-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HX/cnUebgiMb7fXTRtoI51PxtyLkr10tYGyoV0Y1NOkCUUG8ii0PYB0yp2GN63Fs W3gXt3l1zMxkMMwu9rolJw== 0001030798-98-000083.txt : 19980814 0001030798-98-000083.hdr.sgml : 19980814 ACCESSION NUMBER: 0001030798-98-000083 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980813 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: HANCOCK HOLDING CO CENTRAL INDEX KEY: 0000750577 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 640693170 STATE OF INCORPORATION: MS FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-13089 FILM NUMBER: 98686181 BUSINESS ADDRESS: STREET 1: ONE HANCOCK PLZ STREET 2: P.O. BOX 4019 CITY: GULFPORT STATE: MS ZIP: 39502 BUSINESS PHONE: 6018684605 MAIL ADDRESS: STREET 1: ONE HANCOCK PLZ STREET 2: P O BOX 4019 CITY: GULFPORT STATE: MS ZIP: 39502 10-Q 1 HANCOCK HOLDING COMPANY 10-Q FOR 6/30/98 PERIOD UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q X Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For Quarter Ending June 30, 1998 - -------------------------------------------------------------------------------- Commission File Number 0-13089 - -------------------------------------------------------------------------------- HANCOCK HOLDING COMPANY - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) MISSISSIPPI 64-0693170 - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer Identification incorporation or organization) Number) ONE HANCOCK PLAZA, P.O. BOX 4019, GULFPORT, MISSISSIPPI 39502 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (228) 868-4635 - -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) NOT APPLICABLE - -------------------------------------------------------------------------------- (Former name, address and fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO -------- --------- 10,488,175 Common Shares were outstanding as of August 3, 1998 for financial statement purposes. Page 1 of 13 HANCOCK HOLDING COMPANY INDEX PART I. FINANCIAL INFORMATION PAGE NUMBER ITEM 1. Financial Statements Condensed Consolidated Balance Sheets -- June 30, 1998 and December 31, 1997 3 Condensed Consolidated Statements of Earnings -- Three Months Ended June 30, 1998 and 1997 4 Condensed Consolidated Statements of Cash Flows -- Three Months Ended June 30, 1998 and 1997 5 Notes to Condensed Consolidated Financial Statements 6 - 7 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8 - 10 ITEM 3. Quantitative and Qualitative Disclosures About Market Risk 11 PART II. OTHER INFORMATION ITEM 1. Legal Proceedings 12 ITEM 5. Other Information 12 ITEM 6. Exhibits and Reports on Form 8-K 12 SIGNATURES 13 Page 2 of 13
HANCOCK HOLDING COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in thousands) (Unaudited) June 30, December 31, 1998 1997 * ------------- -------------- ASSETS: Cash and due from banks (non-interest bearing) $ 128,088 $ 113,125 Interest-bearing time deposits with other banks 596 2,068 Securities available-for-sale (cost of $342,357 and $163,531) 342,223 163,633 Securities held-to-maturity (market value of $884,009 and $924,958) 875,362 916,362 Federal funds sold and securities purchased under agreements to resell 43,500 35,500 Loans, net of unearned income 1,227,194 1,220,630 Less: Allowance for loan losses (20,688) (21,000) ------------- -------------- Net loans 1,206,506 1,199,630 Property and equipment, at cost, less accumulated depreciation of $48,801 and $46,285 45,751 42,810 Other real estate 2,384 2,357 Accrued interest receivable 22,603 20,977 Other assets 49,206 41,495 ------------- -------------- TOTAL ASSETS $2,716,219 $2,537,957 ============= ============== LIABILITIES AND STOCKHOLDERS' EQUITY: Deposits: Non-interest bearing demand $ 489,299 $ 462,731 Interest-bearing savings, NOW, money market and other time 1,792,865 1,599,917 ------------- -------------- Total deposits 2,282,164 2,062,648 Federal funds purchased and securities sold under agreements to repurchase 118,842 170,534 Other liabilities 15,740 14,923 Long-term bonds 0 1,279 ------------- -------------- TOTAL LIABILITIES 2,416,746 2,249,384 ------------- -------------- COMMITMENT AND CONTINGENCIES: STOCKHOLDERS' EQUITY: Common stock 36,872 36,872 Capital surplus 200,316 200,766 Undivided profits 62,858 51,401 Unrealized (loss) gain on securities available-for-sale (87) 66 Unearned Compensation (486) (532) ------------- -------------- TOTAL STOCKHOLDERS' EQUITY 299,473 288,573 ------------- -------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $2,716,219 $2,537,957 ============= ============== * The balance sheet at December 31, 1997 has been taken from the audited balance sheet at that date. See notes to condensed consolidated financial statements.
