns for our shareholders.~~affected areas, and most locations reopened under generator power the following day. We ~~remain committed~~will continue to ~~helping both~~support our clients, communities and ~~associates manage through this event.~~our colleagues in these areas. While we had some damage to facilities, we do not expect significant financial impact from any of the storms, including no material provision for credit losses.

Net interest income (te) for the third quarter of 2020 was $238.4 million, a $2.7 million, or 1%, decrease from the second quarter of 2020, ~~was $241.1 million, a $6.5~~but up $11.8 million, or 3%5%, ~~increase from~~compared to the ~~first~~third quarter of ~~2020. Compared to the second quarter of 2019, net interest income (te) increased $17.5 million, or 8%.~~2019. The linked quarter ~~increase is~~decrease was primarily attributable to ~~a $2.4 billion~~declining earning asset volumes, partially from the energy loan sale, in excess of interest-bearing deposit and lower net yields. Factors impacting the lower yields included $1.5 million increase in average earning assets, of which $1.7 billion was the result of PPP loan originations and $0.6 billion was an increase in average short-term investments. The increase in interest income on earning assets was partially offset by negative impacts of a lower rate environment and a $2.5securities premium amortization, $0.5 million decrease in purchase accounting ~~accretion.~~accretion and $0.7 million increase in net nonaccrual interest reversals. Net interest income was also negatively impacted by higher long-term debt expense of $1.8 million resulting from a full quarter impact of the June 2020 issuance of subordinated debt. This decline in income was partially offset by an approximate $1.8 million impact of the additional accrual day in the quarter. The increase compared to the ~~same~~third quarter of 2019 is primarily attributable to an increase in earning asset balances, partially offset by the impact of a lower rate environment. The year-over-year increase in earning asset balances is ~~attributable~~due to PPP loans originated in the second

and third quarters of 2020, the ~~increase in short term investments mentioned above, as well as the~~MidSouth acquisition ~~of MidSouth~~that occurred late in the third quarter of ~~2019.~~2019, and an increase in securities and short-term investments resulting from the influx of deposits from PPP loans and stimulus funds.

The net interest margin for the ~~second~~third quarter of 2020 was 3.23%, ~~down 18 bps from~~flat compared to the ~~first~~second quarter of 2020. The ~~decrease is primarily due to~~impact from lower earning asset yields and a full quarter of interest expense on the ~~impact~~subordinated notes issued in June of ~~the lower rate environment on earnings assets (11 bps),~~2020 offset a reduction in excess liquidity ~~on the balance sheet in response to COVID-19 (6 bps), a $2.5 million reduction in purchase accounting accretion (4 bps)~~ and ~~a higher level~~lower cost of ~~nonaccrual interest reversals (2 bps), partially offset by the impact of the PPP loans (5 bps) originated during the quarter.~~

The decline in Prime and LIBOR rates negatively impacted the yield on loans by 52 bps as approximately 54% of our loan portfolio is variable rate, with about 90% of those tied to either LIBOR or Prime. Approximately 40% of our variable rate loans have floors, most of which have been reached. Proactive deposit pricing and changes in wholesale funding, positively impacted the net interest margin by 29 bps.

deposits. Compared to the ~~second~~third quarter of 2019, the net interest margin decreased 2218 bps, primarily driven by the lower rate environment that resulted in a 7778 bp ~~drop~~decline in the earning asset yield, partially offset by a 5560 bp ~~drop~~decline in the cost of funds.

Net interest income (te) for the ~~first six~~nine months ofended September 30, 2020 was ~~$475.7~~$714.1 million, up ~~$29.1~~$40.9 million, or 7%6%, from the ~~first six months of~~same period in 2019. The increase was largely driven by a ~~$2.8~~$2.9 billion increase in average earning assets, primarily due to the MidSouth acquisition at the end of the third quarter of 2019, as well as the ~~SBA~~funding of PPP ~~loans added during the second quarter of 2020.~~loans. The ~~increase in earning assets, coupled with a~~ lower rate environment ~~that helped drive~~and aggressive deposit pricing drove down ~~deposit and borrowing costs,~~total cost of funds, which was partially offset by the impact of lower yields on earning assets. ~~Net~~The net interest margin was ~~3.31%~~3.29% for the ~~first six~~nine months ofended September 30, 2020, down 1415 bps from ~~first six months of~~the same period in 2019.

We expect the net interest margin to remain relatively stable ~~at current levels during~~for the ~~second half~~remainder of 2020. We anticipate ~~cash inflows from~~margin headwinds in 2021 with the substantial reduction in PPP ~~loan forgiveness during~~loans expected to begin in the ~~latter part~~fourth quarter of ~~this year~~2020 and lower levels of purchase accounting accretion to be headwinds to our margin, but we expect continued decreased funding costs to offset these factors. Management remains focused on maximizing return on excess liquidity resulting from the expected cash inflows.continue through early 2021.

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

	Three Months Ended																							Three Months Ended
	June 30, 2020							March 31, 2020								June 30, 2019								September 30, 2020							June 30, 2020							September 30, 2019
(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)	$	17,931.8	$	165.3		3.71	%	$	16,109.2	$	182.5			4.56	%	$	15,081.9	$	185.3			4.93	%	$	17,607.2	$	155.6		3.52	%	$	17,931.8	$	165.3		3.71	%	$	15,126.1	$	185.5		4.87	%
Residential mortgage loans		2,923.2		28.4		3.89	%		2,969.0		29.5			3.98	%		2,969.7		30.1			4.06	%		2,807.5		27.5		3.92	%		2,923.2		28.4		3.89	%		2,978.7		30.1		4.05	%
Consumer loans		2,102.0		25.3		4.85	%		2,155.9		29.4			5.48	%		2,098.5		30.3			5.79	%		1,993.1		24.0		4.79	%		2,102.0		25.3		4.85	%		2,092.3		30.4		5.76	%
Loan fees & late charges		—		11.8		0.00	%		—		(0.6	)		0.00	%		—		(0.1	)		0.00	%		—		15.2		0.00	%		—		11.8		0.00	%		—		0.1		0.00	%
Total loans (te) (b)		22,957.0		230.8		4.04	%		21,234.1		240.8			4.56	%		20,150.1		245.6			4.89	%		22,407.8		222.3		3.95	%		22,957.0		230.8		4.04	%		20,197.1		246.1		4.84	%
Loans held for sale		90.0		0.6		2.89	%		40.3		0.6			6.17	%		27.9		0.3			4.96	%		112.2		0.8		2.96	%		90.0		0.6		2.89	%		55.3		0.6		4.26	%
US Treasury and government agency securities		127.1		0.8		2.31	%		124.7		0.8			2.37	%		126.0		0.7			2.30	%		165.6		0.8		1.99	%		127.1		0.8		2.31	%		141.6		0.8		2.33	%
Mortgage-backed securities and collateralized mortgage obligations		5,128.2		30.4		2.37	%		5,139.5		31.3			2.44	%		4,550.1		29.0			2.55	%		5,326.2		29.4		2.21	%		5,128.2		30.4		2.37	%		4,966.5		31.4		2.53	%
Municipals (te)		866.3		6.6		3.06	%		877.2		6.7			3.07	%		906.8		7.1			3.12	%		889.5		6.7		3.01	%		866.3		6.6		3.06	%		893.1		6.9		3.08	%
Other securities		8.0		0.1		4.31	%		8.0		0.1			4.29	%		3.5	0.0				3.30	%		8.0		0.1		4.33	%		8.0		0.1		4.31	%		3.5	0.0			3.61	%
Total securities (te) (c)		6,129.6		37.9		2.47	%		6,149.4		38.9			2.53	%		5,586.4		36.8			2.64	%		6,389.3		37.0		2.31	%		6,129.6		37.9		2.47	%		6,004.7		39.1		2.61	%
Total short-term investments		837.2		0.3		0.11	%		206.9		0.5			0.87	%		228.5		1.4			2.36	%		503.0		0.1		0.10	%		837.2		0.3		0.11	%		180.5		1.0		2.01	%
Total earning assets (te)	$	30,013.8	$	269.6		3.61	%	$	27,630.7	$	280.8			4.08	%	$	25,992.9	$	284.1			4.38	%	$	29,412.3	$	260.2		3.53	%	$	30,013.8	$	269.6		3.61	%	$	26,437.6	$	286.8		4.31	%
Average interest-bearing liabilities
Interest-bearing transaction and savings deposits	$	9,387.3	$	4.4		0.19	%	$	8,798.5	$	12.7			0.58	%	$	8,026.0	$	15.3			0.76	%	$	9,806.8	$	4.2		0.17	%	$	9,387.3	$	4.4		0.19	%	$	8,179.3	$	15.7		0.76	%
Time deposits		3,005.1		11.9		1.60	%		3,513.2		15.4			1.76	%		3,817.8		19.4			2.03	%		2,174.6		6.0		1.09	%		3,005.1		11.9		1.60	%		3,840.1		20.0		2.07	%
Public funds		3,320.3		6.3		0.76	%		3,252.2		10.8			1.33	%		3,194.1		15.2			1.91	%		3,196.8		4.6		0.57	%		3,320.3		6.3		0.76	%		2,979.5		13.5		1.80	%
Total interest-bearing deposits		15,712.7		22.6		0.58	%		15,563.9		38.9			1.01	%		15,037.9		49.9			1.33	%		15,178.2		14.8		0.39	%		15,712.7		22.6		0.58	%		14,998.9		49.2		1.30	%
Short-term borrowings		2,254.7		2.3		0.40	%		2,150.2		4.5			0.83	%		1,617.8		7.8			1.94	%		1,733.3		1.6		0.39	%		2,254.7		2.3		0.40	%		2,063.3		8.1		1.57	%
Long-term debt		276.9		3.6		5.19	%		231.4		2.8			4.76	%		232.3		2.8			4.86	%		386.0		5.4		5.60	%		276.9		3.6		5.19	%		234.3		2.9		4.82	%
Total borrowings		2,531.6		5.9		0.93	%		2,381.6		7.3			1.22	%		1,850.1		10.6			2.31	%		2,119.3		7.0		1.33	%		2,531.6		5.9		0.93	%		2,297.6		11.0		1.90	%
Total interest-bearing liabilities		18,244.3		28.5		0.63	%		17,945.5		46.2			1.03	%		16,888.0		60.5			1.44	%		17,297.5		21.8		0.50	%		18,244.3		28.5		0.63	%		17,296.5		60.2		1.38	%
Net interest-free funding sources		11,769.5							9,685.2								9,104.9								12,114.8		—		0.00	%		11,769.5		—		0.00	%		9,141.1		—		0.00	%
Total cost of funds	$	30,013.8	$	28.5		0.38	%	$	27,630.7	$	46.2			0.67	%	$	25,992.9	$	60.5			0.93	%	$	29,412.3	$	21.8		0.30	%	$	30,013.8	$	28.5		0.38	%	$	26,437.6	$	60.2		0.90	%
Net interest spread (te)			$	241.1		2.98	%			$	234.6			3.05	%			$	223.6			2.94	%			$	238.4		3.02	%			$	241.1		2.98	%			$	226.6		2.93	%
Net interest margin	$	30,013.8	$	241.1		3.23	%	$	27,630.7	$	234.6			3.41	%	$	25,992.9	$	223.6			3.45	%	$	29,412.3	$	238.4		3.23	%	$	30,013.8	$	241.1		3.23	%	$	26,437.6	$	226.6		3.41	%

	Nine Months Ended
	September 30, 2020							September 30, 2019
(dollars in millions)	Volume		Interest (d)		Rate				Volume		Interest (d)			Rate
Average earning assets
Commercial & real estate loans (te) (a)	$	17,217.5	$	503.5		3.91	%		$	15,090.3	$	551.3			4.88	%
Residential mortgage loans		2,899.6		85.4		3.93	%			2,963.7		91.4			4.11	%
Consumer loans		2,083.3		78.7		5.05	%			2,104.3		90.6			5.76	%
Loan fees & late charges		—		26.4		0.00	%			—		(0.9	)		0.00	%
Total loans (te) (b)		22,200.4		694.0		4.17	%			20,158.3		732.4			4.86	%
Loans held for sale		80.9		2.1		3.47	%			34.7		1.2			4.57	%
US Treasury and government agency securities		139.2		2.3		2.20	%			130.5		2.2			2.30	%
Mortgage-backed securities and collateralized mortgage obligations		5,198.4		91.1		2.34	%			4,706.7		90.3			2.56	%
Municipals (te)		877.7		20.0		3.05	%			909.8		21.4			3.13	%
Other securities		8.0		0.3		4.31	%			3.5		0.1			3.33	%
Total securities (te) (c)		6,223.3		113.7		2.44	%			5,750.5		114.0			2.64	%
Total short-term investments		515.7		0.8		0.21	%			208.3		3.4			2.20	%
Total earning assets (te)	$	29,020.3	$	810.6		3.73	%		$	26,151.8	$	851.0			4.35	%
Average interest-bearing liabilities
Interest-bearing transaction and savings deposits	$	9,332.6	$	21.4		0.31	%		$	8,096.3	$	45.6			0.75	%
Time deposits		2,895.0		33.3		1.54	%			3,800.8		57.4			2.02	%
Public funds		3,256.2		21.6		0.89	%			3,077.7		42.1			1.83	%
Total interest-bearing deposits		15,483.8		76.3		0.66	%			14,974.8		145.1			1.30	%
Short-term borrowings		2,044.9		8.4		0.55	%			1,790.1		24.1			1.93	%
Long-term debt		298.5		11.8		5.25	%			230.5		8.5			3.22	%
Total borrowings		2,343.4		20.2		1.15	%			2,020.6		32.6			2.15	%
Total interest-bearing liabilities		17,827.2		96.5		0.72	%			16,995.4		177.7			1.40	%
Net interest-free funding sources		11,193.1		—		0.00	%			9,156.4		—			0.00	%
Total cost of funds	$	29,020.3	$	96.5		0.44	%		$	26,151.8	$	177.7			0.91	%
Net interest spread (te)			$	714.1		3.01	%				$	673.3			2.95	%
Net interest margin	$	29,020.3	$	714.1		3.29	%		$	26,151.8	$	673.3			3.44	%

Six Months Ended

June 30, 2020

June 30, 2019

(dollars in millions)

Volume

Interest

Rate

Volume

Interest

Rate

Average earning assets

Commercial & real estate loans (te) (a)

$
17,020.5

$
347.9

4.11
%

$
15,072.1

$
365.8

4.89
%
Residential mortgage loans

2,946.1

57.9

3.93
%

2,956.1

61.2

4.14
%
Consumer loans

2,128.9

54.7

5.17
%

2,110.4

60.2

5.75
%
Loan fees & late charges

—

11.2

0.00
%

—

(1.0
)

0.00
%
Total loans (te) (b)

22,095.5

471.7

4.29
%

20,138.6

486.2

4.86
%
Loans held for sale

65.1

1.3

3.91
%

24.3

0.6

4.96
%
US Treasury and government agency securities

125.9

1.5

2.34
%

124.9

1.4

2.28
%
Mortgage-backed securities and collateralized mortgage obligations

5,133.8

61.7

2.40
%

4,574.6

58.9

2.58
%
Municipals (te)

871.8

13.4

3.06
%

918.3

14.5

3.14
%
Other securities

8.0

0.2

4.30
%

3.5

0.1

3.19
%
Total securities (te) (c)

6,139.5

76.8

2.50
%

5,621.3

74.9

2.66
%
Total short-term investments

522.1

0.6

0.26
%

222.4

2.5

2.28
%
Total earning assets (te)

$
28,822.2

$
550.4

3.83
%

$
26,006.6

$
564.2

4.36
%
Average interest-bearing liabilities

Interest-bearing transaction and savings deposits

$
9,092.9

$
17.1

0.38
%

$
8,054.1

$
30.0

0.75
%
Time deposits

3,259.1

27.4

1.69
%

3,780.8

37.4

1.99
%
Public funds

3,286.3

17.1

1.04
%

3,127.7

28.6

1.85
%
Total interest-bearing deposits

15,638.3

61.6

0.79
%

14,962.6

96.0

1.29
%
Short-term borrowings

2,202.4

6.7

0.61
%

1,651.2

15.9

1.93
%
Long-term debt

254.2

6.3

5.00
%

228.6

5.6

4.92
%
Total borrowings

2,456.6

13.0

1.07
%

1,879.8

21.5

2.31
%
Total interest-bearing liabilities

18,094.9

74.6

0.83
%

16,842.4

117.5

1.41
%
Net interest-free funding sources

10,727.3

9,164.2

Total cost of funds

$
28,822.2

$
74.6

0.52
%

$
26,006.6

$
117.5

0.91
%
Net interest spread (te)

$
475.8

3.00
%

$
446.7

2.96
%
Net interest margin

$
28,822.2

$
475.8

3.31
%

$
26,006.6

$
446.7

3.45
%

~~During~~For the ~~second~~third quarter of 2020, we recorded a provision for credit losses totaling ~~$306.9~~$25.0 million, compared to ~~$246.8 million in the first quarter of 2020 and $8.1~~$306.9 million in the second quarter of 2020 and $12.4 million in the third quarter of 2019. The third quarter of 2020 provision included net charge-offs of $24.0 million and a reserve build of $1.0 million. The second quarter of 2020 provision for credit losses included approximately $146.8 million related to the COVID-19 recessionary environment, with an additional $160.1 million related to the energy loan sale, comprised of charge-offs of $242.6 million and a reserve release of $82.5 million. Economic conditions related to the pandemic, coupled with the write-down of the divested energy loans to their net realizable value, led to the elevated provisions for credit losses recorded in the first and second quarters of ~~2020 include increases~~the year. As economic forecasts were relatively stable quarter over quarter and loan volumes declined, we returned to the allowance for credit losses as a result of the impact of the pandemic and widespread economic shutdown. Approximately $146.8 million of the second quarter 2020 provision for credit losses was due to the impact of updated forecasts and continued elevated charge-offs. The updated Moody’s macroeconomic forecast scenarios reflected a more ~~severe impact to our markets, which are more heavily concentrated in hospitality, retail trade, healthcare and energy. The energy loan sale resulted in additional~~normalized provision ~~for credit losses of $160.1 million in~~level during the ~~second~~third quarter of ~~2020, which included charge-offs of $242.6 million and a reserve release of $82.5 million.~~2020. For the ~~six~~nine months ended ~~June~~September 30, 2020, we recorded a total provision for credit losses of ~~$553.7~~$578.7 million, compared to ~~$26.1~~$38.6 million for the ~~six~~nine months ended ~~June~~September 30, 2019. The year-over-year increase ~~was also related~~is attributable to the impact of ~~the pandemic and~~ widespread economic ~~shutdown~~disruption and the additional provision related to the energy loan sale.

Net charge-offs in the ~~second~~third quarter of 2020 were ~~$302.7~~$24.0 million, or ~~5.30%~~0.43% of average total loans on an annualized basis, compared to ~~$43.8~~$302.7 million or ~~0.83% in the first quarter of 2020, and $7.2 million, or 0.14%~~5.30% in the second quarter of 2020, and $12.5 million, or 0.25% in the third quarter of 2019. The third quarter of 2020 included net charge-offs of $17.3 million of healthcare-dependent credits and no energy related charge-offs. Substantially all of the commercial credits charged off during the third quarter were existing problem credits that were further impacted by the pandemic. The second quarter of 2020 included $242.6 million of charge-offs on the energy loans ~~moved to held for sale~~sold as a part of our strategy to reduce our concentration in that portfolio. The remaining $60.1 million of second quarter 2020 net charge-offs ~~includes~~included $20.7 million of ~~healthcare-related~~credits in the healthcare sector and $25.9 million of ~~energy-related charge-offs. The first~~credits in the energy portfolio. Third quarter of ~~2020 included $35.9 million~~2019 reflects a more normalized level of ~~energy-related~~ net charge-offs ~~largely~~ in ~~the reserve based lending subsector.~~a benign credit environment.

