HANCOCK HOLDING CO, S-4/A, 1996-10-07

HANCOCK HOLDING CO
S-4/A, 1996-10-07
STATE COMMERCIAL BANKS

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<PAGE> 1

As filed with the Securities and Exchange Commission on October 7, 1996
Registration Number: 333-11873

- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

------------------------------

Amendment No. 1 to

Form S-4
Registration Statement Under
The Securities Act of 1933

------------------------------

HANCOCK HOLDING COMPANY
-----------------------
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C> <C>
MISSISSIPPI 6022 64-0693170
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
</TABLE>

ONE HANCOCK PLAZA, 2510 14TH STREET
GULFPORT, MISSISSIPPI 39501
(601) 868-4000
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)

CHARLES A. WEBB, JR.
ONE HANCOCK PLAZA, 2510 14TH STREET
GULFPORT, MISSISSIPPI 39501
(601) 868-4000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)

Copy to:

CARL J. CHANEY, ESQ.
WATKINS LUDLAM & STENNIS, P.A.
POST OFFICE BOX 427
633 NORTH STATE STREET
JACKSON, MISSISSIPPI 39202
(601) 949-4900
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED OFFERING: As soon as
practicable after the effective date of this Registration Statement.

If securities being registered on this Form are to be offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Title of each class Amount Proposed maximum Proposed maximum Amount of
of securities to to be offering price per aggregate offering registration
be registered registered unit price ** fee
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
$3.33 par value. . . . 450,330 shares * $5,479,037 $1,889.34
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>

* Not applicable.

** Estimated solely for purposes of determining the amount of the registration
fee in accordance with Rule 457(f)(2) under the Securities Act of 1933.

--------------------

The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.

- --------------------------------------------------------------------------------

<PAGE> 2
HANCOCK HOLDING COMPANY

CROSS-REFERENCE SHEET SHOWING THE LOCATION IN THE PROSPECTUS/PROXY STATEMENT
OF INFORMATION REQUIRED BY PART I OF FORM S-4 PURSUANT TO
ITEM 501(B) OF REGULATION S-K

<TABLE>
<CAPTION>
Item Prospectus/Proxy Statement Heading or Location
- ---- ----------------------------------------------
<S> <C> <C>
1. Forepart of Registration Statement and Forepart of Registration Statement; Outside Front
Outside Front Cover Page of Prospectus Cover Page of Prospectus

2. Inside Front and Outside Back Cover Pages of Inside Front Cover Page of Prospectus; Available
Prospectus Information; Table of Contents

3. Risk Factors, Ratio of Earnings to Fixed Summary
Charges and Other Information

4. Terms of the Transaction Summary; General Information; Information Concerning the
Mergers; Description of HHC Capital Stock; Comparative Rights
of Shareholders

5. Pro Forma Financial Information Unaudited Pro Forma Combined Financial Statements

6. Material Contacts with the Company Being Summary; Information Concerning the Mergers
Acquired

7. Additional Information Required for Reoffering Not Applicable
by Persons and Parties Deemed to be
Underwriters

8. Interest of Named Experts and Counsel Not Applicable

9. Disclosure of Commission Position on Not Applicable
Indemnification for Securities Act Liabilities

10. Information with Respect to S-3 Registrants Available Information; Documents Incorporated by Reference;
Summary; Certain Information
Concerning HHC

11. Incorporation of Certain Information by Available Information; Documents Incorporated by
Reference Reference

12. Information with Respect to S-2 or S-3 Not Applicable
Registrants

13. Incorporation of Certain Information by Not Applicable
Reference

14. Information with Respect to Registrants Other Not Applicable
than S-2 or S-3 Registrants
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
15. Information with Respect to S-3 Companies Not Applicable

16. Information with Respect to S-2 or S-3 Not Applicable
Companies

17. Information with Respect to Companies Other Summary; Selected Financial Data of CBI; Stock
than S-2 or S-3 Companies Prices and Dividends of CBI and Bank; Certain Information
Concerning CBI and Bank; Index to Financial Statements

18. Information if Proxies, Consents, or Notice of Special Joint Meeting of Shareholders;
Authorizations are to be Solicited Summary; Purpose of the Special Joint Meeting; Solicitation,
Voting and Revocation of Proxies; Shares Entitled to Vote;
Quorum; Vote Required; Information Concerning the Mergers;
Certain Information Concerning CBI and Bank; Documents
Incorporated by Reference

19. Information if Proxies, Consents, or Not Applicable
Authorizations are not to be Solicited or
in an Exchange Offer
</TABLE>
<PAGE> 4
[COMMUNITY LETTERHEAD]

October 10, 1996

Dear Shareholders:

You are cordially invited to attend a Special Joint Meeting of
Shareholders of Community Bancshares, Inc., a Louisiana corporation ("CBI") and
Community State Bank, a Louisiana state bank (the "Bank") to be held at the
Bank, 120 S. Oak Street, Hammond, Louisiana, on Wednesday, November 13, 1996,
at 1:00 p.m., local time.

At this meeting, you will be asked to consider and vote upon a
proposal to approve and adopt an Agreement and Plan of Reorganization, and
related Company Merger Agreement and Bank Merger Agreement (collectively, the
"Merger Agreement") pursuant to which (a) CBI will be merged with and into
Hancock Holding Company, a Mississippi corporation ("HHC") (the "Company
Merger"); (b) Bank will be merged with and into Hancock Bank of Louisiana (the
"Bank Merger" and, together with the Company Merger, the "Mergers"); (c) each
outstanding share of CBI common stock will be converted into the right to
receive 5.0721 shares of HHC common stock and $61.7107 in cash; provided,
however, each holder of 25 or fewer shares of CBI common stock shall not
receive HHC common stock but rather shall be entitled to receive $246.8428 for
each share of CBI common stock in accordance with the Merger Agreement; and (d)
each outstanding share of Bank common stock, other than the Bank common stock
owned by CBI, will be converted into the right to receive 6.2458 shares of HHC
common stock and $75.9904 in cash; provided, however, each holder of 25 or
fewer shares of Bank common stock shall not receive HHC common stock but rather
shall be entitled to receive $303.9616 for each share of Bank common stock, in
accordance with the Merger Agreement. Unless you dissent from the Mergers,
your CBI and/or Bank common stock will be converted into HHC common stock on a
tax-free basis, except to the extent you receive cash.

Details of the proposed transaction are set forth in the accompanying
Prospectus/Joint Proxy Statement, which you should read carefully. Only those
shareholders of record at the close of business on October 1, 1996, will be
entitled to notice of and to vote at the Special Meeting.