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HANCOCK HOLDING COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS UNAUDITED (Amounts in thousands except per share data) Three Months Ended June 30, Six Months Ended June 30, --------------------------- ------------------------- INTEREST INCOME: 1998 1997 1998 1997 ---------- --------- --------- ---------- Interest and fees on loans $ 28,643 $ 29,030 $ 58,231 $ 57,678 Interest on: U. S. Treasury Securities 3,793 3,645 7,550 6,699 Obligations of other U.S. government agencies and corporations 7,459 9,189 14,516 18,350 Obligations of states and political subdivisions 1,686 991 3,033 1,926 Interest on federal funds sold and securities purchased under agreements to resell 974 474 2,321 1,160 Interest on time deposits and other 5,438 2,370 10,284 4,185 ---------- --------- --------- ---------- Total interest income 47,993 45,699 95,935 89,998 ---------- --------- --------- ---------- INTEREST EXPENSE: Interest on deposits 18,437 16,554 35,858 32,429 Interest on federal funds purchased and securities sold under agreements to repurchase 2,302 1,199 4,097 2,306 Interest on bonds and notes 29 30 58 51 ---------- --------- --------- ---------- Total interest expense 20,768 17,783 40,013 34,786 ---------- --------- --------- ---------- NET INTEREST INCOME 27,225 27,916 55,922 55,212 Provision for loan losses 929 1,509 2,288 2,344 ---------- --------- --------- ---------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 26,296 26,407 53,634 52,868 ---------- --------- --------- ---------- Non-Interest Income: Service charges on deposit accounts 4,780 4,507 9,437 8,898 Income from fiduciary activities 783 651 1,418 1,503 Securities gains (losses) 0 (1) (63) 1 Other 2,509 1,996 4,391 3,725 ---------- --------- --------- ---------- Total non-interest income 8,072 7,153 15,183 14,127 ---------- --------- --------- ---------- Non-Interest Expense: Salaries and employee benefits 11,631 11,034 23,497 22,224 Net occupancy expense of premises and equipment expense 3,419 3,487 6,231 6,947 Other 6,696 6,221 14,258 12,724 ---------- --------- --------- ---------- Total non-interest expense 21,746 20,742 43,986 41,895 ---------- --------- --------- ---------- EARNINGS BEFORE INCOME TAXES 12,622 12,818 24,831 25,100 INCOME TAXES 4,087 4,625 8,242 8,650 ---------- --------- --------- ---------- NET EARNINGS $ 8,535 $ 8,193 $ 16,589 $ 16,450 ========== ========= ========= ========== BASIC AND DILUTED EARNINGS PER COMMON SHARE $ 0.78 $ 0.76 $ 1.52 $ 1.52 ========== ========= ========= ========== DIVIDENDS PAID PER COMMON SHARE $ 0.25 $ 0.25 $ 0.50 $ 0.50 ========== ========= ========= ========== WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 10,910 10,840 10,911 10,830 ========== ========= ========= ========== See notes to condensed consolidated financial statements.
