Note 5. Long-Term Debt

Long-term debt consisted of the following:


	December 31
	2012		2011
Subordinated notes payable	$	98,011	$	150,000
Term note payable dated December 21, 2012		220,000		—
Term note payable dated May 20, 2011		—		140,000
Other long-term debt		78,578		63,890

Total long-term debt	$	396,589	$	353,890

On December 21, 2012, the Company entered into a three-year term loan agreement that provides for a $220 million term loan facility, all of which was borrowed on the closing date. The agreement also provides for up to $50 million in additional borrowings under the loan facility, subject to obtaining additional commitments from existing or new lenders and satisfaction of certain other conditions. Amounts borrowed under the loan facility bear interest at a variable rate based on LIBOR plus 1.875% per annum. The loan agreement requires quarterly principal payments of $8.8 million, and outstanding borrowings may be prepaid in whole or in part at any time prior to the December 21, 2015 maturity date without premium or penalty.

The Company must satisfy certain financial covenants and is subject to other restrictions customary in financings of this nature, none of which is expected to adversely impact the operations of the Company. Under the financial covenants Hancock’s ratio of consolidated nonperforming assets to consolidated total loans and other real estate, calculated without FDIC-covered assets, cannot exceed 3.50%. Hancock’s consolidated net worth must be a minimum of $2.1 billion initially, increasing each quarter by 50% of consolidated net income, but without reduction for net losses, and increasing by 100% of any common stock issuance. The Company and its financial institution subsidiaries must also maintain a Tier 1 regulatory capital leverage ratio of at least 8%; a Tier 1 risk based capital ratio of at least 10%; and a total risk based capital ratio of at least 12%. The Company was in compliance with all covenants as of December 31, 2012.

In connection with the execution of the new term loan agreement, the Company repaid the $140 million principal and all remaining interest due under the prior term loan agreement that was scheduled to mature on June 3, 2013, and the prior agreement was terminated without premium or penalty.

During the second quarter of 2012, the Company initiated a tender offer for up to $75 million of Whitney Bank’s subordinated debt. A total of $150 million of 10-year 5.875% fixed-rate subordinated debt had been issued by Whitney National Bank in March 2007 and was assumed by Hancock in the Whitney acquisition. In July 2012, the tender was consummated, and approximately $52 million of the Whitney subordinated debt was repurchased. In addition to paying the indebtedness represented by the notes and accrued interest, the Company incurred approximately $5.3 million in costs, including a premium of $5.1 million that are included in noninterest expense for the third quarter for 2012. As of December 31, 2012, 80% of the balance of the subordinated notes qualify as capital in the calculation of certain regulatory capital ratios. The qualifying amount will be reduced by 20% per year in the second quarter of each year through maturity.

Substantially all of the other long-term debt consists of borrowings associated with tax credit fund activities. These borrowings mature at various dates beginning in 2015 through 2052. These borrowings have an expected maturity of generally seven years.