Your Board of Directors unanimously recommends your approval of the
Mergers. Among the factors considered by your Board in recommending the
Mergers were the financial terms of the Merger Agreement, the liquidity it will
afford CBI's and Bank's shareholders, and the likelihood and potential adverse
impact of increased competition for CBI and Bank in their market area if CBI
and Bank remain independent. For these reasons, your Board of Directors
believes that the proposed Mergers are in the best interests of CBI and Bank
and their shareholders, and urges that you vote "FOR" the proposed Mergers by
signing, dating and returning the enclosed form of proxy promptly, whether or
not you plan to attend the Special Meeting. The prompt return of your signed
proxy, regardless of the number of shares you hold, will assist CBI and Bank in
reducing the expense of additional proxy solicitation. Your proxy may be
revoked at any time prior to the vote at the Special Meeting by notice to the
Secretary of CBI or Bank or by execution and delivery of a later dated proxy.
If you attend the Special Meeting you may, if you wish, revoke your proxy and
vote in person on all matters brought before the Special Meeting.

Very truly yours,

Terrell A. Adams
President
<PAGE> 5
COMMUNITY BANCSHARES, INC.
and
COMMUNITY STATE BANK
583 W. Railroad Avenue
Independence, Louisiana 70443
(504) 878-9471

NOTICE OF SPECIAL JOINT MEETING OF SHAREHOLDERS

Notice is hereby given that a Special Joint Meeting of Shareholders of
Community Bancshares, Inc., a Louisiana corporation ("CBI") and Community State
Bank, a Louisiana state bank (the "Bank") will be held at the Bank, 120 S. Oak
Street, Hammond, Louisiana, on Wednesday, November 13, 1996, at 1:00 p.m.,
local time:

1. To consider and vote upon a proposal to approve and adopt an
Agreement and Plan of Reorganization, and related Company Merger Agreement and
Bank Merger Agreement (collectively, the "Merger Agreement") pursuant to which
(a) CBI will be merged with and into Hancock Holding Company, a Mississippi
corporation ("HHC") (the "Company Merger"); (b) Bank will be merged with and
into Hancock Bank of Louisiana (the "Bank Merger" and, together with the
Company Merger, the "Mergers"); (c) each outstanding share of CBI common stock
will be converted into the right to receive 5.0721 shares of HHC common stock
and $61.7107 in cash; provided, however, each holder of 25 or fewer shares of
CBI common stock shall not receive HHC common stock but rather shall be
entitled to receive $246.8428 for each share of CBI common stock in accordance
with the Merger Agreement; and (d) each outstanding share of Bank common stock,
other than the Bank common stock owned by CBI, will be converted into the right
to receive 6.2458 shares of HHC common stock and $75.9904 in cash; provided,
however, each holder of 25 or fewer shares of Bank common stock shall not
receive HHC common stock but rather shall be entitled to receive $303.9616 for
each share of Bank common stock, in accordance with the Merger Agreement; and

2. To transact such other business as may properly come before
the meeting and any adjournment thereof.

Only those shareholders of record at the close of business on October
1, 1996 will be entitled to notice of and to vote at the special meeting.

DISSENTING SHAREHOLDERS OF CBI WHO COMPLY WITH THE PROCEDURAL
REQUIREMENTS OF THE BUSINESS CORPORATION LAW OF LOUISIANA WILL BE ENTITLED TO
RECEIVE PAYMENT OF THE FAIR CASH VALUE OF THEIR SHARES OF CBI COMMON STOCK IF
THE COMPANY MERGER IS EFFECTED UPON APPROVAL BY LESS THAN 80 PERCENT OF THE
TOTAL VOTING POWER OF CBI. DISSENTING SHAREHOLDERS OF BANK WHO COMPLY WITH THE
PROCEDURAL REQUIREMENTS OF THE LOUISIANA BANKING LAWS WILL BE ENTITLED TO
RECEIVE PAYMENT OF THE FAIR CASH VALUE OF THEIR SHARES OF BANK COMMON STOCK IF
THE BANK MERGER IS EFFECTED UPON APPROVAL BY LESS THAN 80 PERCENT OF THE TOTAL
VOTING POWER OF BANK.

BY ORDER OF THE BOARDS OF DIRECTORS

Sandra Hendon, Secretary/Cashier

Independence, Louisiana

October 10, 1996

YOUR VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES THAT YOU OWN. EVEN
IF YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE DATE AND SIGN THE ENCLOSED
PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO
POSTAGE. YOUR PROXY MAY BE REVOKED AT ANY TIME PRIOR TO THE VOTE AT THE
SPECIAL MEETING BY NOTICE TO THE SECRETARY OF CBI OR BANK OR BY EXECUTION AND
DELIVERY OF A LATER DATED PROXY. IF YOU ATTEND THE SPECIAL MEETING, YOU MAY
WITHDRAW YOUR PROXY AND VOTE IN PERSON.
<PAGE> 6
JOINT PROXY STATEMENT OF COMMUNITY BANCSHARES, INC.
AND
COMMUNITY STATE BANK

Special Joint Meeting of Shareholders
to be held on Wednesday, November 13, 1996

------------------------------

PROSPECTUS OF HANCOCK HOLDING COMPANY

450,330 Shares of Common Stock
($3.33 Par Value)

Hancock Holding Company, a Mississippi corporation ("HHC"), has filed
a Registration Statement on Form S-4 to register 450,330 shares of HHC's common
stock, $3.33 par value ("HHC Common Stock"), under the Securities Act of 1933
to be issued in connection with a proposed merger of Community Bancshares,
Inc., a Louisiana corporation ("CBI") with and into HHC (the "Company Merger")
and a proposed merger of Community State Bank, a Louisiana state chartered bank
(the "Bank") with and into Hancock Bank of Louisiana, a Louisiana state
chartered bank ("Hancock Bank") (the "Bank Merger" and, together with the
Company Merger, the "Mergers").

This document constitutes a Joint Proxy Statement of CBI and Bank in
connection with the transactions described herein and a Prospectus of HHC with
respect to the shares of HHC Common Stock to be issued if the Mergers are
consummated.

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS/JOINT PROXY STATEMENT IN
CONNECTION WITH THE OFFERING DESCRIBED HEREIN AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION SHOULD NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY HHC, CBI OR BANK. THIS PROSPECTUS/JOINT PROXY STATEMENT DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO PURCHASE NOR SHALL
THERE BE ANY SALE OF THE SECURITIES OFFERED BY THIS PROSPECTUS/JOINT PROXY
STATEMENT IN ANY JURISDICTION IN WHICH, OR TO ANY PERSON TO WHOM, IT WOULD BE
UNLAWFUL TO MAKE SUCH OFFER, SOLICITATION, OR SALE. NEITHER THE DELIVERY OF
THIS PROSPECTUS/JOINT PROXY STATEMENT NOR ANY OFFER OR SALE MADE HEREUNDER NOR
ANY DISTRIBUTION OF THE SECURITIES TO WHICH THIS PROSPECTUS/JOINT PROXY
STATEMENT RELATES SHALL, UNDER ANY CIRCUMSTANCES, IMPLY THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF HHC, CBI OR BANK SINCE THE DATE HEREOF.

