Note 12. Retirement and Employee Benefit Plans

Pension Plans—Defined Benefit

The Company has a noncontributory defined benefit pension plan covering legacy Hancock employees who have been employed by the Company one year and who have worked a minimum of 1,000 hours during the calendar year. The benefits are based upon years of service and the employee's base or benefit base compensation.

Certain legacy Whitney employees are covered by a noncontributory qualified defined benefit pension plan. The benefits are based on an employee's total years of service and his or her highest consecutive five-year level of compensation during the final ten years of employment. Certain legacy Whitney employees are also covered by an unfunded nonqualified defined benefit pension plan that provides retirement benefits to designated executive officers. These benefits are calculated using the qualified plan's formula, but without applying the restrictions imposed on qualified plans by certain provisions of the Internal Revenue Code. Benefits that become payable under the nonqualified plan supplement amounts paid from the qualified plan. The Whitney plans have been closed to new participants since 2008, and benefit accruals have been frozen for all participants other than those who met certain vesting, age and years of service criteria as of December 31, 2008.

The Company makes contributions to the qualified pension plans 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. Based on currently available information, the Company anticipates making contributions totaling approximately $22.2 million during 2012.

The Company is in the process of reviewing all retirement benefit plans to determine appropriate changes needed to transition legacy Whitney employees into the Company's benefit plans.

The following tables detail the changes in the benefit obligations and plan assets of each plan for the years ended December 31, 2011 and 2010 as well as the funded status of the plans at each year end and the amounts recognized in the Company's balance sheets (in thousands). The Company uses a December 31 measurement date for all defined benefit pension plans and other postretirement benefit plans.

Hancock Plan


	2011			2010
Change in benefit obligation
Benefit obligation, beginning of year	$	101,746		$	89,720
Service cost		4,689			3,501
Interest cost		5,453			5,233
Actuarial loss		27,429			7,155
Benefits paid		(4,202	)		(3,863	)

Benefit obligation, end of year		135,115			101,746

Change in plan assets
Fair value of plan assets, beginning of year		71,640			61,313
Actual return on plan assets		1,375			7,718
Employer contributions		34,907			6,726
Benefit payments		(4,202	)		(3,863	)
Expenses		(245	)		(254	)

Fair value of plan assets, end of year		103,475			71,640

Funded status at end of year—net liability	$	(31,640	)	$	(30,106	)


Amounts recognized in accumulated other comprehensive loss
Unrecognized loss at beginning of year	$	38,810		$	36,753
Amount of (loss)/gain recognized during the year		(2,343	)		(2,281	)
Net actuarial loss/(gain)		31,789			4,338

Unrecognized loss at end of year	$	68,256		$	38,810

Whitney Plan


	December 31, 2011
	Qualified			Nonqualified
Change in benefit obligation
Benefit obligation at acquisition date	$	216,992		$	14,442
Service cost		3,751			27
Interest cost		6,664			438
Actuarial loss		40,542			1,597
Benefits paid		(3,556	)		(570	)

Benefit obligation, end of year		264,393			15,934


Change in plan assets
Fair value of plan assets at acquisition date		223,495			—
Actual return on plan assets		(5,354	)		—
Employer contributions		10,000			570
Benefit payments		(3,556	)		(570	)
Expenses		—			—

Fair value of plan assets, end of year		224,585			—


Funded status at end of year—net liability	$	(39,808	)	$	(15,934	)


Amounts recognized in accumulated other comprehensive loss
Unrecognized loss at acquistion date	$	—		$	—
Amount of (loss)/gain recognized during the year		—			—
Net actuarial loss/(gain)		55,524			1,597

Unrecognized loss at end of year	$	55,524		$	1,597

The accumulated benefit obligation was $109.1 million and $83.6 million, respectively, for the Hancock plan at December 31, 2011 and 2010. The accumulated benefit obligations at December 31, 2011 for the Whitney plans were $239.1 million for qualified plan and $15.7 million for the nonqualified plan.