Page 4 of 13 HANCOCK HOLDING COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS UNAUDITED (Amounts in thousands) Six Months Ended June 30, ------------------------- 1998 1997 ---------- ---------- CASH FLOWS FROM OPERATING ACTIVITIES: Net Earnings $ 16,589 $ 16,450 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation 2,550 2,297 Provision for loan losses 2,288 2,344 Provision for losses on real estate owned 88 80 Losses (gains) on sales of securities 63 ( 2) Increase in interest receivable ( 1,626) ( 201) Amortization of intangible assets 1,200 1,095 Increase (decrease) in interest payable 694 ( 128) Other, net ( 10,694) 5,284 --------- --------- Net cash provided by Operating Activities 11,152 27,219 --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Net decrease in interest-bearing time deposits 1,472 973 Proceeds from sales of securities held-to-maturity 206,906 137,959 Purchase of securities held-to-maturity (165,906) (213,717) Proceeds from sales and maturities of securities available-for-sale 24,365 24,522 Purchase of securities available-for-sale (202,955) ( 8,009) Net decrease in federal funds sold and securities purchased under agreements to resell ( 8,000) ( 32,000) Net increase in loans ( 9,165) ( 7,346) Purchase of property and equipment, net ( 5,491) ( 875) Proceeds from sales of other real estate 298 511 Net cash paid in connection with purchase transaction 0 ( 1,397) --------- --------- Net cash used in Investing Activities (158,476) ( 99,379) --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Net increase in deposits 219,516 72,570 Dividends paid ( 5,537) ( 5,504) Net (decrease) increase in federal funds purchased and securities sold under agreements to repurchase and other temporary funds ( 51,692) 23,517 --------- --------- Net cash provided by Financing Activities 162,287 90,583 --------- --------- NET INCREASE IN CASH AND DUE FROM BANKS 14,963 18,423 CASH AND DUE FROM BANKS, BEGINNING 113,125 119,483 --------- --------- CASH AND DUE FROM BANKS, ENDING $ 128,088 $ 137,906 ========= ========= See notes to condensed consolidated financial statements. Page 5 of 13 HANCOCK HOLDING COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS UNAUDITED (Six Months Ended June 30, 1998 and 1997) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - ------------------------------------------ The accompanying unaudited condensed consolidated financial statements include the accounts of hancock holding company, its wholly-owned banks, hancock bank and hancock bank of louisiana and other subsidiaries. Intercompany profits,transactions and balances have been eliminated in consolidation. The accompanying Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the informationand footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for interim periods are not necessarily indicative of the results that may be expectedfor the entire year. For further information, refer to the consolidated financial statements and notes thereto of Hancock Holding Company's 1997 Annual Report to Shareholders. RECENT CHANGES IN FINANCIAL ACCOUNTING STANDARDS - ------------------------------------------------ The Company adopted Statement of Financial Accounting Standards No. 130 "Reporting Comprehensive Income" (SFAS 130) effective January 1, 1998. SFAS 130 establishes standards for reporting and display of comprehensive income and its major components. Comprehensive income includes net income and other comprehensive income which, in the case of the Company, only includes unrealized gains and losses on investments available for sale. Following is a summary of the Company's comprehensive income for the three and six months ended June 30, 1998 and 1997.
(Amounts in thousands) Three Months Ended June 30, Six Months Ended June 30, --------------------------- ------------------------- 1998 1997 1998 1997 -------- -------- -------- -------- Net Earnings $ 8,535 $ 8,193 $ 16,589 $ 16,450 Other Comprehensive Income (net of income tax): Unrealized Holding (Losses)/Gains 66 32 (153) 83 -------- -------- -------- -------- Comprehensive Income $ 8,601 $ 8,225 $ 16,436 $ 16,533 ======== ======== ======== ======== Page 6 of 13 In June 1997, the Financial Accounting Standards Board issued SFAS No. 131 "Disclosures about Segments of an Enterprise and Related Information" which establishes annual and interim reporting standards for an enterprise's operating segments and related disclosures about its products, services, geographic areas and major customers. Adoption of these statements will not impact the Company's consolidated financial position, results of operations or cash flows, and any effect will be limited to the form and content of its disclosures. Both statements became effective for fiscal years beginning after December 15, 1997. The Company is in the process of reviewing its operating segments. PROPOSED ACQUISITION - -------------------- On April 14, 1998 the Company entered into an agreement for the acquisition of American Security Bancshares of Ville Platte, Inc. (American Security), Ville Platte, Louisiana and its subsidiary, American Security Bank (ASB). On June 17, 1998 the Company was notified that ASB had failed to renew a lease of one of its branch locations, which accounted for approximately 17% of its total deposits and approximately 32% of its total loans at March 31, 1998. The Company determined that American Security will not be able to comply with terms of the agreement, including the representations and warranties, because of the loss of the lease by American Security. The Company began discussions with American Security to determine a solution to resolve the loss of the lease, including a possible mutual termination of the agreement. On July 27, 1998 American Security filed a lawsuit against the Company in the 13th Judicial District Court of the Parish of Evangeline seeking, among other things, specific performance of the merger agreement. American Security asserts that the Company does not have the right to terminate the agreement and that the Company has breached the agreement by asserting that it is terminated. The Company intends to vigorously pursue all remedies available to it, however, there can be no assurance that the Company will prevail in such litigation.
