Share-Based Payment Arrangements

9 Months Ended

Sep. 30, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-Based Payment Arrangements

8. Share-Based Payment Arrangements

Hancock maintains incentive compensation plans that provide for awards of share-based compensation to employees and directors. These plans have been approved by the Company’s shareholders. Detailed descriptions of these plans were included in Note 13 to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.

A summary of option activity for the nine months ended September 30, 2014 is presented below:

						Weighted
						Average
				Weighted		Remaining
				Average		Contractual		Aggregate
	Number of			Exercise		Term		Intrinsic
Options	Shares			Price		(Years)		Value ($000)
Outstanding at January 1, 2014		1,332,656		$	38.85
Exercised		(32,618	)		29.51
Cancelled/Forfeited		(16,549	)		38.26
Expired		(113,447	)		63.41
Outstanding at September 30, 2014		1,170,042		$	36.74		4.4	$	799
Exercisable at September 30, 2014		885,673		$	38.55		3.6	$	373

The total intrinsic value of options exercised during the nine months ended September 30, 2014 and 2013 was $0.2 million and $0.1 million, respectively.

A summary of the status of the Company’s nonvested restricted and performance shares as of September 30, 2014 and changes during the nine months ended September 30, 2014, is presented below. These restricted and performance shares are subject to service requirements.

				Weighted
				Average
	Number of			Grant Date
	Shares			Fair Value
Nonvested at January 1, 2014		1,981,820		$	31.75
Granted		120,396			36.23
Vested		(272,788	)		32.00
Forfeited		(85,873	)		31.69
Nonvested at September 30, 2014		1,743,555		$	32.02

As of September 30, 2014, there were $31.7 million of total unrecognized compensation expense related to nonvested restricted and performance shares expected to vest. This compensation is expected to be recognized in expense over a weighted average period of 3.1 years. The total fair value of shares which vested during the nine months ended September 30, 2014 and 2013 was $10 million and $1 million, respectively.

During the nine months ended September 30, 2014, the Company granted 69,857 performance shares with a grant date fair value of $38.14 per share to key members of executive and senior management. The number of 2014 performance shares that ultimately vest at the end of the three-year required service period, if any, will be based on the relative rank of Hancock’s three-year total shareholder return (TSR) among the TSRs of a peer group of fifty regional banks. The maximum number of performance shares that could vest is 200% of the target award. The fair value of the performance awards at the grant date was determined using a Monte Carlo simulation method. Compensation expense for these performance shares will be recognized on a straight-line basis over the service period.