The discussion of Allowance for Credit Losses and Asset Quality later in this Item provides additional information on these changes and on general credit quality.

Noninterest income totaled ~~$73.9~~$83.7 million for the third quarter of 2020, up $9.8 million, or 13%, from the second quarter of 2020 ~~down $10.4~~and up $0.5 million, or ~~12%, from the first quarter of 2020 and down $5.3 million, or 7%~~1%, compared to the ~~second~~third quarter of 2019. The ~~decrease~~linked-quarter increase in noninterest income ~~linked-quarter~~ was ~~primarily~~ attributable to ~~lower service charges~~improvements in most fee categories as ~~a result of higher average balances on deposit accounts following PPP loan fundings, stimulus payments~~the economy began to reopen and ~~a lower level of~~ consumer spending. Card fees were also negatively impacted by a lower level of spending. Almost all other categories of fees were down with the exception of secondary mortgage market fees and derivative fees. A $1.5 million gain on the sale of historic tax credits was also recorded in the first quarter of 2020.activity rebounded. The ~~decrease~~modest increase in noninterest income compared to the prior year was largely due to ~~lower levels of income in all categories with the exception of~~higher secondary mortgage market fees driven by the low rate environment and ~~derivative fees, as a result of~~benefit proceeds from bank-owned life insurance contracts, partially offset by declines in most other fee categories due to the ~~current~~ economic ~~environment.~~ slowdown stemming from the pandemic.

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

	Three Months Ended						Six Months Ended				Three Months Ended						Nine Months Ended
	June 30,		March 31,		June 30,		June 30,				September 30,		June 30,		September 30,		September 30,
(in thousands)	2020		2020		2019		2020		2019		2020		2020		2019		2020		2019
Service charges on deposit accounts	$	15,518	$	22,837	$	20,723	$	38,355	$	41,090	$	18,440	$	15,518	$	21,892	$	56,795	$	62,982
Trust fees		14,160		14,806		15,904		28,966		31,028		14,424		14,160		15,098		43,390		46,126
Bank card and ATM fees		15,957		17,362		16,619		33,319		31,909		17,222		15,957		17,154		50,541		49,063
Investment and annuity fees and insurance commissions		5,366		7,150		6,591		12,516		13,119		5,988		5,366		7,048		18,504		20,167
Secondary mortgage market operations		9,808		6,053		4,433		15,861		8,159		12,875		9,808		5,713		28,736		13,872
Income from bank-owned life insurance		3,317		4,266		4,083		7,583		7,348		6,628		3,317		4,147		14,211		11,495
Credit related fees		2,609		3,065		2,937		5,674		5,532		2,911		2,609		2,988		8,585		8,520
Income from derivatives		4,108		3,871		3,600		7,979		4,409		1,739		4,108		4,324		9,718		8,733
Other miscellaneous		3,100		4,977		4,360		8,077		7,159		3,521		3,100		4,866		11,598		12,025
Total noninterest income	$	73,943	$	84,387	$	79,250	$	158,330	$	149,753	$	83,748	$	73,943	$	83,230	$	242,078	$	232,983

Service charges are composed of overdraft and insufficient funds fees, consumer, business and corporate analysis service charges, overdraft protection fees and other customer transaction-related charges. Service charges on deposits totaled ~~$15.5~~$18.4 million for the ~~second~~third quarter of 2020, ~~down $7.3~~up $2.9 million, or ~~32%, from the first quarter of 2020 and down $5.2 million, or 25%~~19%, from the second quarter of 2020 and down $3.5 million, or 16%, from the third quarter of 2019. The increase from the second quarter was largely due to higher overdraft activity and service charge fees resulting from an increase in customer spending activity and the resumption of select fees that had been temporarily waived during the first and second quarters. The decrease from the ~~prior~~third quarter ~~as well as the same quarter last year,~~of 2019 was ~~largely~~ due to ~~lower overdraft activity and service-charge fees resulting from~~ higher customer account balances ~~due to economic stimulus, supplemental unemployment payments and~~that resulted from PPP loan proceeds ~~as well as lower~~and stimulus payments, and decreased consumer spending due to ~~quarantine restrictions and, to a lesser extent, a broadened policy for fee waivers.~~the economic environment.

Trust fees ~~decreased $0.6~~increased $0.3 million, or 4%2%, linked quarter and decreased ~~$1.7~~$0.7 million, or ~~11%~~4%, from the same quarter a year ago. The modest increase compared to the prior quarter is primarily due to the rebound of the market. The decrease compared ~~to both periods~~the prior year was largely due to the downturn in the market beginning at the end of the first quarter of 2020 and continuing through much of the second quarter of 2020, impacting assets under management and related trust fees. The estimated fair value of trust assets under management as of September 30, 2020 was $9.0 billion, compared to $8.8 billion at June 30, 2020, ~~was $8.8 billion, compared to $8.3~~and $9.3 billion at ~~March 31, 2020, and $9.4 billion at June~~September 30, 2019.

Bank card and ATM fees include interchange and other income from credit and debit card transactions, fees earned from processing card transactions for merchants, and fees earned from ATM transactions. Bank card and ATM fees totaled ~~$16.0~~$17.2 million for the third quarter of 2020, up $1.3 million, or 8%, from the second quarter of 2020 ~~down $1.4~~and up less than $0.1 million ~~or 8%, from the first quarter of 2020 and down $0.7 million, or 4%,~~ from the same quarter last year. ~~Economic uncertainty caused by~~The increase from the ~~pandemic has resulted in an overall decrease in~~prior quarter is due to higher levels of card activity as consumer spending ~~and transaction volume, which has negatively impacted income in this category.~~activity increased.

Investment and annuity fees and insurance commissions ~~decreased $1.8~~increased $0.6 million, or ~~25%~~12%, compared to ~~first~~second quarter 2020 ~~primarily due~~and were down $1.1 million, or 15%, compared to ~~decreases across most product lines due to both~~the same quarter a ~~disruption in the financial centers and a drop in the values of underlying portfolio holdings as a result of pandemic-related market volatility.~~year ago. Investment and annuity fees and insurance commissions ~~decreased $1.2 million, or 19%, compared to second quarter 2019 largely due to the same reasons as the drop~~were up from the prior quarter ~~however~~primarily due to an increase in investment and annuity transaction-based fees as a result of the phased

re-opening of the financial centers during the third quarter of 2020 and an increase in insurance commissions, partially offset by a $0.2 million decrease in corporate underwriting fees. The decrease from the same quarter last year was due to decreases in transaction-based fees ~~were up $0.2 million.~~due to the continued economic impact of the pandemic, lower insurance commissions, and a $0.3 million decrease in corporate underwriting fees.

Income from secondary mortgage market operations is comprised of income produced from the origination and sales of residential mortgage loans in the secondary market. Income from secondary mortgage market operations was ~~$9.8~~$12.9 million in the third quarter of 2020, up $3.1 million, or 31%, from the second quarter of 2020 and up ~~$3.8~~$7.2 million, or ~~62%~~125%, from the ~~first quarter of 2020 and up $5.4 million, or 121%, from the second~~third quarter of 2019. Origination volume during the ~~second~~third quarter of 2020, particularly when compared to the ~~second~~third quarter of 2019, was positively impacted by the ~~lower~~low rate ~~environment.~~environment, resulting in a surge in both refinancing and purchase production. Mortgage production for the third quarter of 2020 was up 31% compared to the second quarter of 2020 ~~was~~and up ~~67%~~57% compared to the ~~first quarter of 2020 and up 76% compared to the second~~third quarter of 2019. Secondary mortgage market operations income will vary based on origination volume and the timing of subsequent sales. To the extent low interest rate trends persist, mortgage loan production may remain elevated in the near ~~term.~~term, but is not expected to be at the level experienced in third quarter of 2020.

Income from bank-owned life insurance is generated through insurance benefit proceeds as well as the growth of the cash surrender value of insurance contracts held. Income from bank-owned life insurance was $6.6 million in the third quarter of 2020, up $3.3 million, or 100%, from the second quarter of 2020 and up $2.5 million, or 60%, from the third quarter of 2019. The linked-quarter increase is attributable to benefit proceeds of $3.4 million recorded in the third quarter of 2020, compared to none in the second quarter of 2020, ~~down $0.9~~and $0.5 million ~~or 22%, from~~in the ~~first quarter of 2020 and down $0.8 million, or 19%, from the second~~third quarter of 2019. ~~The linked-quarter decrease~~A similar level of benefits proceeds is ~~attributable to the fact that there were no benefit proceeds recorded~~not expected in the ~~second~~fourth quarter of ~~2020, compared to $0.8 million in the first quarter of 2020 and $0.6 million in the second quarter of 2019.~~2020.

Credit related fees include unused commitment fees and letter of credit fees. Credit related fees were ~~$2.6~~$2.9 million for the ~~second~~third quarter of 2020, ~~down $0.5 million, or 15%, from the first quarter of 2020 and down~~up $0.3 million, or ~~11%~~12%, from the second quarter of 2020 and down $0.1 million, or 3%, from the third quarter of 2019. The linked quarter ~~decrease~~increase was due to ~~both lower~~higher unused commitment fees and letter of credit ~~fees, with the~~fees. The decrease over the same quarter last year is primarily due to lower unused commitment fees, aspartially offset by higher letter of credit fees. During the second quarter of 2020, customers drew on their lines as a source of liquidity as a cautionary measure in response to the pandemic. They began to pay down the lines during the third quarter of 2020, resulting in higher unused commitment fees compared to the prior quarter, but lower compared to the same quarter a year ago.

Income from our customer interest rate derivative program totaled $1.7 million for the third quarter of 2020 compared to $4.1 million ~~for~~in the second quarter of 2020 ~~compared to $3.9 million in the first quarter of 2020~~ and ~~$3.6~~$4.3 million for the ~~second~~third quarter of 2019. ~~Increased derivative income~~The decrease compared to both the previous quarter and the third quarter of 2019 reflects ~~higher~~a decline in customer demand for interest rate swap arrangements, resulting in a lower transaction volume, due in part to ~~customer demand given~~ the ~~lower interest rates in the second quarter of 2020.~~sustained low rate environment. Derivative income can be volatile and is dependent upon the composition of the portfolio, ~~customer~~volume and mix of sales activity and market value adjustments due to market interest rate movement.

Other miscellaneous income was ~~$3.1~~$3.5 million in the ~~second~~third quarter of 2020, ~~down $1.9~~up $0.4 million compared to the ~~first~~second quarter of 2020 and down $1.3 million compared to the ~~second~~third quarter of 2019. The ~~decrease~~increase compared to the prior quarter was largely due to ~~a $1.5~~$0.4 million of net gain on ~~the sale~~sales of ~~historic tax credits in the prior quarter as well as a decrease of $0.5~~securities, $0.4 million in ~~income from investments in small business investment companies, partially offset by a $0.1 million~~gains on sales of assets, primarily leases, and an increase ~~in syndication fees. The decrease compared to the second quarter~~ of ~~2019 includes a decrease of $1.4~~$0.3 million in income from investments in small business investment companies, partially offset by a $0.2 million ~~increase~~decrease in syndication ~~fees.~~fees and a $0.2 million decrease in FHLB stock dividends. The decrease compared to the third quarter of 2019 includes a decrease of $1.0 million in income from investments in small business investment companies, a $0.6 million decrease in syndication fees, and a $0.2 million decrease in FHLB stock dividends, partially offset by the $0.4 million net gain on the sales of securities and the $0.3 million gain on sales of assets, primarily leases.

Noninterest income for the first ~~six~~nine months of 2020 totaled ~~$158.3~~$242.1 million, up ~~$8.6~~$9.1 million, or 6%4% from the first ~~six~~nine months of 2019. The impact of the lower rate environment drove a surge in activity in our secondary mortgage market operations with fees up ~~$7.7~~$14.9 million, or ~~94%~~107%, compared to the same period in 2019. Income on bank-owned life insurance was up $2.7 million, or 24%, as ~~well as an increase in derivative activity, with fees up $3.6 million, or 81%. Also included~~mortality benefits received in the first ~~six~~nine months of 2020 ~~was a $1.5 million gain on~~exceeded the ~~sale~~first nine months of ~~historic tax credits.~~2019 by $2.9 million. Card fees were up ~~$1.4~~$1.5 million, or 4%3%, due largely to increased activity as a result of the acquisition of MidSouth in the third quarter of ~~2019.~~2019, partially offset by lower levels of activity during 2020 as a result of the pandemic. Derivative fees were up $1.0 million, or 11%, with higher activity during the first half of 2020. The first nine months of 2020 also includes a $1.5 million gain on the sale of historic tax credits. These increases were partially offset by lower service charges, down ~~$2.7~~$6.2 million, and trust fees, down ~~$2.1 million.~~ $2.7 million, related to the impact of COVID-19 on economic conditions.

Noninterest expense for the third quarter of 2020 was $195.8 million, down $0.8 million, or less than 1%, from the second quarter of 2020, ~~was $196.5 million,~~and down ~~$6.8~~$17.8 million, or 3%8%, from the ~~first quarter of 2020, and up $13.0 million, or 7%, from the second~~third quarter of 2019. The linked quarter decrease is largely due to ~~write downs~~a focus on expense control with offsetting nonrecurring items leading to a slightly lower level of ~~$9.8 million of equity interests recorded~~expense, discussed in ~~the first quarter of 2020.~~more detail below. The ~~increase~~decrease over the same quarter ~~of 2019~~last year is ~~largely~~primarily due to merger costs of $28.8 million associated with the acquisition and operational

integration of MidSouth incurred in the third quarter of 2019. Excluding the nonoperating merger costs, noninterest expense was up $11.0 million, or 6%, reflecting an increase in personnel costs related to annual merit raises as well as ~~the acquisition of~~increased costs from MidSouth ~~and~~operations, additional costs incurred in response to the ~~pandemic.~~ pandemic, and an increase in professional services expense largely related to PPP consulting.

The components of noninterest expense for the periods indicated are presented in the following tables.

	Three Months Ended									Six Months Ended						Three Months Ended									Nine Months Ended
	June 30,			March 31,			June 30,			June 30,						September 30,			June 30,			September 30,			September 30,
(in thousands)	2020			2020			2019			2020			2019			2020			2020			2019			2020			2019
Compensation expense	$	98,756		$	91,071		$	87,747		$	189,827		$	171,715		$	97,095		$	98,756		$	93,858		$	286,922		$	265,573
Employee benefits		21,653			22,478			18,888			44,131			38,618			20,761			21,653			18,622			64,892			57,240
Personnel expense		120,409			113,549			106,635			233,958			210,333			117,856			120,409			112,480			351,814			322,813
Net occupancy expense		13,559			12,522			12,961			26,081			24,945			13,191			13,559			13,156			39,272			38,101
Equipment expense		4,752			4,617			4,342			9,369			9,021			5,355			4,752			4,685			14,724			13,706
Data processing expense		21,250			22,047			20,088			43,297			39,419			21,888			21,250			21,532			65,185			60,951
Professional services expense		10,985			9,741			9,665			20,726			17,833			14,372			10,985			17,704			35,098			35,537
Amortization of intangible assets		5,169			5,345			5,047			10,514			10,185			4,788			5,169			4,889			15,302			15,074
Deposit insurance and regulatory fees		5,116			5,815			4,755			10,931			10,161			4,108			5,116			3,995			15,039			14,156
Other real estate and foreclosed asset (income) expense		(460	)		10,130			395			9,670			(596	)		(482	)		(460	)		2,055			9,188			1,459
Advertising		2,696			4,234			3,253			6,930			6,333			3,159			2,696			5,435			10,089			11,768
Corporate value and franchise taxes		4,481			4,296			4,215			8,777			8,257			4,872			4,481			4,109			13,649			12,366
Telecommunications and postage		3,374			4,065			3,363			7,440			6,829			4,043			3,374			3,610			11,483			10,439
Entertainment and contributions		3,384			2,447			2,742			5,831			5,450			1,315			3,384			2,765			7,146			8,215
Travel expense		396			1,111			1,344			1,507			2,442			309			396			1,172			1,816			3,614
Printing and supplies		1,627			1,108			1,092			2,735			2,261			1,271			1,627			1,459			4,006			3,720
Tax credit investment amortization		961			961			1,234			1,921			2,372			961			961			1,286			2,882			3,658
Other retirement expense		(6,337	)		(6,122	)		(4,152	)		(12,459	)		(8,257	)		(6,337	)		(6,337	)		(4,152	)		(18,796	)		(12,409	)
Other miscellaneous		5,177			7,469			6,588			12,646			12,279			5,105			5,177			17,374			17,751			29,653
Total noninterest expense	$	196,539		$	203,335		$	183,567		$	399,874		$	359,267		$	195,774		$	196,539		$	213,554		$	595,648		$	572,821

Personnel expense consists of salaries, incentive compensation, long-term incentives, payroll taxes, and other employee benefits such as 401(k), pension, and medical, life and disability insurance. Personnel expense totaled ~~$120.4~~$117.9 million for the ~~second~~third quarter of 2020, ~~up $6.9~~down $2.6 million, or 6%2%, compared to the prior quarter and up $5.4 million, or 5%, compared to the same quarter last year. The decrease from prior quarter was primarily due to lower bonus, incentive, and payroll tax expense; partially offset by severance accruals related to the closure of two trust offices in New York and New Jersey, twelve branches in Louisiana and Mississippi scheduled for closure in late October 2020, and other associate reductions. The increase over the same quarter last year is primarily due to ~~higher~~ compensation expense related to annual merit increases, overtime related to an increase in the volume of mortgage origination and implementation of the PPP, ~~and~~ other support costs in response to the ~~pandemic. Incentive compensation increased $2.5~~pandemic, the impact of adding MidSouth operations, and the severance accruals mentioned above. These increases are partially offset by merger-related expenses of $5.0 million ~~from~~in the ~~prior quarter, primarily related to the increase in mortgage production. Compared to the second~~third quarter of ~~2019, personnel costs were up $13.8 million, or 13%, primarily related to annual merit increases, and the acquisition of MidSouth.~~2019.

Occupancy and equipment expenses are primarily composed of lease expenses, depreciation, maintenance and repairs, rent, taxes, and other ~~expenses related to~~ equipment ~~used by the Company.~~expenses. Occupancy and equipment expenses totaled ~~$18.3~~$18.5 million in the third quarter of 2020, up $0.2 million, or 1%, from the second quarter of 2020 and up ~~$1.2~~$0.7 million, or 7%4%, from the ~~first quarter of 2020 and up $1.0 million, or 6%, from the second~~third quarter of 2019. The linked-quarter increase was largely due to ~~additional cleaning expenses and the installation of additional safety measures~~an increase in equipment expense, partially offset by a decrease in occupancy expense related to ~~the pandemic, as well as annual~~ insurance payments ~~made during~~in the second quarter of 2020. The increase ~~compared to~~from the ~~second~~same quarter last year is primarily related increased equipment expense and additional cost from the MidSouth operations. The third quarter of 2019 ~~is largely attributable to locations added~~included $0.9 million in ~~the MidSouth acquisition, as well as additional pandemic related costs, and equipment maintenance, partially offset by lower expenses associated with building maintenance and utilities.~~ merger-related expenses.