------------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION ("SEC") OR ANY STATE SECURITIES COMMISSION
NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS/JOINT PROXY STATEMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

------------------------------

THE SECURITIES OFFERED HEREBY ARE NOT DEPOSITS, SAVINGS ACCOUNTS OR
OTHER OBLIGATIONS OF A DEPOSITORY INSTITUTION AND ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.

The date of this Prospectus/Joint Proxy Statement is October 10, 1996.

<PAGE> 7
AVAILABLE INFORMATION

HHC is subject to the reporting requirements of the Securities and
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the SEC.
Copies of such reports, proxy statements and other information can be obtained,
at prescribed rates, from the SEC by addressing written requests for such
copies to the Public Reference Section of the SEC at Room 1024, 450 Fifth
Street, N.W., Judiciary Plaza, Washington, D.C. 20549. In addition, such
reports, proxy statements and other information can be inspected at the public
reference facilities referred to above and at the regional offices of the SEC
at 7 World Trade Center, Suite 1300, New York, New York 10048 and Citicorp
Center, 300 West Madison Street, Suite 1400, Chicago, Illinois 60661. The SEC
also maintains a Web site that contains reports, proxy and information
statements and other information regarding registrants that file
electronically, including the Company, with the Commission at
http://www.sec.gov.

This Prospectus/Joint Proxy Statement constitutes part of the
Registration Statement on Form S-4 of HHC (including any exhibits and
amendments thereto, the "Registration Statement") filed with the SEC under the
Securities Act of 1933 as amended (the "Securities Act"), relating to the
shares of HHC common stock offered hereby. This Prospectus/Joint Proxy
Statement does not include all of the information and undertakings in the
Registration Statement and exhibits thereto. For further information about HHC
and the shares of common stock offered hereby, reference is made to the
Registration Statement and exhibits thereto. Statements contained in this
Prospectus/Joint Proxy Statement as to the contents of any contract or other
document referred to are not necessarily complete, and in each instance
reference is made to a copy of such contract or other document filed as an
exhibit to the Registration Statement, each such statement being qualified in
all respects by such reference. The Registration Statement may be inspected
and copied, at prescribed rates, at the SEC's public reference facilities at
the addresses set forth above.

Except for the historical information contained herein, the matters
discussed in this Prospectus/Joint Proxy Statement are forward-looking
statements which involve risks and uncertainties, including but not limited to
economic, competitive, regulatory and technological factors affecting HHC's
operations, markets, services, products and prices, and other factors discussed
in HHC's filings with the SEC.

THIS PROSPECTUS/JOINT PROXY STATEMENT INCORPORATES DOCUMENTS BY
REFERENCE WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. THESE
DOCUMENTS ARE AVAILABLE UPON REQUEST, WITHOUT CHARGE FROM CHARLES A. WEBB, JR.,
CORPORATE SECRETARY, HANCOCK HOLDING COMPANY, ONE HANCOCK PLAZA, GULFPORT,
MISSISSIPPI 39501 (601) 868-4000. IN ORDER TO ENSURE TIMELY DELIVERY OF THE
DOCUMENTS, ANY REQUEST SHOULD BE MADE BY NOVEMBER 5, 1996. SEE "DOCUMENTS
INCORPORATED BY REFERENCE."

DOCUMENTS INCORPORATED BY REFERENCE

The following documents previously filed with the SEC by HHC pursuant
to the Exchange Act are hereby incorporated by reference:

1. HHC's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995;
2. The Proxy Statement of HHC for its Annual Meeting of
Shareholders held on February 22, 1996;
3. HHC's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1996;
4. HHC's Quarterly Report on Form 10-Q for the quarter ended June
30, 1996; and
5. All other reports filed by HHC pursuant to Section 13(a) or
15(d) of the Exchange Act, since December 31, 1995.
<PAGE> 8
All documents filed by HHC pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus/Joint Proxy
Statement and prior to final adjournment of the Special Meeting, shall be
deemed to be incorporated by reference into this Prospectus/Joint Proxy
Statement and to be a part hereof from the date of filing of such documents.
Any statement contained in any document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus/Joint Proxy Statement to the extent that a
statement contained herein or in any subsequently filed document which also is,
or is deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed to
constitute a part of this Prospectus/Joint Proxy Statement, except as so
modified or superseded. The audited financial statements of HHC incorporated
herein by reference should only be read in conjunction with the discussion of
consummated and pending acquisitions set forth under the caption "CERTAIN
INFORMATION CONCERNING HHC."
<PAGE> 9
TABLE OF CONTENTS

<TABLE>
<S> <C>
SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
The Companies . . . . . . . . . . . . . . . . . . . . . . . . . . 1
The Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
The Special Joint Meeting . . . . . . . . . . . . . . . . . . . . 2
Purpose of the Special Joint Meeting . . . . . . . . . . . . . . . 2
Vote Required . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Recommendation of Boards of Directors . . . . . . . . . . . . . . 3
Basis for the Terms of the Merger . . . . . . . . . . . . . . . . 3
Conversion of CBI and Bank Stock . . . . . . . . . . . . . . . . . 3
Exchange of Certificates . . . . . . . . . . . . . . . . . . . . . 4
Regulatory Approvals and Other Conditions to the Merger . . . . . 4
Waiver, Amendment and Termination . . . . . . . . . . . . . . . . 4
Interests of Certain Persons in the Mergers . . . . . . . . . . . 5
Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . 5
Material Federal Income Tax Consequences . . . . . . . . . . . . . 5
Dissenters' Rights . . . . . . . . . . . . . . . . . . . . . . . . 5
Selected Consolidated Financial Information for CBI and HHC. . . . 7
Comparative Per Share Data (Unaudited) . . . . . . . . . . . . . . 7
Recent Stock Prices . . . . . . . . . . . . . . . . . . . . . . . 8
Effect of the Mergers on Rights of Shareholders . . . . . . . . . 9
Resales of HHC Common Stock by Affiliates . . . . . . . . . . . . 9
Accounting Treatment . . . . . . . . . . . . . . . . . . . . . . . 9

GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Purpose of the Special Joint Meeting . . . . . . . . . . . . . . . 9
Solicitation, Voting and Revocation of Proxies . . . . . . . . . . 10
Shares Entitled to Vote; Quorum; Vote Required . . . . . . . . . . 10
Vote Required . . . . . . . . . . . . . . . . . . . . . . . . . . 10