Page 7 of 13 HANCOCK HOLDING COMPANY ----------------------- MANAGEMENT'S DISCUSSION AND ANALYSIS ------------------------------------ OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ------------------------------------------------ The following discussion provides management's analysis of certain factors which have affected the Company's financial condition and operating results during the periods included in the accompanying condensed consolidated financial statements. CHANGES IN FINANCIAL CONDITION - ------------------------------ Liquidity - --------- The Company manages liquidity through traditional funding sources of core deposits, federal funds, and maturities of loans and securities held-to-maturity and sales of securities available-for-sale.
The following liquidity ratios compare certain assets and liabilities to total deposits or total assets: June 30, March 31, Dec. 31, 1998 1998 1997 ---------- ---------- --------- Total securities to total deposits 53.35% 53.68% 52.36% Total loans (net of unearned discount) to total deposits 53.77% 55.86% 59.18% Interest-earning assets to total assets 91.63% 92.29% 92.13% Interest-bearing deposits to total deposits 78.56% 78.70% 77.57% Capital Resources - ----------------- The Company continues to maintain an adequate capital position, as the following ratios indicate: June 30, March 31, Dec. 31, 1998 1998 1997 ---------- ---------- --------- Equity capital to total assets (1) 11.03% 10.91% 11.37% Total capital to risk-weighted assets (2) 19.48% 19.34% 19.18% Tier 1 Capital to risk-weighted assets (3) 18.96% 18.83% 18.22% Leverage Capital to total assets (4) 10.01% 9.87% 10.24% Property and equipment to equity capital 15.27% 14.52% 14.84% (1) Equity capital consists of stockholder's equity (common stock, capital surplus and undivided profits). Page 8 of 13 (2) Total capital consists of equity capital less intangible assets plus a limited amount of loan loss allowances. Risk-weighted assets represent the assigned risk portion of all on and off-balance-sheet assets. Based on Federal Reserve Board guidelines, assets are assigned a risk factor percentage from 0% to 100%. A minimum ratio of total capital to risk-weighted assets of 8% is required. (3) Tier 1 capital consists of equity capital less intangible assets. A minimum ratio of tier 1 capital to risk-weighted assets of 4% is required. (4) Leverage capital consists of equity capital less goodwill and core deposit intangibles. The Federal Reserve Board currently requires bank holding companies rated Composite 1 under the BOPEC rating system to maintain a minimum 3% leverage capital ratio and all other bank holding companies not rated a Composite 1 under the BOPEC rating system to maintain a minimum 4% to 5% leverage capital ratio.
RESULTS OF OPERATIONS - --------------------- Net Earnings - ------------ Net earnings increased $138,000 or 0.84% for the first six months of 1998 compared to the first six months of 1997. The increase in earnings is attributable, in part, to an increase in tax-exempt investment income which provides for a reduced tax liability. Three Months Ended June 30, Six Months Ended June 30, --------------------------- ------------------------- 1998 1997 1998 1997 ------- ------ ------- ------- Results of Operations: Return on average assets 1.26% 1.34% 1.25% 1.36% Return on average equity 11.54% 11.88% 11.40% 12.05% Net Interest Income: Return on average interest-earning assets (tax equivalent) 7.90% 8.33% 7.99% 8.29% Cost of average interest-bearing funds 4.40% 4.19% 4.30% 4.14% ------- ------ ------- ------- Net interest spread 3.50% 4.13% 3.70% 4.15% ======= ====== ======= ======= Net yield on interest-earning assets (net interest income on a tax equivalent basis divided by average interest-earning assets) 4.55% 5.13% 4.72% 5.13% ======= ====== ======= ======= Provision for Loan Losses - ------------------------- The amount of the allowance equals the cumulative total of the provisions for loan losses, reduced by actual loan charge-offs, and increased by allowances acquired in acquisitions and recoveries of loans previously charged-off. Provisions are made to the allowance to reflect the currently perceived risks of loss associated with the bank's loan portfolio. A specific loan is charged-off when management believes, after considering, among other things, the borrower's condition and the value of any collateral, that collection of the loan is unlikely.