Data processing expense includes expenses related to third party technology processing and servicing costs, technology project costs and fees associated with ~~bankcard~~bank card and ATM transactions. Data processing expense was ~~$21.3~~$21.9 million for the ~~second~~third quarter of 2020, ~~down $0.8~~up $0.6 million, or ~~4%, to the first quarter of 2020, and up $1.2 million, or 6%~~3%, compared to the second quarter of 2020, and up $0.4 million, or 2%, compared to the third quarter of 2019. ~~Data processing expense was down from~~The increase over the ~~first~~second quarter of 2020 is due to ~~lower~~a higher level of ATM and card ~~activity.~~activity, reflecting the partial resumption of economic activities as many areas in our market began or continued phased reopening programs. The increase from the ~~second~~third quarter of 2019 ~~was~~is primarily due to ~~investments in new technology, as well as expenses from increased~~a higher level of ATM and card activity as a result of the acquisition of MidSouth. The third quarter of 2019 included $0.4 million of merger-related expenses.

Professional services expense for the ~~second~~third quarter of 2020 totaled ~~$11.0~~$14.4 million, up ~~$1.2~~$3.4 million, or ~~13%~~31%, compared to the previous quarter and ~~$1.3~~down $3.3 million, or ~~14%~~19%, from the ~~second~~third quarter of 2019. The increase over the ~~first~~second quarter of 2020 ~~and the second quarter of 2019~~ is primarily attributable to higher consulting fees ~~including support~~ related to PPP support and legal fees. The third quarter of 2019 included $7.5 million of merger-related expenses. Excluding merger-related cost, professional fees increased $4.2 million compared to the same quarter last year, also largely due to the increase in consulting fees related to PPP support and legal fees.

Deposit insurance and regulatory fees totaled ~~$5.1~~$4.1 million, down ~~$0.7~~$1.0 million, or ~~12%~~20%, from the ~~first~~second quarter of 2020 and up ~~$0.4~~$0.1 million, or 8%3%, from the ~~second~~third quarter of 2019. The decrease from the prior quarter is largely due to ~~the favorable impact of~~a lower risk-based assessment rate resulting from an improved liquidity position inand the ~~risk based assessment, due in part to favorable treatment~~sale of ~~PPP~~energy loans. The increase compared to 2019 is primarily due to higher assessment base and rates, largely driven by the MidSouth acquisition.

Corporate value and franchise tax expense for the ~~second~~third quarter of 2020 totaled ~~$4.5~~$4.9 million, up ~~$0.2~~modestly by $0.4 million, or 4%9%, compared to the prior quarter and ~~$0.3~~up $0.8 million, or 6%19%, compared to the same quarter last year. The increase from ~~both~~ the ~~prior quarter and the first~~

third quarter of 2019 is primarily attributable to the impact the acquisition of ~~MidSouth had on our operations and the corresponding effect on our corporate value and franchise tax calculations.~~MidSouth.

Business development-related expenses (including advertising, travel, entertainment and contributions) were ~~$6.5~~$4.8 million for the third quarter of 2020, down $1.7 million, or 26%, from the second quarter of 2020 ~~down $1.3~~and $4.6 million, or ~~17%~~49%, from the ~~first quarter of 2020 and $0.9 million, or 12%, from the second~~third quarter of 2019. The linked-quarter decrease was largely due to a ~~$1.5 million decrease in advertising and a reduction in travel as a result of the pandemic, partially offset by a~~ $2.5 million contribution made in the second quarter of 2020 as an investment in Gulf South communities to ~~help~~assist with the effects of the pandemic. The year over year decrease was largely due to a decrease in ~~travel~~advertising as ~~a result~~the third quarter of 2019 included $2.6 million of merger-related expenses for the ~~pandemic~~acquisition of MidSouth, and a decrease in ~~advertising.~~business travel in response to the pandemic.

Other real estate and foreclosed asset ~~income of $0.5 million~~(income) reflects gains in excess of ~~losses~~expense of $0.5 million for the both the third and second quarter of 2020 ~~compared to~~and net expense of ~~$10.1~~$2.1 million in the ~~first quarter of 2020 and expense of $0.4 million in the second~~third quarter of 2019. ~~First~~The expense in third quarter of ~~2020 expense included a~~2019 was largely due to the non-cash write-down ~~totaling $9.8 million~~ of ~~equity interests in two energy-related companies received in borrower bankruptcy restructurings.~~foreclosed asset, partially offset by gains on sales of a former corporate facility.

All other expenses, excluding amortization of intangibles, totaled ~~$4.8~~$5.0 million for the third quarter of 2020, an increase of $0.2 million, or 5%, from the second quarter of 2020 and a decrease of ~~$2.7~~$14.5 million, or ~~36%~~74%, from the ~~first quarter of 2020 and down $3.3 million, or 41% from the second~~third quarter of 2019. The linked-quarter ~~decrease~~increase was primarily due to ~~branch write downs of $1.2 million in the first quarter of 2020 and lower~~higher telephone and postage expense. ~~Year over~~The third quarter of 2019 included $12.3 million in expenses related to the acquisition of MidSouth. The decrease compared to the same quarter last year ~~decrease was due to~~also reflects lower other retirement expense in the third quarter of 2020 due to the performance of pension plan ~~assets, lower printing and supplies expense and lower miscellaneous expense.~~assets.

Total noninterest expense totaled ~~$399.9~~$595.6 million for the first ~~six~~nine months of 2020, up ~~$40.6~~$22.8 million, or ~~11%~~4%, from the same period last year. The first nine months of 2019 included $28.8 million in nonoperating expenses related to acquisition of MidSouth. Personnel expense was up ~~$23.6~~$29.0 million, or ~~11%~~9%, related to the MidSouth acquisition, merit-based compensation increases and other costs

associated with ~~the~~ pandemic response, including the implementation of the Paycheck Protection Program. Other real estate expense ~~is up $10.3~~increased $7.7 million, ~~with a~~primarily attributable to $9.8 million ~~write-down~~in write-downs of equity ~~interest~~interests in two energy related ~~companies during~~borrowers recorded in the first quarter of 2020. Data processing was up ~~$3.9~~$4.2 million, or 7%, with an increase in ATM and card fee activity ~~with~~following the acquisition of MidSouth, as well as an increase in ~~software amortization. Professional services expense was up $2.9 million, or 16%.~~outside processing charges. These increases were partially offset by a ~~$4.2~~$6.4 million, or 51%, decrease in other retirement expense with better performance from pension plan assets.

The effective income tax rate for the ~~second~~third quarter of 2020 was approximately ~~38.9%,~~19.2% compared to ~~17.5% in the first quarter of 2020 and 17.9%~~38.9% in the second quarter of 2020 and 15.5% in the third quarter of 2019. The decrease in the third quarter 2020 effective tax rate was largely due to an improved projected annual pre-tax income forecast as compared to the prior quarter. Many factors impact the effective tax rate including, but not limited to, the level of pre-tax income and the relative impact of net tax benefits related to tax credit investments, tax-exempt interest, bank-owned life insurance, and nondeductible expenses. The increase in the second quarter 2020 effective tax rate was largely attributable to the sizable pre-tax loss incurred year-to-date, which caused a significant decrease in our projected annual pre-tax income as compared to the prior quarter.

Additionally, the effective tax rate could be impacted by discrete items that may occur in any given period, such as tax benefits from share-based compensation and changes in valuation allowances that are recognized as a separate component from continuing operations in the interim period the items impact. The effect of a change in tax laws or rates on existing deferred tax assets and liabilities are also recognized as a discrete item in the interim period that includes the enactment date of the change. As such, we recognized a discrete benefit of $7.1 million in the first quarter of 2020 related to our intent to carryback a net operating loss attribute that we inherited from an acquired entity to a 35% statutory tax rate year (provided for under the CARES Act).

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 we serve and are directed at tax credits issued under the Federal and State New Market Tax Credit (“NMTC”) programs, Low-Income Housing Tax Credit (“LIHTC”) programs, as well as pre-2018 Qualified Zone Academy Bonds (“QZAB”) and Qualified School Construction Bonds (“QSCB”). These investments generate tax credits, which reduce current and future taxes and are recognized when earned as a benefit in the provision for income taxes.

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. Our LIHTC investments to date are through variable interest entities for which the Company is not the primary beneficiary and, therefore, are not consolidated. LIHTC credits from the affordable housing projects are recognized over a ten-year period, beginning with the year the rental activity begins, as a reduction of the provision for income taxes.

Based on tax credit investments that have been made to date in 2020, we expect to realize benefits from federal and state tax credits over the next three years totaling $7.8 million, $8.6 million and $8.5 million for 2021, 2022, and 2023, 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 Company expects the effective tax rate for the fourth quarter of 2020 to be lower than the third quarter 2020 effective tax rate of 19.2% as tax strategies are evaluated and implemented prior to year-end.

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

	Three Months Ended								Six Months Ended					Three Months Ended							Nine Months Ended
	June 30,			March 31,			June 30,		June 30,					September 30,		June 30,			September 30,		September 30,
	2020			2020			2019		2020			2019		2020		2020			2019		2020			2019
Common Share Data
Earnings per share:
Basic	$	(1.36	)	$	(1.28	)	$	1.01	$	(2.64	)	$	1.92	$	0.90	$	(1.36	)	$	0.77	$	(1.73	)	$	2.69
Diluted	$	(1.36	)	$	(1.28	)	$	1.01	$	(2.64	)	$	1.92	$	0.90	$	(1.36	)	$	0.77	$	(1.73	)	$	2.69
Cash dividends paid	$	0.27		$	0.27		$	0.27	$	0.54		$	0.54	$	0.27	$	0.27		$	0.27	$	0.81		$	0.81
Book value per share (period-end)	$	38.41		$	39.65		$	38.70	$	38.41		$	38.70	$	39.07	$	38.41		$	39.49	$	39.07		$	39.49
Tangible book value per share (period-end)	$	27.38		$	28.56		$	28.46	$	27.38		$	28.46	$	28.11	$	27.38		$	28.73	$	28.11		$	28.73
Weighted average number of shares (000s):
Basic		86,301			87,186			85,728		86,744			85,708		86,358		86,301			86,377		86,614			85,934
Diluted		86,301			87,186			85,835		86,744			85,810		86,400		86,301			86,462		86,614			86,010
Period-end number of shares (000s)		86,342			86,275			85,759		86,342			85,759		86,400		86,342			90,822		86,400			90,822

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

June 30,

2020

2020

2019

2020

2019

Performance Ratios

Return on average assets

(1.42
)%

(1.46
)%

1.24
%

(1.44
)%

1.18
%
Return on average common equity

(13.59
)%

(12.72
)%

10.96
%

(13.15
)%

10.64
%
Return on average tangible common equity

(18.75
)%

(17.51
)%

15.07
%

(18.13
)%

14.73
%
Earning asset yield (te)

3.61
%

4.08
%

4.38
%

3.83
%

4.36
%
Total cost of funds

0.38
%

0.67
%

0.93
%

0.52
%

0.91
%
Net Interest Margin (te)

3.23
%

3.41
%

3.45
%

3.31
%

3.45
%
Noninterest income to total revenue (te)

23.74
%

26.45
%

26.17
%

24.97
%

25.11
%
Efficiency ratio (b)

60.74
%

62.06
%

58.95
%

61.41
%

58.53
%
Average loan/deposit ratio

85.97
%

87.28
%

87.09
%

86.60
%

87.08
%
FTE employees (period-end)

4,196

4,148

3,930

4,196

3,930

Capital Ratios

Common stockholders' equity to total assets

9.98
%

10.77
%

11.54
%

9.98
%

11.54
%
Tangible common equity ratio (c)

7.33
%

8.00
%

8.75
%

7.33
%

8.75
%

		Three Months Ended							Nine Months Ended
		September 30,		June 30,			September 30,		September 30
(in thousands)		2020		2020			2019		2020			2019
Income Statement:
Interest income		$	257,043	$	266,342		$	283,164	$	800,728		$	839,825
Interest income (te) (a)			260,232		269,590			286,816		810,613			851,019
Interest expense			21,860		28,476			60,225		96,491			177,764
Net interest income (te)			238,372		241,114			226,591		714,122			673,255
Provision for credit losses			24,999		306,898			12,421		578,690			38,552
Noninterest income			83,748		73,943			83,230		242,078			232,983
Noninterest expense (excluding amortization of intangibles)			190,986		191,370			208,665		580,346			557,747
Amortization of intangibles			4,788		5,169			4,889		15,302			15,074
Income before income taxes			98,158		(191,628	)		80,194		(228,023	)		283,671
Income tax expense (benefit)			18,802		(74,556	)		12,387		(79,274	)		48,423
Net income (loss)		$	79,356	$	(117,072	)	$	67,807	$	(148,749	)	$	235,248
For informational purposes - included above, pre-tax
Provision for credit loss associated with energy loan sale		$	—	$	160,101		$	—	$	160,101		$	—
Nonoperating merger-related expenses	.		—		—			28,810		—			28,810

	Three Months Ended									Six Months Ended						Three Months Ended									Nine Months Ended
	June 30,			March 31,			June 30,			June 30,						September 30,			June 30,			September 30,			September 30,
($ in thousands)	2020			2020			2019			2020			2019			2020			2020			2019			2020			2019
Asset Quality Information
Nonaccrual loans (a) (b)	$	183,979		$	254,058		$	209,831		$	183,979		$	209,831		$	171,462		$	183,979		$	222,860		$	171,462		$	222,860
Restructured loans - still accruing		9,848			34,251			101,250			9,848			101,250			9,115			9,848			60,897			9,115			60,897
Total nonperforming loans		193,827			288,309			311,081			193,827			311,081			180,577			193,827			283,757			180,577			283,757
ORE and foreclosed assets		18,724			18,460			27,520			18,724			27,520			11,640			18,724			30,955			11,640			30,955
Total nonperforming assets	$	212,551		$	306,769		$	338,601		$	212,551		$	338,601		$	192,217		$	212,551		$	314,712		$	192,217		$	314,712
Accruing loans 90 days past due (c)	$	5,230		$	17,790		$	6,493		$	5,230		$	6,493		$	10,439		$	5,230		$	7,872		$	10,439		$	7,872
Net charge-offs		302,684			43,764			7,151			346,448			25,020			24,008			302,684			12,474			370,456			37,494
Allowance for loan losses		442,638			426,003			195,625			442,638			195,625		$	448,674		$	442,638		$	195,572		$	448,674		$	195,572
Reserve for unfunded lending commitments		36,571			48,992			—			36,571			—			31,526			36,571			—			31,526			—
Allowance for credit losses		479,209			474,995			195,625			479,209			195,625		$	480,200		$	479,209		$	195,572		$	480,200		$	195,572
Total provision for credit losses		306,898			246,793			8,088			553,691			26,131		$	24,999		$	306,898		$	12,421		$	578,690		$	38,552
Ratios:
Nonperforming assets to loans, ORE and foreclosed assets		0.94	%		1.42	%		1.68	%		0.94	%		1.68	%		0.86	%		0.94	%		1.49	%		0.86	%		1.49	%
Accruing loans 90 days past due to loans		0.02	%		0.08	%		0.03	%		0.02	%		0.03	%		0.05	%		0.02	%		0.04	%		0.05	%		0.04	%
Nonperforming assets + accruing loans 90 days past due to loans, ORE and foreclosed assets		0.96	%		1.51	%		1.71	%		0.96	%		1.71	%		0.91	%		0.96	%		1.53	%		0.91	%		1.53	%
Net charge-offs to average loans		5.30	%		0.83	%		0.14	%		3.15	%		0.25	%		0.43	%		5.30	%		0.25	%		2.23	%		0.25	%
Allowance for loan losses to period-end loans		1.96	%		1.98	%		0.97	%		1.96	%		0.97	%		2.02	%		1.96	%		0.93	%		2.02	%		0.93	%
Allowance for credit losses to period-end loans		2.12	%		2.21	%		0.97	%		2.12	%		0.97	%		2.16	%		2.12	%		0.93	%		2.16	%		0.93	%
Allowance for loan losses to nonperforming loans + accruing loans 90 days past due		222.37	%		139.17	%		61.60	%		222.37	%		61.60	%		234.89	%		222.37	%		67.06	%		234.89	%		67.06	%
For informational purposes - included above
Provision for credit loss associated with energy loan sale	$	160,101			—			—		$	160,101			—		$	—		$	160,101		$	—		$	160,101		$	—
Charge-offs associated with energy loan sale		242,628			—			—			242,628			—			—			242,628			—			242,628			—

June 30,

March 31,

December 31,

September 30,

June 30,

(in thousands)

2020

2020

2019

2019

2019

Period-End Balance Sheet

Total loans

$
22,628,377

$
21,515,681

$
21,212,755

$
21,035,952

$
20,175,812

Loans held for sale

364,416

67,587

55,864

75,789

36,150

Securities

6,381,803

6,374,490

6,243,313

6,404,719

5,725,735

Short-term investments

760,194

876,314

110,229

49,513

151,062

Earning assets

30,134,790

28,834,072

27,622,161

27,565,973

26,088,759

Allowance for loan losses

(442,638
)

(426,003
)

(191,251
)

(195,572
)

(195,625
)
Goodwill and other intangible assets

951,746

956,916

962,260

977,369

878,051

Other assets

2,571,502

2,396,708

2,207,587

2,195,779

1,990,678

Total assets

$
33,215,400

$
31,761,693

$
30,600,757

$
30,543,549

$
28,761,863

Noninterest-bearing deposits

$
11,759,085

$
9,204,631

$
8,775,632

$
8,686,383

$
8,114,632

Interest-bearing transaction and savings
deposits

9,605,254

8,931,192

8,845,097

8,758,993

8,034,801

Interest-bearing public fund deposits

3,326,033

3,251,445

3,364,416

2,954,966

3,159,790

Time deposits

2,631,896

3,621,228

2,818,430

3,800,957

3,926,819

Total interest-bearing deposits

15,563,183

15,803,865

15,027,943

15,514,916

15,121,410

Total deposits

27,322,268

25,008,496

23,803,575

24,201,299

23,236,042

Short-term borrowings

1,754,875

2,673,283

2,714,872

2,108,815

1,641,598

Long-term debt

386,269

225,606

233,462

246,641

232,754

Other liabilities

435,831

433,244

381,163

400,414

332,554

Stockholders' equity

3,316,157

3,421,064

3,467,685

3,586,380

3,318,915

Total liabilities & stockholders' equity

$
33,215,400

$
31,761,693

$
30,600,757

$
30,543,549

$
28,761,863

For informational purposes only - included above

SBA Paycheck Protection Program (PPP) loans

$
2,286,963

—

—

—

—

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

June 30,

(in thousands)

2020

2020

2019

2020

2019

Average Balance Sheet

Total loans

$
22,957,032

$
21,234,016

$
20,150,104

$
22,095,524

$
20,138,590

Loans held for sale

89,935

40,318

27,873

65,126

24,266

Securities (a)