INFORMATION CONCERNING THE MERGERS . . . . . . . . . . . . . . . . . . . . 11
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Background of and Reasons for the Mergers . . . . . . . . . . . . 11
Conversion of CBI and Bank Common Stock . . . . . . . . . . . . . 12
Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Exchange of Certificates . . . . . . . . . . . . . . . . . . . . . 13
Regulatory Approvals and Other Conditions to the Mergers . . . . . 15
Conduct of Business Prior to the Effective Date . . . . . . . . . 16
Waiver, Amendment and Termination . . . . . . . . . . . . . . . . 17
Interests of Certain Persons in the Mergers . . . . . . . . . . . 18
Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . 18
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Status Under Federal Securities Laws; Certain Restrictions on
Resales of Securities . . . . . . . . . . . . . . . . . . . . . 19
Accounting Treatment . . . . . . . . . . . . . . . . . . . . . . . 19

MATERIAL FEDERAL INCOME TAX CONSEQUENCES OF THE MERGERS . . . . . . . . . . 19

DISSENTERS' RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS . . . . . . . . . . . . . 25

CERTAIN INFORMATION CONCERNING CBI AND BANK . . . . . . . . . . . . . . . . 26
Principal Business . . . . . . . . . . . . . . . . . . . . . . . . 26
</TABLE>

i
<PAGE> 10
<TABLE>
<S> <C>
Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Seasonality of Business and Customers . . . . . . . . . . . . . . 26
Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . 27
Stock Prices and Dividends . . . . . . . . . . . . . . . . . . . . 27
Security Ownership of Principal Shareholders and Management . . . 28

COMMUNITY BANCSHARES, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS . . . . . . . . . . . . . . . 30

ANALYSIS OF FINANCIAL CONDITION . . . . . . . . . . . . . . . . . . . . . . 35

CERTAIN STATISTICAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . 37

MANAGEMENT OF CBI AND BANK . . . . . . . . . . . . . . . . . . . . . . . . 43
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . 43
Executive Officers of CBI . . . . . . . . . . . . . . . . . . . . 44
Executive Officers of Bank . . . . . . . . . . . . . . . . . . . . 44
Compensation Pursuant to Plans . . . . . . . . . . . . . . . . . . 45
Transactions with Management . . . . . . . . . . . . . . . . . . . 45

CERTAIN INFORMATION CONCERNING HHC . . . . . . . . . . . . . . . . . . . . 46
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Merger and Acquisition History . . . . . . . . . . . . . . . . . . 46
Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . 47
Changes in Control . . . . . . . . . . . . . . . . . . . . . . . . 47
Additional Information . . . . . . . . . . . . . . . . . . . . . . 48

DESCRIPTION OF HHC CAPITAL STOCK . . . . . . . . . . . . . . . . . . . . . 49
Authorized and Outstanding Stock . . . . . . . . . . . . . . . . . 49
Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Dividend Rights . . . . . . . . . . . . . . . . . . . . . . . . . 49
Preemptive Rights . . . . . . . . . . . . . . . . . . . . . . . . 49
Fully Paid and Nonassessable . . . . . . . . . . . . . . . . . . . 49
Liquidation Rights . . . . . . . . . . . . . . . . . . . . . . . . 49
Limitation of Liability of Directors . . . . . . . . . . . . . . . 50
Indemnification of Directors, Officers and Employees . . . . . . . 50
Transfer Agent . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Changes in Control . . . . . . . . . . . . . . . . . . . . . . . . 50

COMPARISON RIGHTS OF SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . 51
Authorized Capital . . . . . . . . . . . . . . . . . . . . . . . . 51
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . 51
Removal of Directors . . . . . . . . . . . . . . . . . . . . . . . 52
Vacancies in the Board of Directors . . . . . . . . . . . . . . . 52
Amendment of the Articles of Incorporation . . . . . . . . . . . . 52
Amendment of Bylaws . . . . . . . . . . . . . . . . . . . . . . . 53
Special Joint Meetings of Shareholders . . . . . . . . . . . . . . 53
Preemptive Rights . . . . . . . . . . . . . . . . . . . . . . . . 54
Reports to Shareholders . . . . . . . . . . . . . . . . . . . . . 54
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Redemption and Retirement . . . . . . . . . . . . . . . . . . . . 55
Stockholders' Inspection Rights . . . . . . . . . . . . . . . . . 55
Limitation of Liability of Directors . . . . . . . . . . . . . . . 56
Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . 56
Supermajority Voting Requirements; Business Combinations . . . . . 57
</TABLE>

ii
<PAGE> 11
<TABLE>
<S> <C>
Appraisal Rights . . . . . . . . . . . . . . . . . . . . . . . . . 58

LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

OTHER MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

INDEX TO CBI FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . F-1

APPENDIX A -- Agreement and Plan of Reorganization . . . . . . . . . . . A-1

APPENDIX B -- Excerpts from Section 131 of the Louisiana Business
Corporation Law . . . . . . . . . . . . . . . . . . . . B-1

APPENDIX C -- Excerpts from Section 376 of the Louisiana Banking Laws . . C-1
</TABLE>

iii
<PAGE> 12
SUMMARY

The following is a brief summary of certain information contained
elsewhere in this Prospectus/Joint Proxy Statement. The summary is necessarily
incomplete and is qualified in its entirety by reference to detailed
information contained elsewhere herein, the appendices hereto and the documents
incorporated herein by reference. Shareholders are urged to read carefully all
such material.

THE COMPANIES

Hancock Holding Company. HHC is a bank holding company chartered,
organized and existing under and pursuant to the laws of the State of
Mississippi with its principal executive office located at One Hancock Plaza,
Gulfport, Mississippi 39501. The telephone number of HHC's principal
executive office is (601) 868-4000. HHC owns all of the issued and outstanding
common stock of Hancock Bank of Louisiana ("Hancock Bank"), a state bank
chartered, organized and existing under and pursuant to the laws of the State
of Louisiana and maintaining its principal place of business in Baton Rouge,
Louisiana. HHC also owns all of the issued and outstanding common stock of
Hancock Bank ("Hancock Bank MS"), a state bank chartered, organized and
existing under and pursuant to the laws of the State of Mississippi and
maintaining its principal place of business in Gulfport, Mississippi. HHC was
organized on April 6, 1984, for the purpose of becoming a bank holding company
under the Bank Holding Company Act of 1956, as amended, and acquiring all the
stock of Hancock Bank MS. At June 30, 1996, HHC had total consolidated assets
of approximately $2.3 billion and shareholders' equity of approximately $234.4
million. Of HHC's $2.3 billion in assets as of June 30, 1996, approximately
$0.8 billion were in Louisiana and approximately $1.5 billion were in
Mississippi. See "CERTAIN INFORMATION CONCERNING HHC."