Page 9 of 13 The following ratios are useful in determining the adequacy of the loan loss allowance and loan loss provision and are calculated using average loan balances. Three Months Ended June 30, Six Months Ended June 30, 1998 1997 1998 1997 Annualized net charge-offs to average loans 0.44% 0.44% 0.43% 0.42% Annualized provision for loan losses to average loans 0.31% 0.50% 0.38% 0.39% Average allowance for loan losses to average loans 1.73% 1.65% 1.73% 1.67% Income Taxes - ------------ The effective tax rate of the Company continues to be less than the statutory rate of 35%, due primarily to tax-exempt interest income. The amount of tax-exempt income earned during the first six months of 1998 was approximately $3,490,000 compared to $2,280,000 for the comparable period in 1997. Income tax expense decreased from $8,650,000 in the first six months of 1997 to $8,242,000 in the first six months of 1998. PROPOSED ACQUISITION - -------------------- On April 14, 1998 the Company entered into an agreement for the acquisition of American Security Bancshares of Ville Platte, Inc. (American Security), Ville Platte, Louisiana and its subsidiary, American Security Bank (ASB). On June 17, 1998 the Company was notified that ASB had failed to renew a lease of one of its branch locations, which accounted for approximately 17% of its total deposits and approximately 32% of its total loans at March 31, 1998. The Company determined that American Security will not be able to comply with terms of the agreement, including the representations and warranties, because of the loss of the lease by American Security. The Company began discussions with American Security to determine a solution to resolve the loss of the lease, including a possible mutual termination of the agreement. On July 27, 1998 American Security filed a lawsuit against the Company in the 13th Judicial District Court of the Parish of Evangeline seeking, among other things, specific performance of the merger agreement. American Security asserts that the Company does not have the right to terminate the agreement and that the Company has breached the agreement by asserting that it is terminated. The Company intends to vigorously pursue all remedies available to it, however, there can be no assurance that the Company will prevail in such litigation. YEAR 2000 - --------- In 1997 the Company began addressing all the systems requiring modifications to accommodate the turn of the century. Testing of these systems began in 1998. Complete year-end testing is to be accomplished at the end of 1998. Management believes it has dedicated adequate resources to this project and does not believe that the cost of implementation will not be a significant amount.
Page 10 of 13 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK ---------------------------------------------------------- The Company's net income is dependent on its net interest income. Net interest income is susceptible to interest rate risk to the degree that interest-bearing liabilities mature or reprice on a different basis than interest-earning assets. When interest-bearing liabilities mature or reprice more quickly than interest-earning assets in a given period, a significant increase in market rates of interest could adversely affect net interest income. Similarly, when interest-earning assets mature or reprice more quickly than interest-bearing liabilities, falling interest rates could result in a decrease in net income. In an attempt to manage its exposure to changes in interest rates, management monitors the Company's interest rate risk. The Company's interest rate management policy is designed to produce a stable net interest margin in period of interest rate fluctuations. Interest sensitive assets and liabilities are those that are subject to maturity or repricing within a given time period. Management also reviews the Company's securities portfolio, formulates investment strategies and oversees the timing and implementation of transactions to assure attainment of the Board's objectives in the most effective manner. Notwithstanding the Company's interest rate risk management activities, the potential for changing interest rates is an uncertainty that can have an adverse effect on net income. In adjusting the Company's asset/liability position, the Board and management attempt to manage the Company's interest rate risk while enhancing net interest margins. At times, depending on the level of general interest rates, the relationship between long and short-term interest rates, market conditions and competitive factors, the Board and management may determine to increase the Company's interest rate risk position somewhat in order to increase its net interest margin. The Company's results of operations and net portfolio values remain vulnerable to increases in interest rates and to fluctuations in the difference between long and short-term interest rates. The Company also controls interest rate risk reductions by emphasizing non-certificate depositor accounts. The Board and management