6,129,616

6,149,432

5,586,390

6,139,524

5,621,345

Short-term investments

837,246

206,886

228,527

522,066

222,394

Earning assets

30,013,829

27,630,652

25,992,894

28,822,240

26,006,595

Allowance for loan losses

(425,844
)

(241,364
)

(195,238
)

(333,604
)

(195,808
)
Goodwill and other intangible assets

954,252

959,500

880,497

956,876

882,926

Other assets

2,594,469

2,314,813

1,859,657

2,454,642

1,801,204

Total assets

$
33,136,706

$
30,663,601

$
28,537,810

$
31,900,154

$
28,494,917

Noninterest-bearing deposits

$
10,989,921

$
8,763,359

$
8,099,621

$
9,876,640

$
8,163,306

Interest-bearing transaction and savings deposits

9,387,292

8,798,483

8,026,012

9,092,887

8,054,141

Interest-bearing public fund deposits

3,320,338

3,252,233

3,194,113

3,286,286

3,127,708

Time deposits

3,005,071

3,513,167

3,817,817

3,259,119

3,780,761

Total interest-bearing deposits

15,712,701

15,563,883

15,037,942

15,638,292

14,962,610

Total deposits

26,702,622

24,327,242

23,137,563

25,514,932

23,125,916

Short-term borrowings

2,254,731

2,150,164

1,617,776

2,202,447

1,651,155

Long-term debt

276,891

231,438

232,277

254,165

228,642

Other liabilities

436,845

445,030

319,691

440,938

314,616

Stockholders' equity

3,465,617

3,509,727

3,230,503

3,487,672

3,174,588

Total liabilities & stockholders' equity

$
33,136,706

$
30,663,601

$
28,537,810

$
31,900,154

$
28,494,917

For informational purposes only - included above

SBA Paycheck Protection Program (PPP) loans

$
1,727,797

—

—

$
863,898

—

	September 30,			June 30,			March 31,			December 31,			September 30,
(in thousands)	2020			2020			2020			2019			2019
Period-End Balance Sheet
Total loans	$	22,240,204		$	22,628,377		$	21,515,681		$	21,212,755		$	21,035,952
Loans held for sale		103,566			364,416			67,587			55,864			75,789
Securities		7,056,276			6,381,803			6,374,490			6,243,313			6,404,719
Short-term investments		779,057			760,194			876,314			110,229			49,513
Earning assets		30,179,103			30,134,790			28,834,072			27,622,161			27,565,973
Allowance for loan losses		(448,674	)		(442,638	)		(426,003	)		(191,251	)		(195,572	)
Goodwill and other intangible assets		946,958			951,746			956,916			962,260			977,369
Other assets		2,515,937			2,571,502			2,396,708			2,207,587			2,195,779
Total assets	$	33,193,324		$	33,215,400		$	31,761,693		$	30,600,757		$	30,543,549
Noninterest-bearing deposits	$	11,881,548		$	11,759,085		$	9,204,631		$	8,775,632		$	8,686,383
Interest-bearing transaction and savings deposits		9,971,869			9,605,254			8,931,192			8,845,097			8,758,993
Interest-bearing public fund deposits		3,176,225			3,326,033			3,251,445			3,364,416			2,954,966
Time deposits		2,001,017			2,631,896			3,621,228			2,818,430			3,800,957
Total interest-bearing deposits		15,149,111			15,563,183			15,803,865			15,027,943			15,514,916
Total deposits		27,030,659			27,322,268			25,008,496			23,803,575			24,201,299
Short-term borrowings		1,906,895			1,754,875			2,673,283			2,714,872			2,108,815
Long-term debt		385,887			386,269			225,606			233,462			246,641
Other liabilities		494,239			435,831			433,244			381,163			400,414
Stockholders' equity		3,375,644			3,316,157			3,421,064			3,467,685			3,586,380
Total liabilities & stockholders' equity	$	33,193,324		$	33,215,400		$	31,761,693		$	30,600,757		$	30,543,549
For informational purposes only - included above
SBA Paycheck Protection Program (PPP) loans	$	2,323,691		$	2,286,963		$	—		$	—		$	—

	Three Months Ended									Nine Months Ended
	September 30,			June 30,			September 30,			September 30,
(in thousands)	2020			2020			2019			2020			2019
Average Balance Sheet
Total loans	$	22,407,825		$	22,957,032		$	20,197,114		$	22,200,385		$	20,158,313
Loans held for sale		112,230			89,935			55,348			80,942			34,740
Securities (a)		6,389,214			6,129,616			6,004,688			6,223,361			5,750,530
Short-term investments		502,992			837,246			180,463			515,661			208,263
Earning assets		29,412,261			30,013,829			26,437,613			29,020,349			26,151,846
Allowance for loan losses		(446,901	)		(425,844	)		(197,259	)		(371,646	)		(196,297	)
Goodwill and other intangible assets		949,287			954,252			886,868			954,328			884,254
Other assets		2,770,783			2,594,469			2,020,884			2,560,792			1,875,236
Total assets	$	32,685,430		$	33,136,706		$	29,148,106		$	32,163,823		$	28,715,039
Noninterest-bearing deposits	$	11,585,617		$	10,989,921		$	8,092,482		$	10,450,457		$	8,139,439
Interest-bearing transaction and savings deposits		9,806,826			9,387,292			8,179,240			9,332,604			8,096,299
Interest-bearing public fund deposits		3,196,767			3,320,338			2,979,494			3,256,228			3,077,760
Time deposits		2,174,585			3,005,071			3,840,139			2,894,969			3,800,771
Total interest-bearing deposits		15,178,178			15,712,701			14,998,873			15,483,801			14,974,830
Total deposits		26,763,795			26,702,622			23,091,355			25,934,258			23,114,269
Short-term borrowings		1,733,298			2,254,731			2,063,335			2,044,923			1,790,058
Long-term debt		386,015			276,891			234,240			298,436			230,528
Other liabilities		450,729			436,845			375,438			444,225			335,113
Stockholders' equity		3,351,593			3,465,617			3,383,738			3,441,981			3,245,071
Total liabilities & stockholders' equity	$	32,685,430		$	33,136,706		$	29,148,106		$	32,163,823		$	28,715,039
For informational purposes only - included above
SBA Paycheck Protection Program (PPP) loans	$	2,308,021		$	1,727,797		$	—		$	1,348,786		$	—

	Three Months Ended									Six Months Ended						Three Months Ended									Nine Months Ended
	June 30,			March 31,			June 30,			June 30,						September 30,			June 30,			September 30,			September 30,
(in thousands)	2020			2020			2019			2020			2019			2020			2020			2019			2020			2019
Net interest income	$	237,866		$	231,188		$	219,868		$	469,054		$	439,122		$	235,183		$	237,866		$	222,939		$	704,237		$	662,061
Noninterest income		73,943			84,387			79,250			158,330			149,753			83,748			73,943			83,230			242,078			232,983
Total revenue	$	311,809		$	315,575		$	299,118		$	627,384		$	588,875		$	318,931		$	311,809		$	306,169		$	946,315		$	895,044
Taxable equivalent adjustment (a)		3,248			3,448			3,718			6,696			7,542			3,189			3,248			3,652			9,885			11,194
Total revenue (te)	$	315,057		$	319,023		$	302,836		$	634,080		$	596,417		$	322,120		$	315,057		$	309,821		$	956,200		$	906,238
Noninterest expense		(196,539	)		(203,335	)		(183,567	)		(399,874	)		(359,267	)		(195,774	)		(196,539	)		(213,554	)		(595,648	)		(572,821	)
Nonoperating expense		—			—			—			—			—			—			—			28,810			—			28,810
Operating pre-prevision net revenue (te)	$	118,518		$	115,688		$	119,269		$	234,206		$	237,150		$	126,346		$	118,518		$	125,077		$	360,552		$	362,227

	Three Months Ended									Six Months Ended							Three Months Ended									Nine Months Ended
	June 30,			March 31,			June 30,			June 30,							September 30,			June 30,			September 30,			September 30,
(in thousands)	2020			2020			2019			2020			2019				2020			2020			2019			2020			2019
Net income (loss)	$	(117,072	)	$	(111,033	)	$	88,277		$	(228,105	)	$	167,441			$	79,356		$	(117,072	)	$	67,807		$	(148,749	)	$	235,248
Net income and dividends allocated to participating securities		(422	)		(427	)		(1,502	)		(849	)		(2,839	)			(1,436	)		(422	)		(1,141	)		(1,278	)		(3,980	)
Net income (loss) available to common shareholders		(117,494	)		(111,460	)		86,775			(228,954	)		164,602				77,920			(117,494	)		66,666			(150,027	)		231,268
Nonoperating items, net of applicable income tax		—			—			—			—			—				—			—			22,760			—			30,720
Nonoperating items allocated to participating securities		—			—			—			—			—				—			—			(383	)		—			(517	)
Operating earnings (loss) available to common shareholders	$	(117,494	)	$	(111,460	)	$	86,775			(228,954	)		164,602			$	77,920		$	(117,494	)	$	89,043			(150,027	)		261,471
Weighted average common shares - diluted		86,301			87,186			85,835			86,744			85,810				86,400			86,301			86,462			86,614			86,010
Earnings per share - diluted	$	(1.36	)	$	(1.28	)	$	1.01		$	(2.64	)	$	1.92			$	0.90		$	(1.36	)	$	0.77		$	(1.73	)	$	2.69
Operating earnings per share - diluted	$	(1.36	)	$	(1.28	)	$	1.01		$	(2.64	)	$	1.92			$	0.90		$	(1.36	)	$	1.03		$	(1.73	)	$	3.04

Quarter earnings per share - diluted, impact of energy loan sale																Quarter earnings per share - diluted, impact of energy loan sale

																				Three Months Ended
																				June 30,
(in thousands, except per share amounts)																				2020
1
Provision for credit losses attributable to the sale of energy loans																				$	160,101
Income tax benefit at a 21% rate																					(33,621	)
Impact of energy loan sale, net of income tax																				$	126,480
Weighted average common shares - diluted																					86,323
Impact of energy loan sale per share - diluted																				$	(1.47	)

Liquidity management ~~is focused on ensuring~~ensures 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. As part of the overall asset and liability management process, liquidity management strategies and measurements have been developed to manage and monitor liquidity risk. Management has taken deliberate, proactive measures to manage liquidity during this period of unprecedented economic uncertainty. In the first quarter of 2020, in anticipation of further disruption in the financial and credit markets, theThe Company enacted strategies in 2020 to strengthen liquidity through various measures to ensure ~~we have~~ funds are available to meet the needs of our day to day operations and those of our ~~customers.~~customers during this unprecedented period of disruption in financial and credit markets. At ~~June~~September 30, 2020, we had over ~~$17~~$18 billion in net available sources of funds, summarized as follows:

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~~of 20% or ~~more.~~greater. As shown in the table below, our ratio of free securities to total securities was 54.68% at September 30, 2020, compared to 48.83% at June 30, 2020 ~~compared to 25.42%~~and 54.44% at ~~March 31, 2020 and 40.10% at June~~September 30, 2019. The total of pledged securities at ~~June~~September 30, 2020 was ~~$3.3~~$3.2 billion, down ~~$1.5 billion~~$73.9 million from ~~March 31,~~June 30, 2020. March 31, 2020 included $1.5 billion additional pledged securities as part of our COVID-19 asset liability response strategy, which provided enhanced liquidity through additional borrowing capacity at the Federal Reserve. These securities were released in June 2020 and replaced with the pledge of $2.3 billion of PPP loans. Securities and FHLB letters of credit are pledged as collateral related to public funds and repurchase agreements.

	June 30			March 31,			December 31,			September 30,			June 30,			September 30,			June 30,			March 31,			December 31,			September 30,
Liquidity Metrics	2020			2020			2019			2019			2019			2020			2020			2020			2019			2019
Free securities / total securities		48.83	%		25.42	%		47.27	%		54.44	%		40.10	%		54.68	%		48.83	%		25.42	%		47.27	%		54.44	%
Core deposits / total deposits		94.53	%		90.48	%		93.54	%		90.31	%		89.30	%		96.22	%		94.53	%		90.48	%		93.54	%		90.31	%
Wholesale funds / core deposits		10.37	%		17.76	%		13.99	%		15.54	%		15.13	%		9.42	%		10.37	%		17.76	%		13.99	%		15.54	%
Quarter-to-date average loans /quarter-to-date average deposits		85.97	%		87.28	%		88.22	%		87.47	%		87.09	%		83.72	%		85.97	%		87.28	%		88.22	%		87.47	%

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 ~~June~~September 30, 2020, deposits totaled ~~$27.3~~$27.0 billion, ~~an increase~~a decrease of ~~$2.3 billion,~~$291.6 million, or 9%1%, from ~~March 31,~~June 30, 2020 and an increase of ~~$4.1~~$2.8 billion, or ~~18%~~12%, from September 30, 2019. The decrease from June 30, ~~2019.~~2020 is primarily attributable to a decrease in certificates of deposit (“CDs”). The increase ~~over March 31, 2020 is due to PPP loan proceeds and other stimulus funds being held in deposit accounts. The increase compared to June~~from September 30, 2019 is ~~also due~~largely attributable to ~~stimulus activity~~the increase in noninterest-bearing deposits following the funding of PPP loans and the ~~acquisition~~issuance of ~~$1.3 billion in deposits in the MidSouth transaction.~~government stimulus payments. Core deposits consist of total deposits excluding ~~certificates of deposit (“CDs”)~~CDs of $250,000 or more and brokered ~~deposits~~. deposits. Core deposits totaled ~~$25.8~~$26.0 billion at ~~June~~September 30, 2020, an increase of ~~$3.2 billion from March 31, 2020, and $5.1 billion~~$178.9 million from June 30, ~~2019~~. 2020, and $4.2 billion from September 30, 2019. The ratio of core deposits to total deposits was 96.22% at September 30, 2020, compared to 94.53% at June 30, 2020 ~~compared to 90.48%~~and 90.31% at ~~March 31, 2020 and 89.30% at June~~September 30, 2019. Brokered deposits totaled ~~$538.3~~$157.0 million as of ~~June~~September 30, 2020, a decrease of ~~$580.4~~$381.4 million compared to ~~March 31,~~June 30, 2020 and a decrease of ~~$726.6~~$885.0 million compared to ~~June~~September 30, 2019. Brokered deposits ~~were lower~~declined compared to ~~prior~~both comparative periods ~~due~~as brokered certificates that matured during the period were not reissued as part of our effort to ~~maturities that were replaced with the higher level of customer deposits.~~ utilize excess liquidity.

The use of brokered deposits as a funding source is subject to certain policies regarding the amount, term and interest rate. In the second quarter of 2020, the Bank implemented a reciprocal deposit program that allows depositors to ~~authorize and instruct the Bank to reciprocate~~place their uninsured deposits with other FDIC insured financial institutions in order to obtain FDIC insurance on those deposits, and allows us to reciprocate those deposits. To-date, there has been only minimal activity in this program.

Purchases of federal funds, securities sold under agreements to repurchase and other short-term borrowings from customers provide additional sources of liquidity to meet short-term funding requirements. Besides funding from customer sources, the Bank has a line of credit with the FHLB that is secured by blanket pledges of certain mortgage loans. At ~~June~~September 30, 2020, the Bank had borrowings of approximately $1.1 billion and had approximately ~~$3.6~~$3.7 billion available under this ~~line~~line. The unused borrowing capacity at the Federal Reserve’s discount window is approximately ~~$4.7~~$4.6 billion; there were no outstanding borrowings with the Federal Reserve at any date during any period covered by this report.

The Company is offering loan modifications under Section 4013 of the CARES Act to offer assistance to our customers impacted by the pandemic. The Company has sufficient excess liquidity to cover cash flow reduction due to the short-term loan payment deferrals.

Wholesale funds, which are comprised of short-term borrowings, long-term debt and brokered deposits were ~~10.37%~~9.42% of core deposits at ~~June~~September 30, 2020, compared to ~~17.76% at March 31, 2020 and 15.13%~~10.37% at June 30, 2020 and 15.54% at September 30, 2019. At ~~June~~September 30, 2020, wholesale funds totaled ~~$2.7~~$2.5 billion, a decrease of ~~$1.3 billion,~~$229.7 million, or ~~33%~~8.6%, from ~~March 31,~~June 30, 2020 and a decrease of ~~$459.8~~$947.6 million, or ~~15%~~27.9%, from ~~June~~

September 30, 2019. The linked quarter decrease in wholesale funds was primarily ~~related~~attributable to ~~decreases~~the decrease in ~~FHLB borrowings,~~ brokered deposits, ~~and federal funds purchased,~~ offset by ~~increases~~an increase in repurchase ~~agreements and long-term debt.~~agreements. The year over year decrease in wholesale funds was ~~primarily related~~attributable to ~~a decrease~~decreases in brokered deposits and short-term borrowings, partially offset by ~~increases in short-term borrowings and long-term~~the June 2020 issuance of subordinated debt. 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 third quarter of 2020 was 83.72%, compared to 85.97% for the second quarter of 2020 ~~was 85.97%, compared to 87.28%~~and 87.47% for the ~~first quarter of 2020 and 87.09% for the second~~third quarter of 2019. Management has an established target range for the loan-to-deposit ratio of 87% to 89%, but may operate outside that range 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~~during the ~~six~~nine months ended ~~June~~September 30, 2020 and 2019.

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. On June 9, 2020, the Parent completed the issuance of subordinated notes payable with an aggregate principal amount of $172.5 million, providing additional liquidity that can be used by the Parent or to provide capital to the Bank, if deemed appropriate.

Stockholders’ equity totaled ~~$3.3~~$3.4 billion at September 30, 2020, up $59.5 million from June 30, 2020 and down ~~$104.9~~$210.7 million ~~or 3%,~~ from ~~March 31, 2020 and relatively unchanged from June~~September 30, 2019. The tangible common equity ratio was 7.53% at September 30, 2020, compared to 7.33% at June 30, 2020 ~~compared to 8.00%~~and 8.82% at ~~March 31, 2020 and 8.75% at June~~September 30, 2019. The ~~decrease~~increase in the tangible common equity ratio from ~~March 31,~~June 30, 2020 ~~was~~is primarily attributable to ~~an increase in~~ tangible ~~assets as a result of the PPP loans and the impact of the energy loan sale.~~net earnings, partially offset by dividends paid. The decrease from ~~June~~September 30, 2019 ~~was mainly due~~is attributable to ~~an increase~~the decrease in ~~tangible assets from the PPP loans, increased liquid assets, and the Midsouth acquisition, as well as decreased~~retained earnings as a result of net loss, dividends paid and the ~~impact~~cumulative effect of the ~~pandemic~~adoption of CECL, share repurchases, and the ~~energy loan sale. The~~growth in tangible assets, largely driven by the origination of PPP loans; these factors were partially offset by net gains on fair value adjustments included in accumulated other comprehensive income. Following the de-risking strategies executed during the first half of 2020, the tangible common equity ratio ~~at June 30, 2020 fell~~declined below management’s internal target of at least 8.00%; however, the ratio has increased in third quarter and based on current expectations, we ~~expect~~estimate the ratio to ~~build to levels above~~approximate 8.00% by ~~year~~the end ~~assuming~~of the ~~economy and earnings perform as expected and tangible assets decrease from a reduction in both liquid assets and PPP loans.~~year.