The following tables show net periodic cost included in expense and the changes in the amounts recognized in accumulated other comprehensive income during 2011 and 2010. Hancock expects to recognize $4.6 million of the net actuarial loss included in accumulated other comprehensive income at December 31, 2011 as a component of net pension expense in 2012. The amount expected to be recognized from the Whitney plans totals $3.0 million.

The components of net periodic cost included in expense for each plan follows (in thousands):

Hancock Plan


	Years Ended December 31,
	2011			2010			2009
Net periodic benefit cost
Service cost	$	4,689		$	3,500		$	3,107
Interest cost		5,453			5,233			4,833
Expected return on plan assets		(5,490	)		(4,646	)		(3,873	)
Recognized net amortization and deferral		2,343			2,281			2,648

Net periodic benefit cost		6,995			6,368			6,715


Other changes in plan assets and benefit obligations recognized in other comprehensive income, before taxes
Net (loss)/gain recognized during the year		(2,343	)		(2,281	)		(2,648	)
Net actuarial loss/(gain)		31,789			4,338			(1,089	)

Total recognized in other comprehensive income		29,446			2,057			(3,737	)


Total recognized in net periodic benefit cost and other comprehensive income	$	36,441		$	8,425		$	2,978

Weighted average assumptions as of measurement date
Discount rate for benefit obligations		4.35	%		5.46	%		5.95	%
Discount rate for net periodic benefit cost		5.46	%		5.95	%		5.96	%
Expected long-term return on plan assets		7.50	%		7.50	%		7.50	%
Rate of compensation increase		4.00	%		4.00	%		4.00	%

Whitney Plan


	Year Ended
	December 31, 2011
	Qualified			Nonqualified
Net periodic benefit cost
Service cost	$	3,751		$	27
Interest cost		6,664			438
Expected return on plan assets		(9,628	)		—
Recognized net amortization and deferral		—			—

Net periodic benefit cost		787			465


Other changes in plan assets and benefit obligations recognized in other comprehensive income, before taxes
Net (loss)/gain recognized during the year		—			—
Net actuarial loss/(gain)		55,524			1,597

Total recognized in other comprehensive income		55,524			1,597


Total recognized in net periodic benefit cost and other comprehensive income	$	56,311		$	2,062


Weighted average assumptions as of measurement date
Discount rate for benefit obligations		4.31	%		4.31	%
Discount rate for net periodic benefit cost		5.35	%		5.35	%
Expected long-term return on plan assets		7.50	%		—
Rate of compensation increase		3.58	%		3.58	%

The long term rate of return on plan assets is determined by using the weighted-average of historical real returns for major asset classes based on target asset allocations. At December 31, 2011, the discount rate was calculated by matching expected future cash flows to the Citigroup Pension Discount Curve Liability Index.

The following shows expected pension plan benefit payments over the next ten years (in thousands):


	Hancock		Whitney
	Qualified		Qualified		Nonqualified		Total
2012	$	4,273	$	6,993	$	888	$	12,154
2013		4,394		7,410		883		12,687
2014		4,640		8,020		1,041		13,701
2015		4,971		8,735		1,134		14,840
2016		5,342		9,432		1,138		15,912
2017-2021		33,222		57,629		5,792		96,643

	$	56,842	$	98,219	$	10,876	$	165,937

The expected benefit payments are estimated based on the same assumptions used to measure the Company's benefit obligations at December 31, 2011.

The Hancock plan assets are held in the Company's family of mutual funds. The fair values of the Hancock pension plan assets at December 31, 2011 and 2010, by asset category, are shown in the following tables (in thousands):


Fair Value Measurements at December 31, 2011
Asset Category	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Hancock Horizon Government Money Market Fund	$	28,081	$	28,081	$	—	$	—
Hancock Horizon Strategic Income Bond Fund		29,895		29,895		—		—
Hancock Horizon Quantitative Long/Short Fund		3,674		3,674		—		—
Hancock Horizon Diversified International Fund		6,266		6,266		—		—
Hancock Horizon Burkenroad Fund		2,414		2,414		—		—
Hancock Horizon Growth Fund		13,403		13,403		—		—
Hancock Horizon Value Fund		19,742		19,742		—		—