Community Bancshares, Inc. CBI is a Louisiana corporation organized
in October 9, 1981 for the purpose of becoming a bank holding company under the
Bank Holding Company Act of 1956, as amended, and acquiring a majority of the
stock of Community State Bank ("Bank"). At June 30, 1996, CBI had total
consolidated assets of approximately $91.1 million and shareholders' equity of
approximately $10.8 million. CBI is domiciled in Independence, Louisiana and
its principal executive office is located at 120 S. Oak Street, Hammond,
Louisiana, and its telephone number is (504) 345-8161. See "CERTAIN
INFORMATION CONCERNING CBI AND BANK."

THE BANKS

Hancock Bank of Louisiana. Hancock Bank, a Louisiana state chartered
bank organized in August 1990, is a wholly-owned subsidiary of HHC. Hancock
Bank is community oriented and focuses primarily on offering commercial,
consumer and mortgage loans and deposit services to individuals and small to
middle market businesses in its market area. Hancock Bank's operating strategy
is to provide its customers with the financial sophistication and breadth of
products of a regional bank while successfully retaining the local appeal and
level of service of a community bank. At June 30, 1996, Hancock Bank's
services were delivered through a network of 23 full-service locations,
including a main office in Baton Rouge and 22 branches located throughout East
Baton Rouge and Washington Parishes. At June 30, 1996, Hancock Bank had total
assets of approximately $685.9 million and total deposits of approximately
$576.2 million. Hancock Bank's principal executive offices are located at One
American Place, 301 Main Street, Baton Rouge, Louisiana, and its telephone
number is (504) 292-0336. See "CERTAIN INFORMATION CONCERNING HHC."

Community State Bank. Bank, a Louisiana state chartered bank
organized in May 31, 1944, is a majority-owned subsidiary of CBI. Bank
provides traditional consumer and commercial deposit and loan services to the
individuals, families and businesses in Tangipahoa Parish, Louisiana. Bank's
services are delivered through a network of 4 full-service locations, including
a main office in Independence and 3 branches. In addition to traditional bank
services, Bank offers mortgage loans, VISA and trust services. At June 30,
1996, Bank had total assets of approximately $91.1 million and total deposits
of approximately $79.4 million. Bank is domiciled in

1
<PAGE> 13
Independence, Louisiana and its principal executive office is located at 120 S.
Oak Street, Hammond, Louisiana, and its telephone number is (504) 345-8161.
See "CERTAIN INFORMATION CONCERNING CBI AND BANK."

THE SPECIAL JOINT MEETING

A special joint meeting of the shareholders of CBI and Bank will be
held at the offices of Bank, 120 S. Oak Street, Hammond, Louisiana, on
Wednesday, November 13, 1996 at 1:00 p.m., local time (the "Special Joint
Meeting"). Only record holders of: (i) common stock, $5.00 par value, of CBI
("CBI Common Stock"); and/or (ii) common stock, $5.00 par value, of Bank ("Bank
Common Stock") on October 1, 1996 (the "Record Date") are entitled to notice of
and to vote at the Special Joint Meeting. On the Record Date, there were
87,494 shares of CBI Common Stock outstanding and 72,050 shares of Bank Common
Stock outstanding.

PURPOSE OF THE SPECIAL JOINT MEETING

The purpose of the Special Joint Meeting is to consider and vote upon
a proposal to approve and adopt an Agreement and Plan of Reorganization, and
related Company Merger Agreement and Bank Merger Agreement (collectively, the
"Merger Agreement"), pursuant to which (a) CBI will be merged with and into HHC
(the "Company Merger"); (b) Bank will be merged with and into Hancock Bank (the
"Bank Merger" and, together with the Company Merger, the "Mergers"); (c) each
outstanding share of CBI Common Stock will be converted into the right to
receive 5.0721 shares of HHC common stock, $3.33 par value ("HHC Common Stock")
and $61.7107 in cash; provided, however, each holder of 25 or fewer shares of
CBI Common Stock shall not be entitled to receive HHC Common Stock but rather
shall be entitled to receive $246.8428 for each share of CBI Common Stock; and
(d) each outstanding share of Bank Common Stock, other than the Bank Common
Stock owned by CBI, will be converted into the right to receive 6.2458 shares
of HHC Common Stock and $75.9904 in cash; provided, however, each holder of 25
or fewer shares of Bank Common Stock shall not be entitled to HHC Common Stock
but rather shall be entitled to receive $303.9616 for each share of Bank Common
Stock, all in accordance with the Merger Agreement. See "GENERAL INFORMATION
- -- Purpose of the Special Joint Meeting."

VOTE REQUIRED

Approval of the Company Merger Agreement will require the affirmative
vote of the holders of at least a majority of the outstanding shares of CBI
Common Sock actually cast, in person or by proxy, at the Special Joint Meeting.
Each shareholder of CBI Common Stock is entitled to one vote for each share
owned by him. As of the Record Date, directors and executive officers of CBI
and their affiliates were the beneficial owners of approximately 44.76 percent
of the outstanding CBI Common Stock entitled to vote at the Special Joint
Meeting. As a condition to consummation of the Mergers, each director and
certain shareholders of CBI have executed agreements ("Joinder Agreements")
with HHC, which, among other things, obligates each such director or
shareholder to vote his shares of CBI Common Stock in favor of the approval and
adoption of the Merger Agreement. As of the Record Date, the 11 persons who
have executed Joinder Agreements beneficially owned an aggregate of 44.76
percent of the outstanding CBI Common Stock. Under Mississippi law,
shareholders of HHC are not required to approve the Merger Agreement. See
"GENERAL INFORMATION -- Shares Entitled to Vote; Quorum; Vote Required."

Approval of the Bank Merger Agreement will require the affirmative
vote of the holders of at least two-thirds of the total voting power of Bank
present, in person or by proxy, at the Special Joint Meeting. Each shareholder
of Bank Common Stock is entitled to one vote for each share owned by him. As
of the Record Date CBI owned 98.5% of the outstanding Bank Common Stock
entitled to vote at the Special Joint Meeting. CBI has indicated its intention
to vote in favor of the Bank Merger at the Special Joint Meeting. As a result,
assuming CBI votes in favor of the Bank Merger, no further action on the part
of the Bank shareholders is necessary to effectuate the Bank Merger. See
"GENERAL INFORMATION -- Shares Entitled to Vote; Quorum; Vote Required."