The regulatory capital ratios of the Company and the Bank at ~~June~~September 30, 2020 remained well in excess of current regulatory minimum requirements, ~~and the~~including capital conservation buffers, by at least $428 million. The Company and the Bank have been categorized as “well-capitalized” in the most recent notices received from our regulators. ~~As of June 30, 2020, all regulatory capital ratios for the Company exceeded regulatory minimum levels including capital conservation buffers by at least $312 million.~~ Refer to the Supervision and Regulation section in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 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 capital ratios ~~as of~~at September 30, 2020, June 30, 2020 and March 31, 2020 reflect the election to use the interim final five-year transition rule issued on March 27, 2020 available for institutions required to adopt CECL as of January 1, 2020. The new CECL transition rule allows for the option to delay for two years the estimated impact of CECL on regulatory capital (0%), followed by a three-year transition (25% in 2022, 50% in 2023, 75% in 2024, and 100% thereafter). In addition, the two-year delay also includes full impact of January 1, 2020 impact plus an estimated impact of CECL calculated quarterly as 25% of the current ACL over the January 1, balance (modified transition amount). The modified transition amount will be recalculated each quarter in 2020 and 2021, with the December 31, 2021 impact carrying through remaining three-year transition. The election to use the revised final CECL transition rules favorably impacted our leverage ratio upon adoption by 19 bps and our tier 1 common, tier 1 equity and total capital regulatory ratios by 22 bps.

	Well-			June 30,			March 31,			December 31,			September 30,			June 30,			Well-			September 30,			June 30,			March 31,			December 31,			September 30,
	Capitalized			2020			2020			2019			2019			2019			Capitalized			2020			2020			2020			2019			2019
Total capital (to risk weighted assets)
Hancock Whitney Corporation		10.00	%		12.36	%		11.87	%		11.90	%		12.43	%		12.43	%		10.00	%		12.92	%		12.36	%		11.87	%		11.90	%		12.43	%
Hancock Whitney Bank		10.00	%		11.17	%		11.45	%		11.53	%		11.19	%		11.81	%		10.00	%		11.78	%		11.17	%		11.45	%		11.53	%		11.19	%
Tier 1 common equity capital (to risk weighted assets)
Hancock Whitney Corporation		6.50	%		9.78	%		10.02	%		10.50	%		11.02	%		10.94	%		6.50	%		10.30	%		9.78	%		10.02	%		10.50	%		11.02	%
Hancock Whitney Bank		6.50	%		9.91	%		10.20	%		10.74	%		10.39	%		10.97	%		6.50	%		10.53	%		9.91	%		10.20	%		10.74	%		10.39	%
Tier 1 capital (to risk weighted assets)
Hancock Whitney Corporation		8.00	%		9.78	%		10.02	%		10.50	%		11.02	%		10.94	%		8.00	%		10.30	%		9.78	%		10.02	%		10.50	%		11.02	%
Hancock Whitney Bank		8.00	%		9.91	%		10.20	%		10.74	%		10.39	%		10.97	%		8.00	%		10.53	%		9.91	%		10.20	%		10.74	%		10.39	%
Tier 1 leverage capital
Hancock Whitney Corporation		5.00	%		7.37	%		8.40	%		8.76	%		9.49	%		9.10	%		5.00	%		7.70	%		7.37	%		8.40	%		8.76	%		9.49	%
Hancock Whitney Bank		5.00	%		7.47	%		8.55	%		8.96	%		8.95	%		9.12	%		5.00	%		7.86	%		7.47	%		8.55	%		8.96	%		8.95	%

On September 23, 2019, the Company’s board of directors approved a stock buyback program that authorizes the Company to repurchase up to 5.5 million shares of our common stock through the expiration date of December 31, 2020. The program allows the Company to repurchase its common shares in the open market, by block purchase, through accelerated share repurchase programs, in privately negotiated transactions, or as otherwise determined by the Company in one or more 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.

On October 18, 2019, the Company entered into an accelerated share repurchase (“ASR”) agreement with Morgan Stanley & Co. LLC (“Morgan Stanley”) to repurchase $185 million of the Company’s common stock. Pursuant to the ASR agreement, the Company made a $185 million payment to Morgan Stanley on October 21, 2019, and received on the same day an initial delivery of approximately 3.6 million shares of the Company’s common stock. On March 18, 2020, pursuant to the terms of the agreement, the final settlement of the ASR commenced whereby the Company received approximately $12.1 million and a final delivery of 1.0 million shares.

In January 2020, the Company repurchased 315,851 shares of its common stock at a price of $40.26 per share in a privately negotiated transaction. The Company has repurchased a total of 4.9 million shares of the 5.5 million authorized under the buyback program at an average price of $37.65 per share through the ASR agreement and the privately negotiated transaction. The Company has suspended further repurchases of shares under this program.

On May 20, 2020, our board of directors declared a regular second quarter cash dividend of $0.27 per share, consistent with the prior quarter. The Company intends to pay its next quarterly dividend and is in consultation with its regulators regarding the dividend payment, while the board evaluates the dividend payout policy quarterly.

On June 9, 2020, the Parent completed the issuance of subordinated notes with an aggregate principal amount of $172.5 million and a stated maturity of June 15, 2060, that qualify as tier 2 capital in the calculation of certain regulatory capital ratios.

On August 27, 2020, our board of directors declared a regular third quarter cash dividend of $0.27 per share, consistent with the prior quarter. The dividend was paid on September 15, 2020. The Company intends to pay its next quarterly dividend and is in consultation with its regulators regarding the dividend payment, while the board evaluates the dividend payout policy quarterly.

As of ~~June~~September 30, 2020, the Company ~~funded 12,662~~has PPP loans totaling ~~approximately~~ $2.3 billion ~~in originations through the first and second phases of the program. These loans~~that are guaranteed by the SBA, and ~~loans that meet~~when meeting certain regulatory criteria, are subject to forgiveness. These loans carry a 0% risk-weighting in the ~~Tier~~tier 1 and ~~Total Capital~~total capital regulatory ratios due to the full guarantee by the SBA. However, these loans are reflected in average assets used to compute ~~Tier~~tier 1 leverage.

Investment in securities totaled ~~$6.4~~$7.1 billion at ~~June~~September 30, 2020, up ~~$7.3 million, or less than 1%, from March 31, 2020 and up $656.1~~$674.5 million, or 11%, from June 30, 2020 and up $651.6 million, or 10%, from September 30, 2019. At ~~June~~September 30, 2020, securities available for sale totaled ~~$4.9~~$5.7 billion and securities held to maturity totaled ~~$1.5~~$1.4 billion. The purpose of our securities portfolio is to increase profitability, mitigate interest rate risk, provide liquidity and comply with regulatory ~~requirements.~~requirements. Our securities portfolio includes securities categorized as available for sale and held to maturity. Available for sale securities are carried at fair value and may be sold prior to maturity. Unrealized gains or losses on available for sale securities, net of deferred taxes, are recorded as accumulated other comprehensive income in shareholders’ equity.

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 effective duration generally between two and five and a half years. At September 30, 2020, the average expected maturity of the portfolio was 5.54 years with an effective duration of 4.00 years and a nominal weighted-average yield of 2.20%. Management simulations indicate that the effective duration would increase to 4.29 years with a 100 bp increase in the yield curve and increase to 4.50 years with a 200 bp increase. At June 30, 2020, the average expected maturity of the portfolio was 5.51 years with an effective duration of 3.79 years and a nominal weighted-average yield of 2.41%. Management simulations indicate that the effective duration would increase to 4.03 years with a 100 bp increase in the yield curve and increase to 4.17 years with a 200 bp increase. At March 31, 2020, the average expected maturity of the portfolio was 5.76 years with an effective duration of 3.57 years and a nominal weighted-average yield of 2.51%. The average maturity of the portfolio at ~~June~~September 30, 2019 was ~~5.41~~5.75 years, with an effective duration was ~~4.18~~4.0 years and the nominal weighted-average yield was ~~2.75%~~2.63%. The changes in expected maturity, effective duration, and nominal weighted-average yield compared to prior quarter and year-over-year were primarily related to securities portfolio growth and the reinvestment of the securities portfolio maturities, paydowns and sales.

Effective January 1, 2020 and in conjunction with the adoption of CECL, and again as of ~~June~~September 30, 2020, the Company evaluated its securities portfolio for credit loss. Based on our assessment, expected credit loss was negligible for both periods and therefore, no allowance for credit loss was recorded.

Total loans at ~~June~~September 30, 2020 were ~~$22.6~~$22.2 billion, ~~up $1.1~~down $0.4 billion, or ~~5%, from March 31, 2020, and up $2.5 billion, or 12%~~2%, from June 30, 2020, and up $1.2 billion, or 6%, from September 30, 2019. The linked-quarter ~~growth~~decline was primarily related to ~~$2.3 billion of PPP loans originated during the quarter, partially offset by the energy loan sale, lower~~limited demand throughout ~~all regions across~~our footprint stemming from the ~~Bank’s footprint, and approximately $500 million in paydowns on lines of credit.~~current economic environment. Growth compared to the same quarter last year reflect ~~both~~ the originations of ~~the~~ PPP loans, ~~as well as the addition of $788 million in loans through the acquisition of MidSouth during the third quarter of 2019,~~ partially offset by the sale of a portion of the energy loan portfolio and a decrease in demand across our footprint.

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

	June 30,		March 31,		December 31,		September 30,		June 30,		September 30,		June 30,		March 31,		December 31,		September 30,
(in thousands)	2020		2020		2019		2019		2019		2020		2020		2020		2019		2019
Total loans:
Commercial non-real estate	$	10,465,280	$	9,321,340	$	9,166,947	$	8,893,004	$	8,559,118	$	10,257,788	$	10,465,280	$	9,321,340	$	9,166,947	$	8,893,004
Commercial real estate - owner occupied		2,762,259		2,731,320		2,738,460		2,734,379		2,519,970		2,779,407		2,762,259		2,731,320		2,738,460		2,734,379
Total commercial and industrial		13,227,539		12,052,660		11,905,407		11,627,383		11,079,088		13,037,195		13,227,539		12,052,660		11,905,407		11,627,383
Commercial real estate - income producing		3,350,299		3,232,783		2,994,448		3,060,568		2,895,468		3,406,554		3,350,299		3,232,783		2,994,448		3,060,568
Construction and land development		1,128,959		1,098,726		1,157,451		1,190,718		1,144,062		1,096,149		1,128,959		1,098,726		1,157,451		1,190,718
Residential mortgages		2,877,316		2,979,985		2,990,631		3,004,958		2,968,271		2,754,388		2,877,316		2,979,985		2,990,631		3,004,958
Consumer		2,044,264		2,151,527		2,164,818		2,152,325		2,088,923		1,945,918		2,044,264		2,151,527		2,164,818		2,152,325
Total loans	$	22,628,377	$	21,515,681	$	21,212,755	$	21,035,952	$	20,175,812	$	22,240,204	$	22,628,377	$	21,515,681	$	21,212,755	$	21,035,952

Commercial and industrial (“C&I”) loans, including both non-real estate and owner occupied real estate secured loans, totaled approximately ~~$13.2~~$13.0 billion, or ~~58%~~59% of the total loan portfolio, at ~~June~~September 30, 2020, ~~an increase~~a decrease of ~~$1.2 million, or 10%, from March 30, 2020 and $2.1~~$0.2 billion, or ~~19%~~1%, from June 30, 2020 and an increase of $1.4 billion, or 12%, from September 30, 2019. The linked-quarter ~~growth~~decline is primarily due to ~~PPP loan originations, partially offset by repayments on lines of credit and the energy loan sale.~~lower demand across our footprint. The year over year increase is related to ~~the~~ PPP loan originations, ~~the MidSouth acquisition~~ partially offset by the energy loan sale and lower demand across most regions and specialty lines as a result of the economic impact of the pandemic.

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 ~~June~~September 30, 2020 totaled approximately ~~$1.8~~$1.6 billion, or 8%7% of total loans, a decrease of ~~$566.9~~$145.3 million from ~~March 31,~~June 30, 2020, due primarily to the energy loan sale. At ~~June~~September 30, 2020, approximately ~~$355.3~~$291.1 million of our shared national credits were with ~~healthcare related~~healthcare-related customers.

Loans to borrowers in the energy sector totaled ~~$351.9~~$337.8 million at September 30, 2020, down $14.1 million, or 4%, from June 30, 2020 ~~down $587.7~~and $696.0 million, or ~~63%, from March 31, 2020 and $655.7 million, or 65%~~67%, compared to ~~June~~September 30, 2019. The linked quarter decrease in energy-related loans resulted ~~primarily~~ from net paydowns. The year-over-year decrease was largely due to the sale of $497 million of energy loans ~~which was transferred to held for sale at the loans’ observable market value less cost to sell, additional~~in June 2020, net ~~charge-offs of $26 million and net payoffs and~~ paydowns ~~of $65 million. The year-over-year decrease was largely due to the energy loan sale, net payoffs~~ and charge-offs, partially offset by acquired MidSouth energy loans. At ~~June~~September 30, 2020, the majority of the remaining energy portfolio is comprised of customers engaged in onshore and offshore services and products to support exploration and production activities, with approximately ~~75%~~70% of the ~~customers’~~ balances in increments of $10 million or less.

Our loan portfolio is well diversified by product, client, and geography throughout our footprint. Nevertheless, we may be exposed to certain concentrations of credit risk which exist in relation to different borrowers or groups of borrowers, specific types of collateral, industries, loan products, or regions. The following table provides detail of the more significant industry concentrations for our commercial and industrial loan portfolio, which is based on NAICS codes for all industries, with the exceptions of energy, which is based on the borrower’s source of revenue (i.e. manufacturer whose income is derived from energy-related business is reported as energy), and PPP loans, as those are expected to be 100% SBA guaranteed and therefore have nolimited credit risk.

	June 30,					March 31,					December 31,					September 30,					June 30,					September 30,					June 30,					March 31,					December 31,					September 30,
	2020					2020					2019					2019					2019					2020					2020					2020					2019					2019
			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		1,326,198		10	%		1,420,629		12	%		1,432,319		12	%		1,454,795		13	%		1,341,902		12	%	$	1,273,360		10	%	$	1,326,198		10	%	$	1,420,629		12	%	$	1,432,319		12	%	$	1,454,795		13	%
Health care and social assistance		1,129,983		9	%		1,201,423		10	%		1,144,369		10	%		1,084,884		9	%		1,040,352		9	%
Healthcare and social assistance																											1,135,986		9	%		1,129,983		9	%		1,201,423		10	%		1,144,369		10	%		1,084,884		9	%
Retail trade		1,057,248		8	%		1,066,780		9	%		1,098,810		9	%		1,060,765		9	%		1,024,031		9	%		1,035,295		8	%		1,057,248		8	%		1,066,780		9	%		1,098,810		9	%		1,060,765		9	%
Manufacturing		967,054		7	%		959,653		8	%		928,467		8	%		957,622		8	%		889,539		8	%		934,582		7	%		967,054		7	%		959,653		8	%		928,467		8	%		957,622		8	%
Transportation and warehousing		839,192		6	%		828,215		7	%		768,971		6	%		705,536		6	%		681,390		6	%		825,113		3	%		839,192		6	%		828,215		7	%		768,971		6	%		705,536		6	%
Public administration		723,565		5	%		761,284		6	%		774,401		7	%		765,492		7	%		778,622		7	%		696,160		6	%		723,565		5	%		761,284		6	%		774,401		7	%		765,492		7	%
Finance and insurance		693,044		5	%		740,915		6	%		677,500		6	%		632,197		5	%		610,900		6	%		655,468		5	%		693,044		5	%		740,915		6	%		677,500		6	%		632,197		5	%
Wholesale trade		691,671		5	%		784,354		7	%		751,794		6	%		691,648		6	%		654,293		6	%		664,648		5	%		691,671		5	%		784,354		7	%		751,794		6	%		691,648		6	%
Accommodation, food services and entertainment		640,167		5	%		616,473		5	%		613,982		5	%		611,663		5	%		570,849		5	%		632,582		5	%		640,167		5	%		616,473		5	%		613,982		5	%		611,663		5	%
Construction		599,238		5	%		700,313		6	%		724,614		6	%		637,512		5	%		619,097		6	%		631,239		5	%		599,238		5	%		700,313		6	%		724,614		6	%		637,512		5	%
Professional, scientific, and technical services		476,011		4	%		503,325		4	%		515,634		4	%		492,424		4	%		454,445		4	%		481,296		5	%		476,011		4	%		503,325		4	%		515,634		4	%		492,424		4	%
Other services (except public administration)		442,407		4	%		456,084		4	%		451,889		4	%		476,731		4	%		452,553		4	%		433,718		4	%		442,407		4	%		456,084		4	%		451,889		4	%		476,731		4	%
Energy		348,547		3	%		935,076		8	%		958,486		8	%		1,026,680		9	%		1,003,492		9	%		335,677		3	%		348,547		3	%		935,076		8	%		958,486		8	%		1,026,680		9	%
Educational services		323,673		2	%		326,708		3	%		342,544		3	%		353,366		3	%		351,697		3	%		309,664		2	%		323,673		2	%		326,708		3	%		342,544		3	%		353,366		3	%
Other		682,578		5	%		751,428		5	%		721,627		6	%		676,068		7	%		605,926		6	%		668,716		5	%		682,578		5	%		751,428		5	%		721,627		6	%		676,068		7	%
Total commercial & industrial loans, excluding PPP loans	$	10,940,576		83	%	$	12,052,660		100	%	$	11,905,407		100	%	$	11,627,383		100	%	$	11,079,088		100	%
Total commercial & industrial loans																										$	10,713,504		82	%	$	10,940,576		83	%	$	12,052,660		100	%	$	11,905,407		100	%	$	11,627,383		100	%
PPP loans		2,286,963		17	%		—		—			—		—			—		—			—		—			2,323,691		18	%		2,286,963		17	%		—		—			—		—			—		—
Total commercial & industrial loans	$	13,227,539		100	%	$	12,052,660		100	%	$	11,905,407		100	%	$	11,627,383		100	%	$	11,079,088		100	%	$	13,037,195		100	%	$	13,227,539		100	%	$	12,052,660		100	%	$	11,905,407		100	%	$	11,627,383		100	%

Commercial real estate – income producing loans totaled approximately $3.4 billion at ~~June~~September 30, 2020, an increase of ~~$117.5~~$56.3 million, or 4%2%, from ~~March 31, 2020.~~June 30, 2020 and $346.0, or 11%, from September 30, 2019. Construction and land development loans, totaling approximately $1.1 billion at ~~June~~September 30, 2020, ~~increased $30.2~~decreased $32.8 million, or 3%, from ~~March 31, 2020.~~June 30, 2020 and $94.6 million, or 8%, from September 30, 2019. The following table details for the preceding five quarters the end-of-period aggregated commercial real estate – income producing and construction loan balances by property type. Loans reflected in 1-4 Family Residential Construction include both loans to construction builders as well as single family borrowers.