TOTAL	$	103,475	$	103,475	$	—	$	—

		$103,40		$103,40		$103,40		$103,40
Fair Value Measurements at December 31, 2010
Asset Category	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Hancock Horizon Government Money Market Fund	$	2,573	$	2,573	$	—	$	—
Hancock Horizon Strategic Income Bond Fund		25,974		25,974		—		—
Hancock Horizon Quantitative Long/Short Fund		3,525		3,525		—		—
Hancock Horizon Diversified International Fund		6,277		6,277
Hancock Horizon Burkenroad Fund		2,264		2,264
Hancock Horizon Growth Fund		12,392		12,392		—		—
Hancock Horizon Value Fund		18,635		18,635

TOTAL	$	71,640	$	71,640	$	—	$	—

The Hancock plan's percentage asset allocations by asset category and corresponding target allocations at December 31, 2011 and 2010 follow:


	Plan Assets at December 31,						Target Allocation at December 31,
Asset category	2011			2010			2011			2010
Equity securities		44	%		60	%		40-70	%		40-70	%
Fixed income securities		29	%		36	%		30-60	%		30-60	%
Cash equivalents		27	%		4	%		0-10	%		0-10	%

		100	%		100	%

A $25 million contribution to the plan late in 2011 was initially invested in cash equivalents. After these funds were reinvested, the distribution of plan assets was within target allocations.

The investment strategy of the Hancock pension plan is to emphasize a balanced return of current income and growth of principal while accepting a moderate level of risk. The investment goal of the plan is to meet or exceed the return of a balanced market index comprised of 55% of the S&P 500 Index and 45% of the Barclays Intermediate Aggregate Bond Index. The pension plan investment committee meets periodically to review the policy, strategy and performance of the plan.

The fair value of the Whitney pension plan assets at December 31, 2011, are shown in the following table (in thousands):


Fair Value Measurements at December 31, 2011
Asset Category	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Equity securities-large cap	$	72,607	$	72,607	$		$
Equity securities-small cap		44,191		44,191
Hancock Horizon Diversified International		18,262		18,262
Corporate debt		33,319				33,319
U.S. government and agency secutities and other		44,017		15,032		28,985
Cash and equivalents		12,189		12,189

TOTAL	$	224,585	$	162,281	$	62,304	$

The Whitne plan's percentage asset allocations by asset category and corresponding target allocations at December 31, 2011 follow:


	At December 31, 2011
	Plan			Target
	Assets			Allocation
Asset category
Equity securities		60	%		40-70	%
Fixed income securities		35	%		30-50	%
Cash equivalents		5	%		0-10	%

		100	%

The assumption regarding the expected long-term return on Whitney plan assets with reference to the plan's investment policy and practices, including the tolerance for market and credit risk, and historical returns for benchmark indices specified in the policy. The policy communicates risk tolerance in terms of diversification criteria and constraints on investment quality. The plan may not hold debt securities of any single issuer, except the U.S. Treasury and U.S. government agencies, in excess of 10% of plan assets. The policy also calls for diversification of equity holdings across business segments and states a preference for holdings in companies that demonstrate consistent growth in earnings and dividends. No company's equity securities shall comprise more than 5% of the plan's total market value. Limited use of derivatives is authorized by the policy, but the investment manager has not employed these instruments.

As of December 31, 2011, the Whitney plan assets included 16,375 shares of Hancock common stock with a value of $.5 million (.23%) of plan assets.

Pension Plans – Defined Contribution

The Company sponsors defined contribution retirement plans under Section 401(k) of the Internal Revenue Code. The Hancock plan covers substantially all legacy Hancock employees who have been employed 90 days and meet certain other requirements, but excluding on call, temporary, and seasonal employees. Under these plans, the Company will match the 50% of the savings of each participant up to 6% of his or her compensation.