2
<PAGE> 14
RECOMMENDATION OF BOARDS OF DIRECTORS

The Board of Directors of CBI and Bank believes that the Merger
Agreement is in the best interests of the shareholders and recommends that the
shareholders vote "FOR" the approval and adoption of the Merger Agreement.
CBI's and Bank's Board of Directors believes that the terms of the Merger
Agreement will provide significant value to all CBI and Bank shareholders and
will enable them to participate in opportunities for growth that CBI's and
Bank's Board of Directors believes the Mergers make possible. In recommending
the Merger Agreement to the shareholders, CBI's and Bank's Board of Directors
considered, among other factors, the financial terms of the Merger Agreement,
the liquidity it will afford CBI's and Bank's shareholders, and the likelihood
and potential adverse impact of increased competition for CBI and Bank in their
market area if CBI and Bank remain independent. See "INFORMATION CONCERNING
THE MERGERS -- Background of and Reasons for the Mergers."

BASIS FOR THE TERMS OF THE MERGER

A number of factors in addition to those stated above were considered
by the Board of Directors of CBI and Bank in approving the terms of the Merger
Agreement, including, without limitation, information concerning the business,
financial condition, results of operations and prospects of CBI, HHC, Bank and
Hancock Bank; the ability of the combined entity to compete in the relevant
banking markets; the proposed treatment of the CBI Common Stock in the Company
Merger and Bank Common Stock in the Bank Merger; the market price of HHC Common
Stock; the absence of an active trading market for CBI Common Stock; the
federal tax consequences of the Merger Agreement to CBI's and Bank's
shareholders, to the extent HHC Common Stock is received, for federal income
tax purposes; the financial terms of other business combinations in the banking
industry; and certain non-monetary factors. See "INFORMATION CONCERNING THE
MERGERS -- Background of and Reasons for the Mergers."

CONVERSION OF CBI AND BANK STOCK

On the Effective Date, as defined in "SUMMARY - Regulatory Approvals
and Other Conditions to the Mergers," each share of HHC Common Stock issued and
outstanding immediately prior to the Effective Date will remain outstanding and
will continue to represent one share of HHC Common Stock, $3.33 par value.
Each share of $5.00 par value CBI Common Stock, issued and outstanding
immediately prior to the Effective Date will be converted into the right to
receive 5.0721 shares of HHC Common Stock and $61.7107 in cash; provided,
however, each holder of 25 or fewer shares of CBI Common Stock shall not
receive HHC Common Stock but rather shall be entitled to receive $246.8428 for
each share of CBI Common Stock (the "CBI Exchange Ratio") and each share of
$5.00 par value Bank Common Stock, issued and outstanding immediately prior to
the Effective Date, other than those held by CBI, will be converted into the
right to receive 6.2458 shares of HHC Common Stock and $75.9904 in cash;
provided, however, each holder of 25 or fewer shares of Bank Common Stock shall
not receive HHC Common Stock but rather shall be entitled to receive $303.9616
for each share of Bank Common Stock (the "Bank Exchange Ratio" and together
with the CBI Exchange Ratio, the "Exchange Ratios").

As a result of the Mergers, all shares of CBI and Bank Common Stock
will be canceled and each holder of a certificate (a "Certificate")
representing any share(s) of CBI or Bank Common Stock will thereafter cease to
have any rights with respect to such shares, except the right to receive,
without interest, the HHC Common Stock and/or the cash as described above, and
cash for fractional shares of HHC Common Stock upon the surrender of such
Certificate. No fractional shares of HHC Common Stock will be issued in
connection with the Mergers. In lieu of the issuance of any fractional share
of HHC Common Stock, cash adjustments will be paid to holders in respect of any
fractional share of HHC Common Stock that would otherwise be issuable, and the
amount of such cash adjustment will be equal to such fractional proportion of
$36.50.

3
<PAGE> 15
EXCHANGE OF CERTIFICATES

HHC will deposit with Hancock Bank MS Trust Department, as exchange
agent (the "Exchange Agent"), certificates representing the shares of HHC
Common Stock and cash to be issued and paid, respectively, pursuant to the
Merger Agreement in exchange for outstanding shares of CBI and Bank Common
Stock. HHC will cause the Exchange Agent to mail to each holder, other than
CBI, of CBI and Bank Common Stock a letter of transmittal which will specify
terms of the delivery of the CBI and Bank certificates to the Exchange Agent
along with instructions for effecting the surrender of the certificates in
exchange for certificates representing shares of HHC Common Stock and/or cash,
and cash in lieu of fractional shares.

No dividends on HHC Common Stock will be paid with respect to any
shares of CBI or Bank Common Stock represented by a certificate until such
certificate is surrendered for exchange.

REGULATORY APPROVALS AND OTHER CONDITIONS TO THE MERGERS

The Company Merger is subject to approval by the Board of Governors of
the Federal Reserve System ("FRB"). The Bank Merger is subject to approval by
the Federal Deposit Insurance Corporation ("FDIC") and the Office of Financial
Institutions, State of Louisiana ("OFI"). There can be no assurance whether
such approvals will be given, or will be given without unacceptable conditions
and, if given, the timing of such approvals. After approval by the CBI and
Bank shareholders, consummation of the Mergers is also subject to a number of
conditions included in the Merger Agreement. See "INFORMATION CONCERNING THE
MERGERS -- Regulatory Approvals and Other Conditions to the Mergers."

The Mergers will become effective on the date the Secretary of State
of the State of Louisiana issues a Certificate of Merger and following the
satisfaction or waiver of all conditions set forth in the Merger Agreement (the
"Effective Date").

WAIVER, AMENDMENT AND TERMINATION

CBI and HHC may waive their respective rights, power or privileges
under the Merger Agreement subject to certain conditions specified in the
Merger Agreement. The Merger Agreement cannot be amended or modified except
pursuant to a written agreement subscribed by duly authorized representatives
of CBI and HHC. The Merger Agreement cannot be assigned without the express
written consent of both HHC and CBI.

The Merger Agreement may be terminated either before or after approval
by CBI's and Bank's shareholders (i) at any time on or prior to the Effective
Date, by the mutual consent in writing of a majority of the members of the
Board of Directors of HHC, Hancock Bank, CBI and Bank; (ii) by HHC in writing
or by CBI in writing, if the Mergers have not become effective on or before
December 31, 1996, unless the absence of such occurrence is due to the failure
of the party seeking to terminate the Merger Agreement to perform each of its
obligations required thereby to be performed on or prior to the Effective Date;
(iii) by HHC, Hancock Bank, CBI or Bank in the event of a breach by the other
party (a) of any covenant or agreement contained in the Merger Agreement or (b)
of any representation or warranty in the Merger Agreement under certain
specified circumstances; (iv) by HHC, Hancock Bank, CBI or Bank at any time
after the FRB, FDIC or OFI has denied any application for any approval or
clearance required to be obtained as a condition to the consummation of the
Mergers and the time period for all appeals or requests for reconsideration has
run; (v) by CBI, Bank, HHC or Hancock Bank if the Company Merger is not
approved by the required vote of CBI's shareholders or the Bank Merger is not
approved by the required vote of Bank's shareholders; (vi) by HHC if holders of
ten percent or more of the outstanding CBI Common Stock

4
<PAGE> 16
exercise statutory rights of dissent and appraisal pursuant to Section 131 of
the Louisiana Business Corporation Law ("LBCL").