believe that such accounts carry a lower cost than certificate accounts, and that a material portion of such accounts may be more resistant to changes in interest rates than are certificate accounts. At June 30, 1998 the Company had $289 million of regular savings and club accounts and $574 million of money market and NOW accounts, representing 48.4% of total interest-bearing depositor accounts. The Company does not currently engage in trading activities or use derivative instruments to control interest rate risk. Even though suck activities may be permitted with the approval of the Board of Directors, the Company does not intend to engage in such activities in the immediate future. Interest rate risk is the most significant market risk affecting the Company. Other types of market risk, such as foreign currency exchange rate risk and commodity price risk, do not arise in the normal course of the Company's business activities. Page 11 of 13 Forward Looking Information --------------------------- Congress passed the Private Securities Litigation Act of 1995 in an effort to encourage corporations to provide information about a company's anticipated future financial performance. This Act provides a safe harbor for such disclosures which protects the companies from unwarranted litigation if the actual results are different from management expectations. This report contains forward-looking statements and reflects management's current views and estimates of future economic circumstances, industry conditions, company performance and financial results. These forward-looking statements are subject to a number of factors and uncertainties which could cause the Company's actual results and experience to differ from the anticipated results and expectations expressed in such forward-looking statements. Part II - OTHER INFORMATION --------------------------- ITEM 1. LEGAL PROCEEDINGS - ------------------------- On April 14, 1998 the Company entered into an agreement for the acquisition of American Security Bancshares of Ville Platte, Inc. (American Security), Ville Platte, Louisiana and its subsidiary, American Security Bank (ASB). On June 17, 1998 the Company was notified that ASB had failed to renew a lease of one of its branch locations, which accounted for approximately 17% of its total deposits and approximately 32% of its total loans at March 31, 1998. The Company determined that American Security will not be able to comply with terms of the agreement, including the representations and warranties, because of the loss of the lease by American Security. The Company began discussions with American Security to determine a solution to resolve the loss of the lease, including a possible mutual termination of the agreement. On July 27, 1998 American Security filed a lawsuit against the Company in the 13th Judicial District Court of the Parish of Evangeline seeking, among other things, specific performance of the merger agreement. American Security asserts that the Company does not have the right to terminate the agreement and that the Company has breached the agreement by asserting that it is terminated. The Company intends to vigorously pursue all remedies available to it, however, there can be no assurance that the Company will prevail in such litigation. ITEM 5. OTHER INFORMATION - ------------------------- In July 1998 the Company repurchased 421,245 shares or approximately 3.8% of its common stock in a privately negotiated transaction from a single non-affiliated shareholder at a purchase price of $52.8125 per share for a total of $22,247,001.56. These shares are being held in treasury and may be used by the Company for future acquisitions or by the Company's long-term incentive plan for future stock awards and/or options. Management believes that the repurchase of these shares will further the Company's goal of enhancing long-term shareholder value. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K - ------------------------------------------ Exhibit (27) Selected financial data. Page 12 of 13 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. HANCOCK HOLDING COMPANY ------------------------------------- Registrant August 13, 1998 By: /s/ Leo W. Seal, Jr. - --------------------------- ------------------------------------ Date Leo W. Seal, Jr. President and CEO August 13, 1998 By: /s/ George A. Schloegel - --------------------------- ------------------------------------ Date George A. Schloegel Vice-Chairman of the Board August 13, 1998 By: /s/ Carl J. Chaney - --------------------------- ------------------------------------ Date Carl J. Chaney Chief Financial Officer EX-27 2 HHC 10-Q 6/30/98 FDS
9 1,000 6-MOS DEC-31-1998 JAN-01-1998 JUN-30-1998 128,088 596 43,500 0 342,223 875,362 884,009 1,227,194 (20,688) 2,716,219 2,282,164 118,842 15,740 0 36,872 0 0 262,601 2,716,219 58,231 25,099 12,605 95,935 35,858 40,013 55,922 2,288 (63) 43,987 24,831 24,831 0 0 16,589 0.78 0.78 4.55 7,363 3,386 0 0 21,000 3,373 773 20,688 20,688 0 2,000
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