	June 30,					March 31,					December 31,					September 30,					June 30,					September 30,					June 30,					March 31,					December 31,					September 30,
	2020					2020					2019					2019					2019					2020					2020					2020					2019					2019
			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 and construction loans:
Retail		712,844		16	%		708,087		16	%	$	663,196		16	%	$	636,484		15	%	$	610,354		15	%	$	744,994		17	%	$	712,844		16	%	$	708,087		16	%	$	663,196		16	%	$	636,484		15	%
Multifamily		601,749		13	%		552,464		13	%		520,444		13	%		539,994		13	%		588,282		14	%		625,992		14	%		601,749		13	%		552,464		13	%		520,444		13	%		539,994		13	%
Healthcare related properties		546,641		12	%		569,166		13	%	$	517,855		12	%	$	562,726		13	%	$	548,470		14	%		559,196		12	%		546,641		12	%		569,166		13	%		517,855		12	%		562,726		13	%
Office		537,476		12	%		475,565		11	%		447,972		11	%		447,872		11	%		403,322		10	%		504,168		11	%		537,476		12	%		475,565		11	%		447,972		11	%		447,872		11	%
Industrial		538,955		12	%		535,070		12	%		498,291		12	%		491,984		12	%		471,677		12	%		530,450		12	%		538,955		12	%		535,070		12	%		498,291		12	%		491,984		12	%
Hotel, motel and restaurants		510,021		11	%		502,866		12	%		477,728		11	%		431,082		10	%		486,939		12	%		524,275		12	%		510,021		11	%		502,866		12	%		477,728		11	%		431,082		10	%
1-4 family residential construction		457,011		10	%		439,739		10	%		443,835		11	%		486,848		11	%		505,730		12	%		464,347		10	%		457,011		10	%		439,739		10	%		443,835		11	%		486,848		11	%
Other land loans		258,858		6	%		246,377		6	%		250,357		6	%		262,298		6	%		232,025		6	%		273,915		6	%		258,858		6	%		246,377		6	%		250,357		6	%		262,298		6	%
Other		315,703		8	%		302,175		7	%		332,221		8	%		391,998		9	%		192,731		5	%		275,366		6	%		315,703		8	%		302,175		7	%		332,221		8	%		391,998		9	%
Total commercial real estate - income producing and construction loans		4,479,258		100	%		4,331,509		100	%	$	4,151,899		100	%	$	4,251,286		100	%	$	4,039,530		100	%	$	4,502,703		100	%	$	4,479,258		100	%	$	4,331,509		100	%	$	4,151,899		100	%	$	4,251,286		100	%

Our residential mortgages loan portfolio totaled ~~$2.9~~$2.8 billion at September 30, 2020, down $122.9 million, or 4%, from June 30, 2020 and down ~~$103~~$250.6 million, or ~~3%, from March 31, 2020 and down $91 million, or 3%~~8%, compared to ~~June~~September 30, 2019. The low interest rate environment has led to increased activity in mortgages originated for sale, resulting in a decline in our residential mortgage portfolio. Generally, fixed-rate longer-term loans originated are sold in the secondary market. The consumer loan portfolio totaled ~~$2.0~~$1.9 billion at ~~June~~September 30, 2020, down ~~$107~~$98.3 million, or 5%, compared to ~~March 31,~~June 30, 2020, and down ~~$45~~$206.4 million, or 2%10%, compared to ~~June~~September 30, 2019. The decline in the consumer loan portfolio is due in part to the wind down of indirect auto lending.

The markets that we serve have been negatively impacted by the widespread economic shutdown and market turmoil caused by the pandemic and prolonged depressed oil prices. While we expect to see impacts across all of our portfolios, we have identified four principle sectors that are of particular focus where we expect there may be a greater effect and a more challenging recovery. We are

closely monitoring our concentrations in these industries and others with active and frequent borrower dialogue, payment deferral, and other accommodations and financial support, where warranted. While these industries and others have been significantly impacted by the pandemic, the long-term impacts remain unknown and are dependent on several factors, including the severity of the economic downturn, length of time until full recovery and the effectiveness of government stimulus plans.

The table below summarizes our funded commercial loan exposure to these sectors under focus ~~segmented by~~at September 30, 2020 and the relative concentration to the total loan portfolio, excluding low-risk SBA guaranteed PPP loans. Loans within our ~~estimation~~sectors under focus total approximately 24% of ~~level~~total loans outstanding, excluding PPP loans, and comprise nearly 50% of ~~concern, at June 30, 2020.~~both our commercial criticized and pass watch rated loans.

Management’s expectation for loan growth through the remainder of the year is tempered given the ongoing economic environment. We expect forgiveness of PPP loans to begin in fourth quarter and continue through early 2021. As such, continued contraction of total loans is anticipated for the fourth quarter of 2020.

The Company's allowance for credit losses was $480.2 million at September 30, 2020, compared to $479.2 million at June 30, ~~2020 compared to $475.0 million at March 31,~~ 2020 and $195.2 million at December 31, 2019. The adoption of the CECL standard on January 1, 2020 includes increases totaling $49.4 million in the funded allowance for loan losses and $27.3 million in the reserve for unfunded lending commitments. These increases are the result of the difference between estimated incurred losses at the adoption date and the forward-looking projected losses over the remaining estimated term of the financial instruments. The higher reserves from the change in accounting principal is largely driven by our longer-term assets as well as expected future funding of construction lending and certain other revolving products. Refer to Note 1 – Basis of Presentation – Critical Accounting Policies and Estimates for a description of the CECL methodology and Note 16 – Recent Accounting Pronouncements for additional discussion of the impact of adoption.

The ~~$4.2~~$1.0 million increase in the ~~second~~third quarter 2020 allowance for credit losses is ~~the result of the netting of an allowance build of $86.7 million~~primarily due to ~~worsening of the~~higher individually evaluated reserves (generally used for nonperforming and troubled debt restructured loans), largely offset by lower collectively evaluated reserves driven by a modestly improved economic ~~forecasts compared to those utilized in the prior quarter,~~forecast and ~~a release of $82.5 million in reserves related to write-down and transfer of a portfolio of energy-related loans to held for sale.~~lower overall outstanding balances. The Company probability-weighted three Moody’s macroeconomic scenarios in the calculation of our collectively evaluated allowance for credit ~~loss analysis. The~~losses. Consistent with the second quarter, the baseline scenario was weighted most heavily at 50% and the upside scenario S-1 (faster near-term growth) and downside scenario S-2 (slower near-term

growth) were each weighted 25% to incorporate reasonably possible alternative economic outcomes. All three economic scenarios utilized ~~were~~reflect a gradual recovery from the recessionary ~~in the~~ first half of 2020, with ~~unemployment peaking in the~~ second quarter ~~of 2020;~~2020 unemployment as the peak; however, the upside and downside scenarios have varying degrees of ~~severity of the recession,~~ size and timing of additional fiscal stimulus and duration of recovery. The baseline scenario reflects what we believe to be the most likely outcome, and, therefore was given the greatest probability weighting, and the alternative scenarios reflect reasonably possible outcomes due to the uncertainty, both upside and downside, in the economy in the near-term.

The September 2020 baseline forecast ~~reflects~~assumes that the new cases of COVID-19 peaked in July 2020 and does not include new widespread business closures. In this scenario, a ~~sharp recession in the first half of 2020 with~~vaccine is expected by April 2021 and infections are expected to abate by June 2021. Positive job numbers reported to-date have led to a ~~gradual~~slighter quicker recovery in the ~~second half of~~U.S. job market than included in the June 2020 ~~following~~forecast. This scenario assumes that an additional ~~fiscal~~ stimulus ~~package expected~~bill is passed in 2020 to aid in the ~~third quarter of 2020. Compared to~~recovery. Additional information on the ~~Moody's forecasts utilized~~September Baseline forecast is provided in the ~~first quarter, the initial decline in GDP~~“Economic Outlook and ~~growth in unemployment are more severe, and the recovery is more gradual. While~~Ongoing Impact of COVID-19” of this scenario does not include a second wave of the virus that leads to widespread business closures again, the assumption is that recovery will be gradual until the second half of 2021, when a vaccine for the coronavirus is expected to be widely available. This forecast includes the assumption that another large fiscal stimulus package will be passed in the second half of 2020 and that the Federal Reserve will continue to use unlimited quantitative easing to support the economy. For oil prices, as measured by West Texas Intermediate (WTI), this forecast incorporates the rally in oil prices that occurred this quarter compared to the first quarter of 2020.

document. The stronger near-term growth S-1 forecast reflects a quicker economic recovery than the baseline forecast, with more rapid GDP growth and lower unemployment rates through our reasonable and supportable forecast period. The S-1 forecast includes the assumption that business and consumer sentiment will recover in the second half of 2020 following the additional fiscal stimulus package, which is assumed to be larger than in the baseline, as well as positive news around treatments and vaccines for the coronavirus, which help lessen fears of increasing infection. In this scenario, the global demand for oil accelerates faster than in the baseline forecast, and prices are pushed to above $60 per barrel by mid-2022.

reflects a slower economic recovery than the baseline forecast, with ~~a double-dip recession~~higher incidence of infection and death and restrictions on travel and business winding down somewhat more slowly, resulting in ~~the fourth quarter of 2020 and first quarter of 2021 as well as~~ higher unemployment rates than the Baseline scenario in the reasonable and supportable period. The S-2 ~~forecast includes~~scenario also reflects a delay in additional economic stimulus with sustained recovery not occurring until the ~~assumption that recovery will be slower than in the baseline due to heightened fears over the coronavirus, higher incidence~~second half of infections, and a less effective stimulus package than anticipated in the baseline forecast. In this forecast, the demand for oil is less than the baseline, resulting in oil prices below $22 per barrel through the end of 2020 and a more gradual recovery in the reasonable and supportable period.2021.

The ~~degradation~~$285 million increase in ~~economic conditions created~~ the ~~need for allowance builds across all portfolios in the first half of 2020. The increase in~~ allowance for credit ~~losses brings our~~loss for September 30, 2020 compared to December 31, 2019, reflects the $76.7 million cumulative effect adjustment for the adoption of CECL and a net reserve build of $208.2 million which included increases for pandemic-related impacts to the economy, net of the second quarter allowance release of $82.5 million related to the energy loan sale.

Our allowance for credit loss coverage to total loans remains strong at 2.16% at September 30, 2020, or 2.40% when excluding SBA guaranteed PPP loans, compared to 2.12% at June 30, 2020, or 2.36% ~~when~~ excluding ~~SBA guaranteed~~ PPP ~~loans. The allowance for credit loss coverage was 2.21% at March 31, 2020,~~loans, and 0.92% at December 31, 2019.

The allowance for credit losses on the energy portfolio decreased to $19.9 million, or 5.66% of that portfolio, compared to the March 31, 2020 allowance $88.4 million, or 9.42%. The decrease in energy allowance includes a $82.5 million decrease in reserves on loans transferred to held for sale as of the end of the quarter. Oil prices have improved from the prior quarter, but the impact to global demand due to the coronavirus is expected to impact prices throughout the forecast period.

The allowance for credit losses on the commercial nonenergy portfolio increased to ~~$350.5~~$357.2 million, or ~~2.01%,~~2.08% of that portfolio, at ~~June~~September 30, 2020 compared to the ~~March 31,~~June 30, 2020 allowance of ~~$291.3~~$350.5 million, or ~~1.88%~~2.01%. The commercial nonenergy portfolio includes concentration in lessors of real estate to various ~~impacted~~pandemic-impacted industries including hospitality and tourism which includes hotels, restaurants, and bars, certain nonessential healthcare, certain types of retail outlets, and other industries that have been significantly impacted by the widespread shutdown. The increase in allowance is primarily due to individually evaluated reserves, largely in the healthcare sector, with increased coverage reflecting declining loan balances as demand has been limited throughout the footprint. The allowance for credit losses on the energy portfolio increased to $21.4 million, or 6.33% of that portfolio, compared to the June 30, 2020 allowance of $19.9 million, or 5.66%, with the increase also due to individually evaluated credits. Our residential mortgage reserve for credit loss ~~increased~~decreased to $51.8 million, or 1.88%, at September 30, 2020, compared to $57.4 million, or 2.02%, at June 30, 2020, ~~compared~~due primarily to ~~$48.2 million, or 1.63%, at March 31, 2020.~~favorable movement in forecasted variables for home prices. Our allowance for credit losses on the consumer portfolio was $49.8 million, or 2.56 %, at September 30, 2020, compared to $51.5 million, or 2.52 %, at June 30, ~~2020, compared to $47.1 million, or 2.19%, at March 31,~~ 2020.

Criticized commercial loans totaled $412 million at September 30, 2020, up from $348 million at June 30, ~~2020, down from $530 million at March 31,~~ 2020. The ~~decrease~~increase in commercial criticized loans includes ~~$173~~$39 million attributable to the commercial nonenergy portfolio and $25 million attributable to the energy portfolio ~~due~~and was largely ~~to the energy loan sale, and $9 million attributable to the commercial non energy portfolio.~~concentrated in pandemic-impacted portfolios. 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. The Company routinely assesses the ratings of loans in its portfolio through an established and comprehensive portfolio management process. In addition, the Company often looks at portfolios of loans to determine if there are areas of risk not specifically identified in its loan by loan approach. In alignment with regulatory guidance, we have been working with our customers by providing various types of loan deferrals to manage the effects of economic stress. AsWhile a significant number of these deferrals ~~expire~~have expired, our ability to predict future cash flow is limited due to economic uncertainty, and ~~more information regarding borrower’s individual circumstances,~~ we expect that further risk rating adjustments may be required.

Net charge-offs were ~~$302.7~~$24.0 million, or ~~5.30%~~.43% of average total loans on an annualized basis in the ~~second~~third quarter of 2020, ~~up from $43.8~~compared to $302.7 million, or ~~0.83%~~5.30% of average total loans in the ~~first~~second quarter of 2020. Commercial net charge-offs totaled ~~$299.4~~$23.2 million in the ~~second~~third quarter of 2020, upconsisting largely of charges related to healthcare-dependent credits. This compared to ~~$39.5 million in the first quarter of 2020. The increase in~~ second quarter commercial charge-offs of ~~2020 charge-offs is largely due to~~$299.4 million, which included $242.6 million of charge-offs from the energy loan ~~sale in the amount of $242.6 million.~~sale. Our residential mortgage portfolio ~~had a $0.5~~reflected minimal net recoveries in both the third and second quarters of 2020 and consumer net charge-offs were $1.1 million in the third quarter of 2020, down from $3.9 million in the prior quarter. Third quarter 2020 consumer charge-offs were favorably impacted by loan deferrals and are expected to return to more normalized levels in the near term.

million net recovery in the second quarter of 2020 compared to a net recovery of less than $0.1 million in the first quarter of 2020. Consumer net charge-offs were $3.9 million in the second quarter of 2020, down from $4.3 million in the prior quarter.

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

	Three Months Ended									Six Months Ended						Three Months Ended									Nine Months Ended
	June 30,			March 31,			June 30,			June 30,						September 30,			June 30,			September 30,			September 30,
(in thousands)	2020			2020			2019			2020			2019			2020			2020			2019			2020			2019
Provision and Allowance for Credit Losses
Allowance for loan losses:
Allowance for loan losses at beginning of period	$	426,003		$	191,251		$	194,688		$	191,251		$	194,514		$	442,638		$	426,003		$	195,625		$	191,251		$	194,514
Loans charged-off:
Commercial non real estate		298,853			40,713			5,309			339,566			21,653			24,557			298,853			11,729			364,123			33,382
Commercial real estate - owner-occupied		1,192			514			71			1,706			71			122			1,192			66			1,828			137
Total commercial & industrial		300,045			41,227			5,380			341,272			21,724			24,679			300,045			11,795			365,951			33,519
Commercial real estate - income producing		671			830			—			1,501			10			710			671			—			2,211			10
Construction and land development		5			—			—			5			—			2			5			7			7			7
Total commercial		300,721			42,057			5,380			342,778			21,734			25,391			300,721			11,802			368,169			33,536
Residential mortgages		—			141			33			141			439			29			-			221			170			660
Consumer		5,196			5,540			3,936			10,736			8,167			2,904			5,196			5,002			13,640			13,169
Total charge-offs		305,917			47,738			9,349			353,655			30,340			28,324			305,917			17,025			381,979			47,365
Recoveries of loans previously charged-off:
Commercial non real estate		1,073			2,226			804			3,299			2,730			1,532			1,073			2,932			4,831			5,662
Commercial real estate - owner-occupied		26			81			204			107			221			552			26			63			659			284
Total commercial & industrial		1,099			2,307			1,008			3,406			2,951			2,084			1,099			2,995			5,490			5,946
Commercial real estate - income producing		39			7			—			46			2			—			39			516			46			518
Construction and land development		217			234			86			451			97			98			217			11			549			108
Total commercial		1,355			2,548			1,094			3,903			3,050			2,182			1,355			3,522			6,085			6,572
Residential mortgages		549			212			104			761			266			317			549			167			1,078			433
Consumer		1,329			1,214			1,000			2,543			2,004			1,817			1,329			862			4,360			2,866
Total recoveries		3,233			3,974			2,198			7,207			5,320			4,316			3,233			4,551			11,523			9,871
Total net charge-offs		302,684			43,764			7,151			346,448			25,020			24,008			302,684			12,474			370,456			37,494
Provision for loan losses		319,319			229,105			8,088			548,424			26,131			30,044			319,319			12,421			578,468			38,552
Cumulative effect of change in accounting principle (a)		—			49,411			—			49,411			—			—			-			—			49,411			—
Allowance for loan losses at end of period	$	442,638		$	426,003		$	195,625		$	442,638		$	195,625		$	448,674		$	442,638		$	195,572		$	448,674		$	195,572
Reserve for Unfunded Lending Commitments:
Reserve for Unfunded Lending Commitments at beginning of period	$	48,992		$	3,974		$	—		$	3,974		$	—		$	36,571		$	48,992		$	—		$	3,974		$	—
Cumulative effect of change in accounting principle (a)		—			27,330			—			27,330			—			—			—			—			27,330			—
Provision for losses on unfunded lending commitments		(12,421	)		17,688			—			5,267			—			(5,045	)		(12,421	)		—			222			—
Reserve for unfunded lending commitments at end of period	$	36,571		$	48,992		$	—		$	36,571		$	—		$	31,526		$	36,571		$	—		$	31,526		$	—
Total Allowance for Credit Losses	$	479,209		$	474,995		$	195,625		$	479,209		$	195,625		$	480,200		$	479,209		$	195,572		$	480,200		$	195,572
Total Provision for Credit Losses	$	306,898		$	246,793		$	8,088		$	553,691		$	26,131		$	24,999		$	306,898		$	12,421		$	578,690		$	38,552
Ratios:
Gross charge-offs to average loans		5.36	%		0.90	%		0.19	%		3.22	%		0.30	%		0.50	%		5.36	%		0.33	%		2.30	%		0.31	%
Recoveries to average loans		0.06	%		0.08	%		0.04	%		0.07	%		0.05	%		0.08	%		0.06	%		0.09	%		0.07	%		0.07	%
Net charge-offs to average loans		5.30	%		0.83	%		0.14	%		3.15	%		0.25	%		0.43	%		5.30	%		0.25	%		2.23	%		0.25	%
Allowance for loan losses to period-end loans		1.96	%		1.98	%		0.97	%		1.96	%		0.97	%		2.02	%		1.96	%		0.93	%		2.02	%		0.93	%
Allowance for credit losses to period-end loans																	2.16	%		2.12	%		0.93	%		2.16	%		0.93	%
For informational purposes - included above
Provision for credit loss associated with energy	$	160,101		$	—		$	—		$	160,101		$	—		$	—		$	160,101		$	—		$	160,101		$	—
Charge-offs associated with energy loan sale	$	242,628		$	—		$	—		$	242,628		$	—		$	—		$	242,628		$	—		$	242,628		$	—