Except under certain circumstances specified in the Merger Agreement,
upon termination, there will be no liability on the part of either party or
their respective directors, officers, employees, agents or shareholders.

INTERESTS OF CERTAIN PERSONS IN THE MERGERS

Certain members of the Bank's and CBI's management and Board of
Directors have interests in the mergers in addition to their interests as
shareholders of the Bank and CBI generally. Those interests relate to life
insurance policies, continued employment with Hancock Bank of Louisiana and
employee benefits that will be provided by Hancock Bank of Louisiana. See
"INFORMATION CONCERNING THE MERGERS -- Interests of Certain Persons in the
Mergers" and "-- Employee Benefits."

EMPLOYEE BENEFITS

CBI's and Bank's Group Health and Life Benefit Plan will be continued
through the Effective Date of the Mergers. Thereafter, all retained employees
will be eligible to participate in Hancock Bank MS's Medical Benefit Plan based
on the provisions in the Plan. The ninety-day employment period will be waived
for eligible retained employees in accordance with Hancock Bank MS's Plan.
Hancock Bank will waive pre-existing medical conditions for health insurance
purposes as to all retained personnel. CBI's and Bank's 401K Plan will remain
operative and in effect through the Effective Date of the Mergers. The Plan
will be terminated as of the Effective Date of the Mergers and distributed to
vested employees of CBI and Bank in accordance with the terms of the Plan after
the normal and customary contributions have been made consistent with past
practices. All termination costs will be paid from the Plan's assets. All
retained employees will be eligible to enter the Hancock Bank MS Profit Sharing
Plan, Hancock Bank MS 401K Plan, and Hancock Bank MS Pension Plan based on the
provisions set forth in the respective plans. All retained employees will be
granted full credit for all prior service for vesting, eligibility and benefit
purposes for the Hancock Bank MS Profit Sharing Plan, for eligibility purposes
for the Hancock Bank MS 401K Plan, and for vesting and eligibility purposes for
the Hancock Bank MS Pension Plan. All other CBI and Bank benefit plans will
continue through the Effective Date of the Mergers. Thereafter, all retained
employees will be eligible to participate in all Hancock Bank MS employment
benefit plans not set forth above based on the provisions set forth in the
plans with full credit for all prior service.

MATERIAL FEDERAL INCOME TAX CONSEQUENCES

The Mergers will qualify as tax-free reorganizations under the
Internal Revenue Code of 1986, as amended (the "Code"), and each CBI and Bank
shareholder who receives HHC Common Stock in the Mergers will not recognize
gain or loss, except with respect to the receipt of cash (i) as part of the
Exchange Ratios, (ii) in lieu of fractional shares of HHC Common Stock, or
(iii) pursuant to the exercise of dissenters' rights. See "MATERIAL FEDERAL
INCOME TAX CONSEQUENCES OF THE MERGERS."

DISSENTERS' RIGHTS

By complying with the specific procedures required by statute and
described herein, unless the Company Merger Agreement is approved by the
holders of at least 80 percent of the total voting power of CBI, dissenting
shareholders of CBI may be entitled to be paid the fair value of their shares,
if the Company Merger is consummated, in lieu of the consideration to be
received in the Company Merger by the non-dissenting shareholders of CBI. See
"DISSENTERS' RIGHTS."

5
<PAGE> 17
By complying with the specific procedures required by statute and
described herein, unless the Bank Merger Agreement is approved by the holders
of at least 80 percent of the total voting power of Bank, dissenting
shareholders of Bank may be entitled to be paid the fair value of their shares,
if the Bank Merger is consummated, in lieu of the consideration to be received
in the Bank Merger by the non-dissenting shareholders of Bank. In the event
CBI votes the stock of Bank which it owns (98.5%) in favor of the Bank Merger
Agreement, shareholders of Bank will not have dissenters' rights in the Bank
Merger. See "DISSENTERS' RIGHTS."

6
<PAGE> 18
SELECTED CONSOLIDATED FINANCIAL INFORMATION FOR CBI AND HHC

The following selected consolidated financial information of CBI and HHC
should be read in conjunction with the consolidated financial statements of CBI
and HHC and the notes thereto, included elsewhere, or incorporated by reference
herein.

The following selected unaudited pro forma financial information is
presented assuming the proposed mergers of HHC and CBI as well as the
subsequent merger of the combined entity with Southeast National Bank, Hammond,
LA (Southeast) will be accounted for using the purchase method of accounting.
The unaudited pro forma finanical information assumes the mergers were
consummated on June 30, 1996 with respect to the balance sheet data and as of
the beginning of the period presented with respect to the income statement
data, and subject to the purchase adjustments reflects the combination of the
historical consolidated financial statements of the respective companies
commencing as of each such date. The unaudited pro forma information does not
purport to represent what HHC's, CBI's and Southeast's combined results of
operations would have been if the respective mergers had occurred as of the
dates indicated or will be for any future period. The selected unaudited pro
forma financial information should be read in conjunction with the Unaudited
Pro Forma Combined Financial Statements and notes thereto, included elsewhere
herein.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, YEARS ENDED DECEMBER 31,
---------------------- --------------------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
--------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
COMMUNITY BANCSHARES, INC. (HISTORICAL)
INCOME STATEMENT DATA:
Net interest income $1,616 $1,558 $3,138 $3,360 $3,384 $3,228 $2,726
Provision for loan losses 20 0 0 0 10 125 150
Net income 591 321 885 1,056 1,152 1,026 520
BALANCE SHEET DATA:
Total assets (period end) $91,136 $84,462 $93,485 $86,258 $84,945 $83,283 $77,079
Net Loans 36,342 34,890 34,890 30,790 25,664 23,755 23,094
Deposits 79,420 82,250 82,258 75,759 75,235 74,321 68,748
Stockholders' equity (period end) 10,811 10,026 10,538 9,987 9,258 8,428 7,653
PER SHARE DATA:
Earnings Per Share $6.66 $3.61 $9.96 $8.15 $9.38 $8.75 $3.06
Dividends Declared 1.80 1.50 3.75 3.75 3.60 2.80 2.80
Dividends Paid 2.40 2.25 3.75 3.75 2.80 2.80 2.80
Shares Outstanding 87,494 87,494 87,494 87,494 87,494 87,494 87,454
SELECTED RATIOS:
Return on Average Assets 1.26% 0.74% 1.02% 1.22% 1.37% 1.28% 0.67%
Return on Average Equity 11.00% 6.36% 8.51% 10.69% 13.03% 12.76% 6.94%
Equity to Assets 11.86% 11.87% 11.27% 11.58% 10.90% 10.12% 9.93%
Dividend Payout 35.53% 61.33% 37.07% 31.07% 21.27% 23.88% 47.09%