Eligible legacy Whitney employees who are employed by the new Whitney Bank after the merger continue to be covered by an employee savings plan under Section 401(k). An employee of the new Whitney Bank who was not a participant at the merger date can become eligible to participate in the savings plan after meeting the eligibility conditions, provided the employee performed services at a legacy Whitney location as of the merger date. Under the savings plan, the Company will match the savings of each participant up to 4% of his or her compensation. Tax law imposes limits on total annual participant savings. Participants are fully vested in their savings and in the matching Company contribution at all times. Under the savings plan, the Company can also make discretionary profit sharing contributions on behalf of participants who are either (a) ineligible to participate in the Whitney qualified defined-benefit plan or (b) subject to the freeze in benefit accruals under the defined-benefit plan. The discretionary profit sharing contribution for a plan year is up to 4% of the participants' eligible compensation for such year and is allocated only to participants who were employed on the first day of the plan year and at year end. Participants must complete three years of service to become vested in the Company's contributions subject to earlier vesting in the case of retirement, death or disability. The Whitney board amended the plan shortly prior to the merger to provide that Whitney employees terminated as a result of a force reduction after the closing date of the merger would also be immediately vested.

The expense of the Company's matching contributions to both the Hancock and legacy Whitney 401(k) plans was $4.5 million in 2011, $2.0 million in 2010 and $1.8 million in 2009. The discretionary profit-sharing contribution under the legacy Whitney plan was $1.3 million in 2011.

Health and Welfare Plans – Defined Benefit

The Company also sponsors defined benefit postretirement plans for both legacy Hancock and legacy Whitney employees. The Hancock plans provide health care and life insurance benefits to retiring employees who participate in medical and/or group life insurance benefit plans for active employees at the time of retirement and have reached 55 years of age with ten years of service or age 65 with five years of service. The postretirement health care plan is contributory, with retiree contributions adjusted annually and subject to certain employer contribution maximums. Neither Hancock plan is available to employees hired on or after January 1, 2000.

The legacy Whitney plans offer health care and life insurance benefit plans for retirees and their eligible dependents. Participant contributions are required under the health plan. All health care benefits are covered under contracts with health maintenance or preferred provider organizations or insurance contracts. The Company funds its obligations under these plans as contractual payments come due to health care organizations and insurance companies. Currently, these plans restrict eligibility for postretirement health benefits to retirees already receiving benefits as of the plan amendments in 2007 and to those active participants who were eligible to receive benefits as of December 31, 2007. Life insurance benefits are currently only available to employees who retired before December 31, 2007.

The following tables detail the changes in the benefit obligation of the Hancock and Whitney plans for the years ended December 31, 2011 and 2010, as well as the funded status of the plans at each year end and the amounts recognized in the Company's consolidated balance sheets (in thousands). The Company uses a December 31 measurement date for all defined benefit retirement plans. The Company used a 4.25% discount rate for the determination of the projected postretirement benefit obligation as of December 31, 2011 and a 4.10% discount rate for the Whitney plans. A discount rate of 5.30% was used to determine the Hancock plan benefit obligation as of December 31, 2010.

Hancock Plan


	Years Ended December 31,
	2011			2010
Change in postretirement benefit obligation
Projected postretirement benefit obligation, beginning of year	$	12,373		$	10,290
Service cost		137			125
Interest cost		611			556
Plan participants' contributions		346			310
Actuarial loss		4,294			2,098
Benefit payments		(1,108	)		(1,006	)

Projected postretirement benefit obligation, end of year		16,653			12,373

Change in plan assets
Plan assets, beginning of year		—			—
Employer contributions		763			696
Plan participants' contributions		345			310
Benefit payments		(1,108	)		(1,006	)

Plan assets, end of year		—			—


Funded status at end of year—net liability	$	(16,653	)	$	(12,373	)

Amounts recognized in accumulated other comprehensive loss
Unrecognized loss at beginning of year	$	5,546		$	3,701
Amount of (loss)/gain recognized during the year		(489	)		(253	)
Net actuarial loss/(gain)		4,294			2,098