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

	June 30,			December 31,			September 30,			December 31,
(in thousands)	2020			2019			2020			2019
Loans accounted for on a nonaccrual basis: (a)
Commercial non-real estate	$	40,336		$	49,628		$	41,401		$	49,628
Commercial non-real estate - restructured		53,135			129,050			36,783			129,050
Total commercial non-real estate		93,471			178,678			78,184			178,678
Commercial real estate - owner occupied		13,829			7,413			14,394			7,413
Commercial real estate - owner-occupied - restructured		291			295			289			295
Total commercial real estate - owner-occupied		14,120			7,708			14,683			7,708
Commercial real estate - income producing		7,081			2,489			6,932			2,489
Commercial real estate - income producing - restructured		99			105			96			105
Total commercial real estate - income producing		7,180			2,594			7,028			2,594
Construction and land development		2,453			1,051			3,192			1,051
Construction and land development - restructured		45			166			42			166
Total construction and land development		2,498			1,217			3,234			1,217
Residential mortgage		40,615			36,638			40,865			36,638
Residential mortgage - restructured		1,622			2,624			2,731			2,624
Total residential mortgage		42,237			39,262			43,596			39,262
Consumer		24,473			16,159			24,737			16,159
Consumer - restructured		—			215			—			215
Total consumer		24,473			16,374			24,737			16,374
Total nonaccrual loans	$	183,979		$	245,833		$	171,462		$	245,833
Restructured loans - still accruing:
Commercial non-real estate	$	5,236		$	59,136		$	5,195		$	59,136
Commercial real estate - owner occupied		—			—			—			—
Commercial real estate - income producing		360			373			357			373
Construction and land development		125			111			123			111
Residential mortgage		2,949			514			2,308			514
Consumer		1,178			1,131			1,132			1,131
Total restructured loans - still accruing		9,848			61,265			9,115			61,265
Total nonperforming loans		193,827			307,098			180,577			307,098
ORE and foreclosed assets		18,724			30,405			11,640			30,405
Total nonperforming assets (b)	$	212,551		$	337,503		$	192,217		$	337,503
Loans 90 days past due still accruing to loans (c)	$	5,230		$	6,582		$	10,439		$	6,582
Total restructured loans	$	65,040		$	193,720		$	49,056		$	193,720
Ratios:
Nonperforming assets to loans plus ORE and foreclosed assets		0.94	%		1.59	%		0.86	%		1.59	%
Allowance for loan losses to nonperforming loans and accruing loans 90 days past due		222.37	%		60.97	%		234.89	%		60.97	%
Loans 90 days past due still accruing to loans		0.02	%		0.03	%		0.05	%		0.03	%

Nonperforming assets totaled ~~$212.6~~$192.2 million at September 30, 2020, down $20.3 million from June 30, 2020, ~~down $94.2 million from March 31, 2020,~~ and ~~$125.0~~$145.3 million from December 31, 2019. Nonperforming loans decreased approximately ~~$70.1~~$13.3 million compared to ~~March~~June 30, 2020, and $126.5 million from December 31, ~~2020, due largely to partial charge-offs and the energy loan sale, partially offset by new downgrades. Our~~2019. The decline in nonperforming loans ~~included $9.8 million of accruing restructured loans, also down~~compared to the prior quarter was largely due to charge-offs, while the decrease from year-end was primarily due to the energy loan sale. ORE and foreclosed assets ~~increased modestly~~decreased to $11.6 million at September 30, 2020, from $18.7 million at June 30, 2020, ~~from $18.5~~and $30.4 million at ~~March~~December 31, ~~2020, and decreased $11.7 million~~2019. The decrease compared to ~~December 31, 2019, due primarily to~~year-end includes the first quarter 2020 write-downs ~~totaling $9.8 million~~ of equity interest in two energy-related companies received in borrower bankruptcy restructurings

~~restructurings~~ on two energy ~~credits.~~credits totaling $9.8 million. Nonperforming assets as a percent of total loans, ORE and other foreclosed assets was ~~0.96%~~0.86% at September 30, 2020, down 8 bps from June 30, 2020, ~~down 55 bps from March 31, 2020~~ and 6573 bps from December 31, 2019.

Short-term liquidity assets are held to ensure funds are available to meet the cash flow needs of both borrowers and depositors. Short-term liquidity investments, including interest-bearing bank deposits and federal funds sold, were ~~$760.2~~$779.1 million at ~~June~~September 30, 2020, ~~down $116.1 million from March 31, 2020 and~~ up ~~$609.1~~$18.9 million from June 30, 2020 and $729.5 million from September 30, 2019. ~~The increase from prior year was to provide additional liquidity in order to meet clients’ needs during the economic impact of the pandemic. Normally~~Typically, these balances will change on a daily basis depending upon movement in customer loan and deposit accounts. Average short-term investments of ~~$837.2~~$503.0 million for the ~~second~~third quarter of 2020 were ~~up $630.4 million compared to the first quarter of 2020, and $608.7~~down $334.3 million compared to the second quarter of 2020, and up $322.5 million compared to the third quarter of 2019.

Deposits provide the most significant source of funding for our interest earning assets. Our ability to compete for market share depends on our deposit pricing and our wide range of products and services ~~focusing~~that are focused on customer needs. In order to meet our ~~customer~~customers’ needs, we offer high-quality banking services ~~along~~ with convenient ~~services such as~~delivery channels, including online and mobile banking. We provide specialized services to our commercial customers to promote commercial deposit growth. These services include treasury management, industry expertise and lockbox services.

Total deposits were ~~$27.3~~$27.0 billion at September 30, 2020, down $291.6 million, or 1%, from June 30, 2020, ~~up $2.3~~primarily driven by a decrease in certificates of deposit, both retail and brokered. Total deposits increased $2.8 billion, or 9%12%, from ~~March 31, 2020,~~September 30, 2019, primarily due to strong growth in noninterest-bearing deposits, largely the result of ~~the~~ proceeds from PPP loan funding being held in deposit accounts and higher account balances due to other economic stimulus. Total deposits increased $4.1 billion, or 18%, from June 30, 2019, primarily due to previously mentioned strong growth in noninterest-bearing deposits and the impact of approximately $1.3 billion of deposits assumed from the MidSouth acquisition in third quarter of 2019.remaining on deposit. Average deposits for the ~~second~~third quarter of 2020 were ~~$26.7~~$26.8 billion, up ~~$2.4 billion,~~$61.2 million, or ~~10%, from the first quarter of 2020 and up $3.6 billion, or 15%~~less than 1%, from the second quarter of 2020 and up $3.7 billion, or 16%, from the third quarter of 2019.

Noninterest-bearing demand deposits were ~~$11.8~~$11.9 billion at ~~June~~September 30, 2020, up ~~$2.6 billion,~~$122.5 million, or ~~28%, from March 31, 2020, and $3.6 billion, or 45%~~1%, from June 30, 2020, and $3.2 billion, or 37%, from September 30, 2019. ~~As noted above, the linked-quarter increase was~~The continued elevated balances are primarily due to ~~proceeds from PPP loans temporarily being held in noninterest-bearing demand deposit accounts.~~residual impacts of the stimulus response to the pandemic. We expect the balance to decline ~~over~~during the ~~next two quarters~~fourth quarter as these funds are utilized. The year over year increase reflects the ~~deposits~~deposit of ~~the~~ proceeds from ~~the~~ PPP loans funded primarily during the second quarter of ~~2020 as well as the noninterest-bearing demand deposits assumed in the MidSouth acquisition.~~2020. Noninterest-bearing demand deposits comprised ~~43%~~44% of total deposits at September 30, 2020, 43% at June 30, 2020 ~~37%~~and 36% at ~~March 31, 2020 and 35% at June~~September 30, 2019.

Interest-bearing transaction and savings accounts of ~~$9.6~~$10.0 billion at ~~June~~September 30, 2020 increased ~~$674.1~~$366.6 million, or ~~8%, from March 31, 2020 and $1.6 billion, or 20%~~4%, from June 30, ~~2019, with~~2020 and $1.2 billion, or 14%, from September 30, 2019. These increases were primarily driven by movement from maturing certificates of deposit in the ~~year-over-year increase mainly attributable to deposits from the MidSouth acquisition.~~low interest rate environment, as well as PPP loan proceeds that remain in customer accounts.

Interest-bearing public fund deposits totaled ~~$3.3~~$3.2 billion at ~~June~~September 30, 2020, ~~up $74.6 million, or 2%, from March 31, 2020, and $166.2~~down $149.8 million, or 5%, from June 30, 2020, and up $221.3 million, or 7%, from September 30, 2019. Time deposits other than public funds totaled ~~$2.6~~$2.0 billion at September 30, 2020, down $630.9 million, or 24%, from June 30, 2020, ~~down $989.3 million, or 27%, from March 31, 2020, driven primarily by~~with a ~~$581~~$392.2 million decrease in brokered certificates of deposit and a ~~$405.7~~$238.7 million decrease in retail certificates of deposits. The decrease in time deposits ~~resulting~~resulted from higher level of maturities and slower production due to the pandemic. Maturing brokered deposits were not replaced due to excess liquidity. Time deposits other than public funds were down ~~$1.2~~$1.8 billion, or ~~33%~~47%, from ~~June~~September 30, 2019, ~~largely due to~~with a decrease of ~~$767.0~~$936.4 million in brokered certificates of deposit and ~~$525.7~~$863.6 million in retail certificates of deposits.

At ~~June~~September 30, 2020, short-term borrowings totaled ~~$1.8~~$1.9 billion, ~~down $918~~up $152 million, or ~~34%~~9%, from ~~March 31,~~June 30, 2020 ~~with a decrease~~driven by an increase in repurchase agreements. Short-term borrowings decreased $201.9 million, or 10%, from September 30, 2019, mainly due to decreases of ~~$760~~$337.5 million in FHLB borrowings and ~~a $329.8~~$125.2 million ~~decrease~~ in federal funds purchased, partially offset by ~~a $171.3~~an increase of $260.7 million ~~increase~~ in repurchase agreements. The linked-quarter decrease in FHLB borrowings was due to scheduled maturities that were not replaced and prepayments. Short-term borrowings increased $113.3 million, or 7%, from June 30, 2019, mainly due to increased FHLB borrowings.

Average short-term borrowings of ~~$2.3~~$1.7 billion in the ~~second~~third quarter of 2020 were ~~up $104.6~~down $521.4 million, or ~~5%, compared to the first quarter of 2020, and up $637.0 million, or 39%~~23%, compared to the second quarter of 2020, and $330.0 million, or 16%, compared to the third quarter of 2019.

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 certain residential mortgage and commercial real estate loans included in the Bank’s loan portfolio, subject to specific criteria.

Long-term debt totaled ~~$386~~$385.9 million at September 30, 2020 and $386.3 million at June 30, 2020, compared to ~~$226~~$246.6 million at ~~March 31, 2020 and $233 million at June~~September 30, 2019. On June 9, 2020, the Parent completed the issuance of subordinated notes payable with an aggregate principal amount of $172.5 million with a stated maturity of June 15, 2060. The notes accrue interest at a fixed rate of 6.25% per annum, with quarterly interest payments ~~beginning~~that began September 15, 2020. Subject to prior approval by the Federal Reserve, the Company may redeem the notes in whole or in part on any interest payment date on or after June 15, 2025. This debt qualifies as tier 2 capital in the calculation of certain regulatory capital ratios.

Long-term debt also includes subordinated notes payable with an aggregate principal amount of $150 million with a stated maturity of June 15, 2045with a fixed rate of 5.95% per annum. Subject to prior approval by the Federal Reserve, the Company may redeem these notes in whole or in part on any of its quarterly interest payment dates after June 15, 2020. This debt also qualifies as tier 2 capital in the calculation of certain regulatory capital ratios. The remaining long-term debt is comprised primarily of borrowings associated with tax credit fund activities.

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. At ~~June~~September 30, 2020, the Company had a reserve for unfunded lending commitments totaling ~~$36.6~~$31.5 million.

The following table shows the commitments to extend credit and letters of credit at ~~June~~September 30, 2020 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	$	7,995,491	$	3,765,697	$	1,806,895	$	1,551,355	$	871,544	$	7,803,139	$	3,794,225	$	1,756,576	$	1,415,153	$	837,185
Letters of credit		369,848		272,344		52,761		44,743		—		369,538		279,980		81,560		7,998		—
Total	$	8,365,339	$	4,038,041	$	1,859,656	$	1,596,098	$	871,544	$	8,172,677	$	4,074,205	$	1,838,136	$	1,423,151	$	837,185

On January 1, 2020, the Company adopted Accounting Standards Codification (“ASC”) 326, “Financial Instruments – Credit Losses,” more commonly referred to as “CECL.” The provisions of this guidance required a material change to the manner in which the Company estimates and reports losses on financial instruments. Changes to the Company’s accountings policies related to CECL are disclosed in Note 1 – Basis of Presentation – Critical Accounting Estimates, with further discussion of changes to significant accounting estimates noted below. Further, the Company performed a quantitative interim test of goodwill impairment during the ~~three~~nine months ended ~~June~~September 30, 2020. There were no other 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, 2019.

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.

The allowance for credit losses is established in accordance with the CECL standard which introduces several additional subjective inputs to the allowance estimation process. The standard requires that management incorporate an economic forecast for a reasonable and supportable period, which is two years based on our current policy. The Company utilizes third party forecasts that consist of multiple economic scenarios, including a baseline, with a probability distribution of 50% better or worse economic performance and various upside and downside scenarios utilized at an aggregated state (or regional) levels across our footprint or national level, depending on the portfolio. The economic forecasts are generally lagging and may not incorporate all events and circumstances through the financial statement date. The Company’s management considers available forecasts, current events not captured and our specific portfolio characteristics and applies weights to the scenario output based on a best estimate of likely of outcomes. During ~~the first half of~~ 2020, the United States and global financial markets experienced unprecedented volatility, with significant uncertainty surrounding the pandemic, ~~and the resulting widespread~~including varying degrees of economic shutdown ~~as well as~~and a significant and sustained decline in oil prices. ~~Portions of our footprint have reversed course on planned phased economic reopening or have delayed transitioning to the next phase.~~ The lack of a vaccine or decidedly effective medical treatment for the virus has significantly reduced travel and impaired tourism and trade, which has deteriorated the ~~gulf coast~~Gulf Coast economy. ~~Rapidly changing~~Changing economic conditions and resulting government response in the form of interest rate adjustments and several current and expected future stimulus packages have introduced enhanced estimation uncertainty in the forecasts used to estimate expected credit loss. Our credit loss models were built using historical data that may not correlate to ~~this unprecedented pandemic~~ economic ~~shutdown.~~conditions stemming from the pandemic. The estimate of the life of a loan considers both contractual cash flows as well as estimated prepayments and forecasted draws on unfunded loan commitments that were also built on historical data that may react differently given the current environment. Such forecasted information is inherently uncertain, particularly in the volatile environment resulting from the pandemic. Forecast uncertainty includes the severity of the impact to local and global economic conditions as well as the timing of recovery, among other things. Therefore, actual ~~result~~results may differ significantly from management’s estimates.

The quantitative loss rate analysis is supplemented by a review of qualitative factors that considers whether conditions differ from those existing during the historical periods used in the development of the credit loss models. Such factors include, but are not limited to, problem loan trends, changes in loan profiles and volumes, changes in lending policies and procedures, current economic and business conditions, credit concentrations, model limitations and other factors not captured by our models. While quantitative data for these factors is used where available, there is a high level of judgment applied in these processes.

For credits that are individually evaluated, a specific allowance is calculated as the shortfall between the credit’s value and the bank’s exposure. The loan’s value is measured by either the loan’s observable market price, the fair value of the collateral of the loan (less liquidation costs) if it is collateral dependent, or by the present value of expected future cash flows discounted at the loan’s effective interest rate. Collateral on impaired loans includes, but is not limited to, commercial and residential real estate, oil and gas reserves, marine vessels, accounts receivable and other corporate assets. Values for impaired credits are highly subjective and based on information available at the time of valuation and the current resolution strategy. These values are difficult to assess and have heightened uncertainty resulting from the impact of the pandemic on market conditions. Actual results could differ from these estimates.

Management considers the appropriateness of these critical assumptions as part of its allowance review and believes the ACL level is appropriate based on information available through the financial statement date. Refer to Note 4 – Loans and Allowance for Credit Losses for further discussion of significant assumptions used in the current allowance calculation.

Goodwill, which represents the excess of cost over the fair value of the net assets of an acquired business, is not amortized but is assessed for impairment on an annual basis, or more often if events or circumstances indicate that it is more likely than not that a goodwill impairment exists. The Company completed its annual impairment test of goodwill as of September 30, 2019 by performing a qualitative (“Step Zero”) assessment. The qualitative assessment involved the examination of changes in macroeconomic conditions,

industry and market conditions, overall financial performance, cost factors and other relevant entity-specific events, including changes in management and other key personnel and changes in the share price of the Company’s common stock. As a result of the assessment, the Company concluded that its goodwill was not impaired.

operating losses driven by a higher provision for credit losses and a lower interest rate environment, and a sustained decrease in the ~~Company’s~~ share ~~price.~~price of the Company. As such, the Company performed a quantitative assessment of goodwill impairment as of ~~June~~September 30, 2020, which included determining the estimated fair value of the reporting unit and comparing that fair value to the reporting unit's carrying amount. The results of the test indicated that the estimated fair value of the reporting unit exceeded its carrying amount at ~~June~~September 30, 2020; therefore, goodwill was not impaired as of the testing date.

~~Each of the~~Both valuation techniques employed by the Company ~~requires~~require significant assumptions. Depending upon the specific approach, assumptions are made regarding the economic environment, expected net interest margins, growth rates, discount ~~rates for~~rate used to present value future cash flows, asset quality metrics, control premiums, and price-to-forward earnings multiples. Changes to any one of these assumptions could result in significantly different results. ~~A significant decline~~Changes in the amount and/or timing of Company’s expected future cash flows or estimated growth rates, lack of improvement and/or ~~a prolonged~~further decline in the price of the Company’s common stock ~~due~~relative to our book value per share, and/or further deterioration in the economic environment beyond current estimates could result in an impairment charge to goodwill in future reporting periods. Annual impairment testing will be performed in the fourth quarter of 2020 in coordination with a more robust corporate-wide annual budget process and interim testing is expected to continue until indicators of goodwill impairment no longer exist.

Refer to Note 16 to our ~~Consolidated Financial Statements~~consolidated financial statements included elsewhere in this report.

The Company’s net income is materially dependent upon 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 ~~June~~September 30, 2020. Shifts are measured in 100 basis point increments in a range from -500 to +500 basis points from base case, with +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 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)
+100		3.02	%		5.77	%		3.10	%		6.23	%
+200		7.19	%		12.93	%		7.04	%		13.05	%
+300		11.20	%		19.61	%		10.80	%		19.36	%

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 to be 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.

