Note 15. Commitments and Contingencies

Lending Related

In the normal course of business, the Banks enter into financial instruments, such as commitments to extend credit and letters of credit, to meet the financing needs of their customers. Such instruments are not reflected in the accompanying consolidated financial statements until they are funded, although they expose the Banks to varying degrees of credit risk and interest rate risk in much the same way as funded loans.

Commitments to extend credit include revolving commercial credit lines, nonrevolving loan commitments issued mainly to finance the acquisition and development of 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 Banks to fulfill a customer's financial commitments to a third party if the customer is unable to perform. The Banks issue standby letters of credit primarily to provide credit enhancement to their 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. 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. These off-balance sheet financial instruments are summarized below (in thousands):


	December 31,
	2011		2010
Commitments to extend credit	$	4,189,421	$	912,206
Letters of credit		441,048		87,038

Approximately $3.8 billion and $729 million of commitments to extend credit at December 31, 2011 and 2010, respectively, carry variable interest rates and the remainder fixed rates.

Legal Proceedings

On January 7, 2011, a purported shareholder of Whitney filed a lawsuit in the Civil District Court for the Parish of Orleans of the State of Louisiana captioned De LaPouyade v. Whitney Holding Corporation, et al., No. 11-189, naming Whitney and members of Whitney's board of directors as defendants. This lawsuit is purportedly brought on behalf of a putative class of Whitney's common shareholders and seeks a declaration that it is properly maintainable as a class action. The lawsuit alleges that Whitney's directors breached their fiduciary duties and/or violated Louisiana state law and that Whitney aided and abetted those alleged breaches of fiduciary duty by, among other things, (a) agreeing to consideration that undervalues Whitney, (b) agreeing to deal protection devices that preclude a fair sales process, (c) engaging in self-dealing, and (d) failing to protect against conflicts of interest. Among other relief, the plaintiff sought to enjoin the merger. The parties have reached a settlement in principle.

On February 17, 2011, a complaint in intervention was filed by the Louisiana Municipal Police Employees Retirement System ("MPERS") in the De LaPouyade case. The MPERS complaint is substantially identical to and seeks to join in the De LaPouyade complaint. The parties have reached a settlement in principle.

On February 7, 2011, another putative shareholder class action lawsuit, Realistic Partners v. Whitney Holding Corporation, et al., Case No. 2:11-cv-00256, was filed in the United States District Court for the Eastern District of Louisiana against Whitney, members of Whitney's board of directors, and Hancock asserting violations of Section 14(a) of the Securities Exchange Act of 1934, breach of fiduciary duty under Louisiana state law, and aiding and abetting breach of fiduciary duty by, among other things, (a) making material misstatements or omissions in the proxy statement, (b) agreeing to consideration that undervalues Whitney, (c) agreeing to deal protection devices that preclude a fair sales process, (d) engaging in self-dealing, and (e) failing to protect against conflicts of interest. Among other relief, the plaintiff sought to enjoin the merger. On February 24, 2011, the plaintiff moved for class certification. The parties have reached a settlement in principle.

On April 11, 2011, another putative shareholder class action lawsuit, Jane Doe v. Whitney Holding Corporation, et al. , Case No. 2:11-cv-00794-ILRL-JCW, was filed in the United States District Court for the Eastern District of Louisiana against Whitney, members of Whitney's board of directors, and the defendants' insurance carrier asserting breach of fiduciary duty under Louisiana state law by, among other things, (a) agreeing to consideration that undervalues Whitney, (b) agreeing to deal protection devices that preclude a fair sales process, (c) engaging in self-dealing, and (d) failing to protect against conflicts of interest. Among other relief, the plaintiff sought to enjoin the merger. On April 20, 2011, this case was consolidated with the Realistic Partners case. The parties have reached a settlement in principle.

Like many other banks, Whitney Bank is a defendant in a class action lawsuit (Angelique LaCour v. Whitney Bank, D. (M.D. Fla.)) alleging that it improperly assessed overdraft fees on consumer and business deposit accounts owned by persons and entities that maintained those accounts, within the class period, at Whitney National Bank, or any of the entities that it acquired during the class period before its merger with Hancock Bank of Louisiana, due to the order in which it posted or processed debit card transactions against such deposit accounts. Plaintiff alleges that these posting practices resulted in excessive overdraft fees being imposed by the Company. While the Company admits no wrong doing, in order to fully and finally resolve the litigation and avoid the significant costs and expenses that would be involved in defending the case as well as the distraction caused by the litigation, Whitney Bank has entered into an agreement in principal whereby Whitney would pay the sum of $6.8 million in exchange for a full and complete release of all claims brought in the pending action. The proposed settlement is contingent on several factors, including final court approval and sufficient class participation. The Company establishes a liability for contingent litigation losses for any legal matter when payments associated with the claims become probable and the costs can be reasonably estimated. The Company accrued for the proposed settlement in the 4^th quarter of 2011.

The Company accrues a liability for losses associated with litigation and regulatory matters when losses are both probable and estimable. Based on current knowledge, management does not believe that loss contingencies, if any, arising from other pending litigation and regulatory matters, including the litigation matters described above, will have a material adverse effect on the consolidated financial position or liquidity of the Company.

Lease Commitments

The Company currently is obligated under a number of capital and non-cancelable operating leases for buildings and equipment. Certain of these leases have escalation clauses and renewal options.

Future minimum lease payments for non-cancelable capital and operating leases with initial terms in excess of one year were as follows at December 31, 2011 (in thousands):


	Captial Leases		Operating Leases
2012	$	60	$	12,944
2013		65		11,840
2014		9		11,230
2015		7		10,031
2016		1		9,145
Thereafter		14		62,462

Total minimum lease payments	$	156	$	117,652

Amounts representing interest		40

Present value of net minimum lease payments	$	116

Rental expense approximated $11.9 million, $7.2 million and $4.5 million for the years ended December 31, 2011, 2010, and 2009, respectively.