Unrecognized loss at end of year	$	9,351		$	5,546

Whitney Plans


	Period Ended December 31 2011
Change in postretirement benefit obligation
Projected postretirement benefit obligation, from acquisition date	$	15,949
Service cost		—
Interest cost		480
Plan participants' contributions		523
Actuarial loss		1,645
Benefit payments		(1,143	)

Projected postretirement benefit obligation, end of year		17,454


Change in plan assets
Plan assets, beginning of year		—
Employer contributions		620
Plan participants' contributions		523
Benefit payments		(1,143	)

Plan assets, end of year		—


Funded status at end of year—net liability	$	(17,454	)


Amounts recognized in accumulated other comprehensive loss
Unrecognized loss at beginning of year	$	—
Amount of (loss)/gain recognized during the year		—
Net actuarial loss/(gain)		1,645

Unrecognized loss at end of year	$	1,645

The following tables for the Hancock plans show the composition of net periodic postretirement benefit cost (in thousands):


	Years Ended December 31,
	2011			2010			2009
Net periodic postretirement benefit cost
Service cost	$	137		$	124		$	114
Interest costs		611			556			565
Amortization of net loss		538			302			296
Amortization of prior service cost		(48	)		(48	)		(48	)

Net periodic postretirement benefit cost		1,238			934			927


Other changes in plan assets and benefit obligations recognized in other comprehensive income, before taxes
Amount of loss recognized during the year		(538	)		(302	)		(296	)
Net actuarial (gain)/loss		4,293			2,098			1,574
Amortization of prior service cost		48			48			48

Total recognized in other comprehensive income		3,803			1,844			1,326

Total recognized in net periodic benefit cost and other comprehensive income	$	5,041		$	2,778		$	2,253

The Company assumed certain trends in health care costs in the determination of the benefit obligations. At December 31, 2011, the Company assumed a 7.5% increase in the pre- and post-Medicare age health costs for 2012, declining uniformly over 5 years to a 5.0% annual rate of increase for years thereafter. At December 31, 2010, the initial rate of increase was assumed to be 8.0%, declining to an ultimate rate of 5.0% over a 6 year period. The following table illustrates the effect on the annual periodic postretirement benefit costs and postretirement benefit obligation of a 1% increase or 1% decrease in the assumed health care cost trend rates from the rates assumed at December 31, 2011.


	1% Decrease		Assumed		1% Increase
	in Rates		Rates		in Rates
Aggregated service and interest cost	$	654	$	748	$	866
Postretirement benefit obligation		14,655		16,653		19,114

The following tables for the Whitney plans show the composition of net period postretirement benefit cost (in thousands):


	2011
Net periodic postretirement benefit cost
Service cost	$	—
Interest costs		480
Amortization of net loss		—
Amortization of prior service cost		—

Net periodic postretirement benefit cost		480


Other changes in plan assets and benefit obligations recognized in other comprehensive income, before taxes
Amount of loss recognized during the year		—
Net actuarial (gain)/loss		1,645
Amortization of prior service cost		—

Total recognized in other comprehensive income		1,645

Total recognized in net periodic benefit cost and other

comprehensive income	$	2,125

At December 31, 2011, the Company assumed a 7.75% increase in pre- and post-Medicare age health costs for 2012, declining gradually to a 5.0% annual rate. The following table illustrates the effect on the annual periodic postretirement benefit cost and the postretirement benefit obligation of a 1% increase or 1% decrease in the assumed health care cost trend rates:


	1% Decrease in Rates		Assumed Rates		1% Increase in Rates
Aggregated service and interest cost	$	431	$	480	$	538
Postretirement benefit obligation		15,620		17,454		19,631

Expected benefits to be paid over the next ten years are reflected the following table (in thousands):


	Hancock		Whitney		Total
2012	$	832	$	1,246	$	2,078
2013		795		1,293		2,088
2014		838		1,244		2,082
2015		784		1,141		1,925
2016		813		1,056		1,869
2017-2021		4,245		4,450		8,695

	$	8,307	$	10,430	$	18,737