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 that it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. Working groups comprised of various regulators and other industrygroups have been formed in the United States and other countries in order to provide guidance on this topic. In particular, the Alternative Reference Rates Committee (“ARRC”) has proposed that the Secured Overnight Financing Rate (“SOFR”) is the rate that represents best practice as the alternative to LIBOR for use in derivatives and other financial contracts that are currently indexed to LIBOR. The ARRC has also published recommended fallback language for LIBOR-linked financial instruments, among numerous other areas of guidance. ARRC has proposed a paced market transition plan to SOFR from LIBOR, and organizations are currently working on industry-wide and company-specific transition plans as it relates to derivatives and cash markets exposed to LIBOR. However, at this time, no consensus exists as to what rate or rates may become acceptable alternatives to LIBOR and it is impossible to predict the effect of any such alternatives on the value of LIBOR-based securities and variable rate loans, debentures, or other securities or financial arrangements, given LIBOR’s role in determining market interest rates globally.

Management has established a LIBOR Transition Working Group (the “Group”) whose purpose is to direct the overall transition process for the Company. The Group is an internal, cross-functional team with representatives from business lines, support and control functions and legal counsel. During the third quarter of 2019, key provisions in our loan documents were modified to ensure new and renewed loans include appropriate pre-cessation trigger language and LIBOR fallback language for transition from LIBOR to the new benchmark when such transition occurs. All direct exposures resulting from existing financial contracts that mature after 2021 have been inventoried and are monitored on an ongoing basis. Remediation of these exposures will be consistent with industry timing. The Group has also inventoried indirect LIBOR exposures within the Company's systems, models and processes. The results of this assessment will drive development and prioritization of remediation plans, and the Group is continuing to monitor developments and taking steps to ensure readiness when the LIBOR benchmark rate is discontinued.

At ~~June~~September 30, 2020, approximately ~~32%~~28% 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, the Company began transition activities by modifying documents to include pre-cessation fallback trigger language in all new and renewed loan and derivative transactions that reference LIBOR. Our Libor transition team is continuing to monitor developments and is taking steps to ensure readiness when the LIBOR benchmark rate is discontinued.

In connection with the preparation of this Quarterly Report on Form 10-Q, an evaluation was carried out by the Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of ~~June~~September 30, 2020, 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 ~~June~~September 30, 2020, that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting. Consideration by management was given to operational changes that were made in response to the COVID-19 pandemic.

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, 2019. 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. The following risk factors have been included in this Quarterly Report on Form 10-Q in response to the global market disruptions that have resulted from the COVID-19 pandemic.

The COVID-19 pandemic has adversely impacted our business and financial results, and the ultimate impact will depend on future developments, which are highly uncertain and cannot be predicted, including the scope and duration of the pandemic and actions taken by governmental authorities in response to the pandemic.

The COVID-19 pandemic has created and will likely continue to create extensive disruptions to the global economy and to the lives of individuals throughout the world. Governments, businesses, and the public are taking unprecedented actions to contain the spread of COVID-19 and to mitigate its effects, including quarantines, travel bans, shelter-in-place orders, closures of businesses and schools, fiscal stimulus, and legislation designed to deliver monetary aid and other relief. While the scope, duration, and full effects of COVID-19 are rapidly evolving and not fully known, the pandemic and related efforts to contain it have disrupted global economic activity, adversely affected the functioning of financial markets, impacted interest rates, increased economic and market uncertainty, and disrupted trade and supply chains. If these effects continue for a prolonged period or result in sustained economic stress or recession, many of the risk factors identified in the “Risk Factors” section included in our Annual Report on Form 10-K for the year ended December 31, 2019 could be exacerbated and such effects could have a material adverse impact on us in a number of ways related to credit, collateral, customer demand, funding, operations, interest rate risk, liquidity and litigation, as described in more detail below.

Credit Risk. Our risks of timely loan repayment and the value of collateral supporting the loans are affected by the strength of our borrowers’ business. Concern about the spread of COVID-19 has caused and is likely to continue to cause business shutdowns, limitations on commercial activity and financial transactions, labor shortages, supply chain interruptions, increased unemployment and commercial property vacancy rates, reduced profitability and ability for property owners to make mortgage payments, and overall economic and financial market instability, all of which may cause our customers to be unable to make scheduled loan payments. If the effects of COVID-19 result in widespread and sustained repayment shortfalls on loans in our portfolio, we could incur significant delinquencies, foreclosures and credit losses, particularly if the available collateral is insufficient to cover our exposure. The future effects of COVID-19 on economic activity could negatively affect the collateral values associated with our existing loans, the ability to liquidate the real estate collateral securing our residential and commercial real estate loans, our ability to maintain loan origination volume and to obtain additional financing, the future demand for or profitability of our lending and services, and the financial condition and credit risk of our customers. Further, in the event of delinquencies, regulatory changes and policies designed to protect borrowers may slow or prevent us from making our business decisions or may result in a delay in our taking certain remediation actions, such as foreclosure. In addition, we have unfunded commitments to extend credit to customers. During a challenging economic environment, increased borrowings under these commitments could adversely impact our liquidity. Furthermore, in an effort to support our communities during the pandemic, we are participating in the Paycheck Protection Program (“PPP”) under the CARES Act whereby loans to small businesses are made and those loans are subject to the regulatory requirements that would require forbearance of loan payments for a specified time or that could limit our ability to pursue all available remedies in the event of a loan default. If the borrower under the PPP loan fails to qualify for loan forgiveness, or if the SBA determines there is a deficiency in the manner in which any PPP loans were originated, funded or serviced by the Bank, we are subject to repayment risk as well as the heightened risk of holding these loans at unfavorable interest rates as compared to loans to customers that we would have otherwise extended credit.

Strategic Risk. Our financial condition and results of operations may be affected by a variety of external factors that may affect the price or marketability of our products and services, changes in interest rates that may increase our funding costs, reduced demand for our financial products due to economic conditions and the various response of governmental and nongovernmental authorities. The COVID-19 pandemic has significantly increased economic and demand uncertainty and has led to severe disruption

and volatility in the global capital markets. Furthermore, many of the governmental actions in response to the pandemic have been

directed toward curtailing household and business activity to contain COVID-19. These actions have been rapidly changing. For example, in many of our markets, local governments have acted to temporarily close or restrict the operations of most businesses. The future effects of COVID-19 on economic activity could negatively affect the future banking products we provide, including a decline in loan originations.

Operational Risk. Current and future restrictions on our workforce’s access to our facilities could limit our ability to meet customer servicing expectations and have a material adverse effect on our operations. We rely on business processes and branch activity that largely depend on people and technology, including access to information technology systems as well as information, applications, payment systems and other services provided by third parties. In response to COVID-19, we have modified our business practices with a portion of our employees working remotely from their homes to have our operations uninterrupted as much as possible. Further, technology in employees’ homes may not be as robust as in our offices and could cause the networks, information systems, applications, and other tools available to employees to be more limited or less reliable than in our offices. The continuation of these work-from-home measures also introduces additional operational risk, including increased cybersecurity risk. These cyber risks include greater phishing, malware, and other cybersecurity attacks, vulnerability to disruptions of our information technology infrastructure and telecommunications systems for remote operations, increased risk of unauthorized dissemination of confidential information, limited ability to restore the systems in the event of a systems failure or interruption, greater risk of a security breach resulting in destruction or misuse of valuable information, and potential impairment of our ability to perform critical functions, including wiring funds, all of which could expose us to risks of data or financial loss, litigation and liability and could seriously disrupt our operations and the operations of any impacted customers.

Moreover, we rely on many third parties in our business operations, including the appraiser of the real property collateral, vendors that supply essential services such as loan servicers, providers of financial information, systems and analytical tools and providers of electronic payment and settlement systems, and local and federal government agencies, offices, and courthouses. In light of the developing measures responding to the pandemic, many of these entities may limit the availability and access of their services. For example, loan origination could be delayed due to the limited availability of real estate appraisers for the collateral. Loan closings could be delayed related to reductions in available staff in recording offices or the closing of courthouses in certain counties or parishes, which slows the process for title work, mortgage and UCC filings in those counties or parishes. If the third-party service providers continue to have limited capacities for a prolonged period or if additional limitations or potential disruptions in these services materialize, it may negatively affect our operations.

Further, we use quantitative models to help manage certain aspects of our business and to assist with certain business decisions, including estimating credit losses, grading loans and extending credit, estimating the effects of changing interest rates and other market measures on our financial condition and results of operations. Our modeling methodologies rely on many assumptions, historical analyses and correlations. These assumptions may be incorrect, particularly in times of market distress, as we have experienced and expect to continue to experience as a result of the COVID-19 pandemic, and the historical correlations on which we rely may not continue to be relevant. As a result, our models may not capture or fully express the risks we face or may lead us to misjudge the business and economic environment in which we operate. If our models fail to produce reliable results on an ongoing basis, we may not make appropriate risk management or other business or financial decisions. Furthermore, strategies that we employ to manage and govern the risks associated with our use of models may not be effective or fully reliable, and as a result, we may realize losses or other lapses.

If our models fail to produce reliable results on an ongoing basis, we may not make appropriate risk management or other business or financial decisions. Furthermore, strategies that we employ to manage and govern the risks associated with our use of models may not be effective or fully reliable, and as a result, we may realize losses or other lapses.

Interest Rate Risk. Our net interest income, lending activities, deposits and profitability are and are likely to continue to be negatively affected by volatility in interest rates caused by uncertainties stemming from COVID-19. In March 2020, the Federal Reserve lowered the target range for the federal funds rate to a range from 0 to 0.25 percent, citing concerns about the impact of COVID-19 on markets and stress in the energy sector. A prolonged period of extremely volatile and unstable market conditions would likely increase our funding costs and negatively affect market risk mitigation strategies. Higher income volatility from changes in interest rates and spreads to benchmark indices will likely cause a loss of future net interest income and a decrease in current fair market values of our assets. Fluctuations in interest rates will impact both the level of income and expense recorded on most of our assets and liabilities and the market value of all interest-earning assets and interest-bearing liabilities, which in turn could have a material adverse effect on our net income, operating results, or financial condition.

Because there have been no comparable recent global pandemics that resulted in similar global impact, we do not yet know the full extent of and the long-term impact of COVID-19’s effects on our business, operations, or the global economy as a whole. Any future developments will be highly uncertain and cannot be predicted, including the scope and duration of the pandemic, the effectiveness of

our work from home arrangements, third party providers’ ability to support our operations, and any actions taken by governmental

authorities and other third parties in response to the pandemic. The uncertain future development of this crisis could materially and adversely affect our business, operations, operating results, financial condition, liquidity or capital levels.

Liquidity and Litigation Risk. Federal, state and local governments have mandated or encouraged financial services companies to make accommodations to borrowers and other customers affected by the COVID-19 pandemic. Legal and regulatory responses to concerns about the COVID-19 pandemic could result in additional regulation or restrictions affecting the conduct of our business in the future. In addition to the potential effects from negative economic conditions noted above, the Company instituted a program to help COVID-19 impacted customers. This program included waiving certain fees and charges and offering payment deferment and other loan relief, as appropriate, for customers impacted by COVID-19. The Company’s liquidity could be negatively impacted if a significant number of customers apply and are approved for the deferral of payments or request additional deferrals. In addition, if these deferrals are not effective in mitigating the effect of COVID-19 on the Company’s customers, it may adversely affect its business and results of operations more substantially over a longer period of time. A significant amount of the loan growth the Company experienced ~~during the second quarter~~year-to-date in 2020 was a direct result of PPP loans; this loan growth is likely to end in the near-term. Furthermore, since the inception of the PPP, a number of banks have been subject to litigation regarding the process and procedures that such banks used in processing applications for the PPP and claims related to agent fees. In addition, some banks have received negative media attention associated with the PPP. The Company and the Bank are exposed to similar litigation risk and negative media attention, from both customers and non-customers that approached the Bank regarding PPP loans, regarding its process and procedures used in processing applications for the PPP, or litigation from agents with respect to agent fees. If any such litigation against the Company or the Bank is not resolved in a manner favorable to the Company or the Bank, it may result in significant financial liability or adversely affect the Company’s reputation. In addition, litigation can be costly, regardless of outcome. Any financial liability, litigation costs or reputational damage caused by PPP related litigation or negative media attention could have a material adverse impact on our business, financial condition and results of operations.

The PPP has also attracted interest from federal and state enforcement authorities, oversight agencies, regulators and Congressional committees. State ~~Attorney Generals~~attorney generals and other federal and state agencies may assert that they are not subject to the provisions of the CARES Act and the PPP regulations entitling the Bank to rely on borrower certifications, and they may take more aggressive actions against the Bank for alleged violations of the provisions governing the Bank’s participation in the PPP. Federal and state regulators can impose or request that we consent to substantial sanctions, restrictions and requirements if they determine there are violations of laws, rules or regulations or weaknesses or failures with respect to general standards of safety and soundness, which could adversely affect our business, reputation, results of operation and financial condition.

Our loan portfolio contains several industry and collateral concentrations including, but not limited to, commercial and residential real estate, energy, healthcare and hospitality. Due to the exposure in these concentrations, disruptions in markets, economic conditions, including those resulting from the global response to COVID-19, changes in laws or regulations or other events could cause a significant impact on the ability of borrowers to repay and may have a material adverse effect on our business, financial condition and results of operations.

A substantial portion of our loan portfolio is secured by real estate. In weak economies, or in areas where real estate market conditions are distressed, we may experience a higher than normal level of nonperforming real estate loans. The collateral value of the portfolio and the revenue stream from those loans could come under stress, and additional provisions for the allowance for credit losses could be necessitated. Our ability to dispose of foreclosed real estate at prices at or above the respective carrying values could also be impaired, causing additional losses.

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.)

Hancock Whitney Plaza, 2510 14^th Street, 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) – ~~June~~September 30, 2020 and December 31, 2019	4
	Consolidated Statements of Income (unaudited) – Three and ~~Six~~Nine Months Ended ~~June~~September 30, 2020 and 2019	5
	Consolidated Statements of Comprehensive Income (unaudited) – Three and ~~Six~~Nine Months Ended ~~June~~September 30, 2020 and 2019	6
	Consolidated Statements of Changes in Stockholders’ Equity (unaudited) – Three and ~~Six~~Nine Months Ended ~~June~~September 30, 2020 and 2019	7
	Consolidated Statements of Cash Flows (unaudited) – ~~Six~~Nine Months Ended ~~June~~September 30, 2020 and 2019	8
	Notes to Consolidated Financial Statements (unaudited) – ~~June~~September 30, 2020 and 2019	9
ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	43
ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	7071
ITEM 4.	Controls and Procedures	7172
Part II. Other Information
ITEM 1.	Legal Proceedings	7274
ITEM 1A.	Risk Factors	7274
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	7577
ITEM 3.	Default on Senior Securities	N/A
ITEM 4.	Mine Safety Disclosures	N/A
ITEM 5.	Other Information	N/A
ITEM 6.	Exhibits	7577
Signatures		7678

(in thousands)
ASSETS
Cash and due from banks	$	28,059
Interest bearing bank deposits		276,911
Federal funds sold		3,475
Securities available for sale		272,240
Loans		787,628
Property and equipment		34,288
Other real estate		343
Identifiable intangible assets		31,500
Other assets		79,888
Total identifiable assets		1,514,332
LIABILITIES
Deposit liabilities		1,280,947
Short term borrowings		66,996
Long term debt		13,919
Other liabilities		21,990
Total liabilities		1,383,852
Net assets acquired		130,480
Value of stock-based consideration		193,849
Goodwill	$	63,369

	December 31, 2019
(in thousands)	Carrying Amount of Loans			Accretable Yield
Balance at beginning of period	$	129,596		$	37,294
Additions		120,562			6,246
Payments received, net		(48,076	)		(4,601	)
Accretion		13,163			(13,163	)
Decrease in expected cash flows based on actual cash flows and changes in cash flow assumptions		—			4,170
Balance at end of period	$	215,245		$	29,946

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

	Nine Months Ended September 30,
(in thousands)	2020		2019
Proceeds	$	211,919	$	143,304
Gross gains		1,984		—
Gross losses		1,496		—

(in thousands)	December 31, 2019		January 1, 2020		CECL adoption impact
Assets and Liabilities
Allowance for loan and lease losses	$	191,251	$	240,662	$	49,411
Reserve for unfunded lending commitments		3,974		31,304		27,330
Allowance for credit losses	$	195,225	$	271,966	$	76,741
Retained Earnings
Allowance for credit loss increase					$	76,741
Balance sheet reclassification						(19,767	)
Total pretax impact						56,974
Income tax impact						(12,888	)
Decrease to retained earnings					$	44,086

	June 30, 2020
(in millions)	Total Available		Amount Used		Net Availability
Internal Sources
Free Securities and Other	$	3,931	$	—	$	3,931
External Sources
Federal Home Loan Bank		6,193		2,587		3,606
Federal Reserve Bank		4,721		—		4,721
Brokered Deposits		4,098		498		3,600
Other		1,504		—		1,504
Total Liquidity	$	20,447	$	3,085	$	17,362



( $ in thousands )	Tier 1 (Concerned)		Tier 2 Limited Concern)		Tier 3 (No concern)		Total
Sectors under focus *
Healthcare and social assistance
Hospitals	$	289,880	$	—	$	—	$	289,880
Offices of physicians & dentists		—		478,037		—		478,037
Assisted living (investor CRE)		—		368,574		—		368,574
Assisted living (non- investor CRE)		—		210,289		—		210,289
All other healthcare		—		—		247,080		247,080
Total healthcare and social assistance		289,880		1,056,900		247,080		1,593,860
Hospitality
Hotel		522,234		—		—		522,234
Restaurants full service, casual dining and bars		370,848		—		—		370,848
Restaurants limited service		—		115,221		—		115,221
Entertainment		152,448		—		—		152,448
Total hospitality		1,045,530		115,221		—		1,160,751
Retail trade
Retail CRE		659,929		—		—		659,929
Retail goods and services^(1)(2)(3)		349,380		378,382		370,527		1,098,289
Total retail trade		1,009,309		378,382		370,527		1,758,218
Energy		351,896		—		—		351,896
Total Sectors under focus	$	2,696,615	$	1,550,503	$	617,607	$	4,864,725


( $ in thousands )	Balance		Percentage of Total Loans *
Sectors under focus *
Healthcare and social assistance
Hospitals	$	288,073		1.40	%
Offices of physicians & dentists		477,719		2.40	%
Assisted living (investor CRE)		372,119		2.00	%
Assisted living (non- investor CRE)		207,470		1.00	%
All other healthcare		242,173		1.20	%
Total healthcare and social assistance		1,587,554		8.00	%
Hospitality
Hotel		523,117		2.60	%
Restaurants full service, casual dining and bars		370,109		1.90	%
Restaurants limited service		121,086		0.60	%
Entertainment		147,291		0.70	%
Total hospitality		1,161,603		5.80	%
Retail trade
Retail CRE		670,955		3.40	%
Retail goods and services		1,096,208		5.50	%
Total retail trade		1,767,163		8.90	%
Energy		337,828		1.70	%
Total Sectors under focus	$	4,854,148		24.40	%

Exhibit Number	Description	Filed Herewith	Form	Exhibit	Filing Date
3.1	Second Amended and Restated Articles of Hancock Whitney Corporation		8-K	3.1	5/1/2020
3.2	Second Amended and Restated Bylaws of Hancock Whitney Corporation		8-K	3.2	5/1/2020
10.1	Hancock Whitney Corporation 2020 Long Term Incentive Plan		8-K	10.1	5/1/2020
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, Senior Accounting and Finance Executive (Principal Accounting Officer)

	~~August 3,~~	November 4, 2020