Stockholders' Equity

9 Months Ended

Sep. 30, 2014

Equity [Abstract]

Stockholders' Equity

6. Stockholders’ Equity

Stock Repurchase Program

On July 16, 2014, the Company’s board of directors approved a stock repurchase plan that authorizes the repurchase of up to 5%, or approximately 4 million shares, of its currently outstanding common stock. The approved plan allows the Company to repurchase its common shares either in the open market in compliance with Rule 10b-18 promulgated under the Securities Exchange Act of 1934, as amended, or in privately negotiated transactions with non-affiliated sellers or as otherwise determined by the Company in one or more transactions, from time to time until December 31, 2015. Under this plan, we have repurchased 305,263 shares of our common stock at an average price of $32.65 per share.

The Company’s board of directors approved a stock repurchase program on April 30, 2013 that authorized the repurchase of up to 5% of the Company’s outstanding common stock. On May 8, 2013 Hancock entered into an accelerated share repurchase (ASR) transaction with Morgan Stanley & Co. LLC (Morgan Stanley). In the ASR transaction, the Company paid $115 million to Morgan Stanley and received from them approximately 3 million shares of Hancock common stock, representing approximately 76% of the estimated total number of shares to be repurchased. On May 5, 2014, final settlement of the ASR agreement occurred at which time the Company received approximately 0.6 million shares from Morgan Stanley. The number of shares delivered to the Company in this

ASR transaction was based generally on the volume-weighted average price per share of the Hancock common stock during the term of the ASR agreement less a specified discount and on the amount paid at inception to Morgan Stanley, subject to certain adjustments in accordance with the terms of the ASR agreement. The ASR transaction was treated as two separate transactions: (i) the acquisition of treasury shares on the dates the shares were received; and (ii) a forward contract indexed to the Company’s common stock that was classified as equity. The 2013 program was superseded by the 2014 program.

Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (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), 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/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. The components of AOCI are reported net of related tax effects.

The components of AOCI and changes in those components are presented in the following table (in thousands).

	Available			HTM Securities						Loss on
	for Sale			Transferred			Employee			Effective Cash
	Securities			from AFS			Benefit Plans			Flow Hedges			Total
Balance, January 1, 2013	$	38,854		$	19,090		$	(80,688	)	$	(181	)	$	(22,925	)
Other comprehensive income before income taxes:
Net change in unrealized (loss) gain		(96,070	)		—			—			(4	)		(96,074	)
Transfer of net unrealized gain from AFS to HTM, net of cumulative tax effect		36,208			(36,208	)		—			—			—
Reclassification of net losses realized and included in earnings		—			—			5,534			301			5,835
Amortization of unrealized net gain on securities transferred to HTM		—			(7,099	)		—			—			(7,099	)
Income tax (benefit) expense		(35,115	)		(2,563	)		2,070			116			(35,492	)
Balance, September 30, 2013	$	14,107		$	(21,654	)	$	(77,224	)	$	—		$	(84,771	)
Balance, January 1, 2014	$	8,263		$	(21,189	)	$	(22,453	)	$	—		$	(35,379	)
Other comprehensive income before income taxes:
Net change in unrealized gain		9,119			—			—			—			9,119
Reclassification of net losses realized and included in earnings		—			—			2,195			—			2,195
Amortization of unrealized net gain on securities transferred to HTM		—			2,463			—			—			2,463
Income tax expense		3,309			879			903			—			5,091
Balance, September 30, 2014	$	14,073		$	(19,605	)	$	(21,161	)	$	—		$	(26,693	)

The following table shows the line item affected by amounts reclassified from accumulated other comprehensive income:

Amount reclassified from AOCI	Nine Months Ended September 30,					Increase (decrease)          in affected line item
(in thousands)	2014		2013			on the income statement
Amortization/accretion of unrealized net gain/(loss) on securities transferred to HTM	$	2,463	$	(7,099	)	Interest income
Tax effect		879		(2,563	)	Income taxes
Net of tax		1,584		(4,536	)	Net income
Amortization of defined benefit pension and post-retirement items	$	293	$	5,534		(a) Employee benefits expense
Tax effect		103		2,070		Income taxes
Net of tax		190		3,464		Net income
Gains and losses on cash flow hedges	$	—	$	301		Interest expense
Tax effect		—		105		Income taxes
Net of tax		—		196		Net income
Total reclassifications, net of tax	$	1,774	$	(876	)	Net income

(a) These accumulated other comprehensive income components are included in the computation of net periodic pension and post-retirement cost that is reported with employee benefits expense (see Note 9 for additional details).