On June 4, 2011, Hancock acquired all of the outstanding common stock of Whitney Holding Corporation (Whitney), a bank holding company based in New Orleans, Louisiana, in a stock and cash transaction. Whitney common shareholders received 0.418 shares of Hancock common stock in exchange for each share of Whitney stock, resulting in Hancock issuing 40,794,261 common shares at a fair value of $1.3 billion. Whitney's preferred stock and common stock warrant issued under TARP were purchased by the Company for $307.7 million as part of the merger transaction. In total, the purchase price was approximately $1.6 billion including the value of the options to purchase common stock.

On September 16, 2011, seven Whitney Bank branches located on the Mississippi Gulf Coast and one branch located in Bogalusa, LA with approximately $47 million in loans and $180 million in deposits were divested in order to resolve branch concentration concerns of the U.S. Department of Justice relating to the merger.

The Whitney transaction was accounted for using the purchase method of accounting and accordingly, assets acquired, liabilities assumed and consideration exchanged were recorded at estimated fair value on the acquisition date. Fair values are preliminary and subject to refinement for up to one year after the closing date of the acquisition. Assets acquired totaled $11.7 billion, including $6.5 billion in loans, $2.6 billion of investment securities, and $780 million of intangibles. Liabilities assumed were $10.1 billion, including $9.2 billion of deposits.

Preliminary goodwill of $514 million was calculated as the excess of the consideration exchanged over the net identifiable assets acquired and represents the value expected from the synergies created from combining the businesses as well as the economies of scale expected from combining the operations of the two companies.

The following table provides the assets purchased, the liabilities assumed and the consideration transferred:

Preliminary Statement of Net Assets Acquired (at fair value) and Consideration Transferred

(in millions except per share)


ASSETS
Cash and cash equivalents	$	957
Loans held for sale		57
Securities		2,635
Loans and leases		6,456
Property and equipment		284
Other intangible assets (1)		266
Other assets		580

Total identifiable assets		11,235

LIABILITIES
Deposits		9,182
Borrowings		776
Other liabilities		175

Total liabilities		10,133

Net identifiable assets acquired		1,102
Goodwill (2)		514

Net assets acquired	$	1,616

CONSIDERATION:
Hancock Holding Company common shares issued		41
Purchase price per share of the Company's common stock (3)		32.04

Company common stock issued and cash exchanged for fractional shares	$	1,307
Stock options converted		1
Cash paid for TARP preferred stock and warrants		308

Fair value of total consideration transferred	$	1,616

(1)

Intangible assets consists of core deposit intangible of $189 million, trade name of $54 million, trust relationships of $11 million, and credit card relationships of $11 million. The amortization life is 13 - 15 years for the CDI intangible asset; 17 years for credit card relationships and 12 years for trust. They will be amortized on an accelerated basis.

(2)	No goodwill is expected to be deductible for federal income tax purposes. The goodwill will be primarily allocated to the Whitney Bank segment.

(3)	The value of the shares of common stock exchanged with Whitney shareholders was based upon the closing price of the Company's common stock at June 3, 2011, the last traded day prior to the date of acquisition.

The following table (in thousands) provides a reconciliation of goodwill and other indefinite lived intangibles:

The operating results of the Company for the period ended September 30, 2011 include the operating results of the acquired assets and assumed liabilities for the 118 days subsequent to the acquisition date of June 4, 2011. Whitney's operations contributed approximately $128.9 million in revenue, net of interest expense, and an estimated $25.6 million in net income for the period from the acquisition and is included in the consolidated financial statements. Whitney's results of operations prior to the acquisition are not included in Hancock's consolidated statement of income.

Merger related charges of $46.6 million associated with the Whitney acquisition are included in noninterest expense for 2011. Such expenses were for professional services and other temporary help fees associated with the conversion of systems and integration of operations; costs related to branch and office consolidations, costs related to termination of existing contractual arrangements for various services, marketing and promotion expenses, retention and severance and incentive compensation costs, travel costs, and printing, supplies and other costs.

The following unaudited pro forma information presents the results of operations for three months ended and nine months ended September 30, 2011 and 2010, as if the acquisition had occurred at the beginning of the earliest period presented. These adjustments include the impact of certain purchase accounting adjustments such as intangible assets amortization, fixed assets depreciation and reversal of Whitney's provision. In addition, the $46.6 million in merger expenses discussed above are included in each year. Additionally, the Company expects to achieve further operating cost savings and other business synergies as a result of the acquisition which are not reflected in the pro forma amounts. These unaudited pro forma results are presented for illustrative purposes and are not intended to represent or be indicative of the actual results of operations of the combined company that would have been achieved had the acquisition occurred at the beginning of each period presented, nor are they intended to represent or be indicative of future results of operations.

In many cases, determining the fair value of the acquired assets and assumed liabilities required the Company to estimate future cash flows associated with those assets and liabilities and to discount those cash flows at appropriate rates of interest. The most significant estimates related to the valuation of acquired loans. For such loans, the excess of cash flows expected to be collected as of the acquisition date over the estimated fair value is recognized as interest income over the remaining lives of the loans. The difference between contractually required payments at acquisition and the expected cash flows at acquisition date reflects the impact of estimated credit losses and other factors, such as prepayments. In accordance with GAAP, there was no carry-over of Whitney's previously established allowance for credit losses.

The acquired loans were divided into loans with evidence of credit quality deterioration which are accounted for under ASC 310-30 (acquired impaired) and loans that do not meet this criteria, which are accounted for under ASC 310-20 (acquired performing). In addition, the loans were further categorized into different loan pools by loan types. The Company determined expected cash flows on the acquired loans based on the best available information at the date of acquisition. If new information is obtained about circumstances as of the acquisition date that impact cash flows, management will revise the related purchase accounting adjustments in accordance with accounting for business combinations.

Loans at the acquisition date of June 4, 2011 are presented in the following table.

The following table presents information about the acquired impaired loans at acquisition (in thousands).

The fair value of the acquired performing loans at June 4, 2011, was $5.9 billion. The gross contractually required principal and interest payments receivable for acquired performing loans was $6.8 billion.

The fair value of net assets acquired includes certain contingent liabilities that were recorded as of the acquisition date. Whitney has been named as a defendant in various pending legal actions and proceedings arising in connection with its activities as a financial services institution. Some of these legal actions and proceedings include claims for substantial compensatory and/or punitive damages or claims for indeterminate amounts of damages. Whitney is also involved in investigations and/or proceedings by governmental and self-regulatory agencies. Due to the number of variables and assumptions involved in assessing the possible outcome of these legal actions, sufficient information did not exist to reasonably estimate the fair value of these contingent liabilities. As such, these contingencies have been measured in accordance with accounting guidance on contingencies which states that a loss is recognized when it is probable of occurring and the loss amount can be reasonably estimated.

In connection with the Whitney acquisition, on June 4, 2011, the Company recorded a liability for contingent payments to certain employees for arrangements that were in existence prior to acquisition. The fair value of this liability was $59.6 million. The Company also recorded a liability with a fair value of $14.0 million for a contractual contingency assumed in connection with Whitney's obligations under contracts for a systems conversion and replacement initiative. This initiative was suspended in anticipation of the acquisition. Substantially all of these liabilities are expected to be paid within one year from acquisition date.