HANCOCK HOLDING COMPANY (HISTORICAL)
INCOME STATEMENT DATA:
Net interest income $52,496 $49,252 $100,367 $86,282 $85,319 $81,819 $62,702
Provision for loan losses 1,801 1,177 4,425 1,998 4,632 7,978 5,003
Net income 15,800 13,392 27,017 23,130 24,862 21,410 13,883
BALANCE SHEET DATA:
Total assets (period end) $2,276,357 $2,207,190 $2,234,286 $2,026,929 $1,988,125 $1,899,709 $1,719,805
Net Loans 1,070,561 993,125 1,034,977 925,665 921,925 839,613 812,161
Deposits 1,939,115 1,901,514 1,927,681 1,775,664 1,759,189 1,693,255 1,512,365
Stockholders' equity (period end) 234,447 214,962 224,179 182,277 166,712 148,822 132,731
PER SHARE DATA:
Earnings Per Share $1.78 $1.51 $3.05 $2.86 $3.07 $2.65 $2.08
Dividends Declared 0.50 0.46 0.96 0.92 0.90 0.68 0.60
Dividends Paid 0.50 0.46 0.96 0.92 0.90 0.68 0.60
Shares Outstanding 8,880 8,879 8,853 8,099 8,093 8,093 6,665
SELECTED RATIOS:
Return on Average Assets 1.37% 1.23% 1.22% 1.13% 1.27% 1.17% 0.84%
Return on Average Equity 14.09% 12.62% 12.50% 13.22% 15.61% 15.18% 13.09%
Equity to Assets 10.30% 9.74% 10.03% 8.99% 8.39% 7.83% 7.72%
Dividend Payout 28.55% 30.99% 32.06% 31.90% 28.03% 24.82% 25.25%

HANCOCK HOLDING COMPANY (PRO FORMA)
(Unaudited)
INCOME STATEMENT DATA:
Net interest income $54,664 $51,376 $104,673
Provision for loan losses 1,821 1,177 4,291
Net income 15,996 13,333 27,309
BALANCE SHEET DATA:
Total assets (period end) $2,409,862 $2,324,534 $2,362,309
Net Loans 1,130,654 1,047,527 1,091,432
Deposits 2,051,510 2,004,338 2,040,381
Stockholders' equity (period end) 254,631 234,093 244,027
PER SHARE DATA:
Earnings Per Share $1.70 $1.41 $2.90
Dividends Declared 0.50 0.46 0.96
Dividends Paid 0.50 0.46 0.96
Shares Outstanding 9,432 9,431 9,405
SELECTED RATIOS:
Return on Average Assets 1.34% 1.20% 1.21%
Return on Average Equity 12.83% 12.26% 12.28%
Equity to Assets 10.57% 10.07% 10.33%
Dividend Payout 29.48% 32.54% 33.06%

</TABLE>

7
<PAGE> 19
COMPARATIVE PER SHARE DATA (UNAUDITED)

<TABLE>
<CAPTION>
HISTORICAL PRO FORMA CBI
--------------- with CBI and PRO FORMA
HHC CBI SOUTHEAST EQUIVALENT
----- ------ ------------ ----------
<S> <C> <C> <C> <C>
PER COMMON SHARE:
NET INCOME
For the six months
ended June 30,
1996 $1.78 $6.66 $1.70 $8.62
1995 1.51 3.61 1.41 7.15
For the years ended
December 31, 1995 $3.05 $9.96 $2.90 $14.71

CASH DIVIDENDS PAID
For the six months
ended June 30,
1996 $0.50 $2.40 $0.50 $2.54
1995 0.46 2.25 0.46 2.33
For the years ended
December 31, 1995 $0.96 $3.75 $0.96 $4.87
December 31, 1994 0.92 3.75 0.92 4.67
December 31, 1993 0.90 2.80 0.90 4.56
December 31, 1992 0.68 2.80 0.68 3.45
December 31, 1991 0.60 2.80 0.60 3.04

BOOK VALUE
June 30,
1996 $26.40 $123.56 $27.00 $136.95
1995 24.21 114.59 24.82 125.89
December 31, 1995 25.24 118.70 25.95 131.62

</TABLE>

8
<PAGE> 20
RECENT STOCK PRICES

There is no established public trading market for the CBI or Bank
Common Stock. Neither the CBI nor Bank Common Stock is traded on any exchange
and neither is quoted on an automated system of a registered securities
association. Since January 1, 1994 CBI paid cash dividends on CBI Common Stock
in the aggregate amount of $10.20 per share and Bank paid cash dividends on
Bank Common Stock in the aggregate amount of $12.63 per share. See "CERTAIN
INFORMATION CONCERNING CBI AND BANK -- Stock Prices and Dividends."

HHC Common Stock is traded in the over-the-counter market and quoted
on the NASDAQ National Market System under the symbol "HBHC." The following
table sets forth the per share high and low sale prices of HHC Common Stock as
reported on the NASDAQ National Market System for the periods indicated. These
prices do not reflect retail mark-ups, mark-downs or commissions. The
following table also gives the amount of cash dividends paid on HHC Common
Stock for the time periods indicated.

<TABLE>
<CAPTION>
HIGH BID LOW BID CASH
OR LAST OR LAST DIVIDENDS
SALE PRICE SALE PRICE PAID
---------- ---------- ----
<S> <C> <C>
1994

1st Quarter $33.00 $28.50 $0.23
2nd Quarter $29.75 $26.25 $0.23
3rd Quarter $30.00 $28.00 $0.23
4th Quarter $30.00 $28.50 $0.23

1995

1st Quarter $30.25 $28.75 $0.23
2nd Quarter $31.75 $29.25 $0.23
3rd Quarter $36.75 $30.75 $0.25
4th Quarter $38.00 $35.50 $0.25

1996

1st Quarter $37.50 $35.75 $0.25
2nd Quarter $40.50 $36.25 $0.25
3rd Quarter $38.00 $36.25 $0.25
</TABLE>

The parties entered into the Merger Agreement as of Wednesday, June
19, 1996. On Tuesday, June 18, 1996, the reported closing sales price of HHC
Common Stock was $37.375. On October 7, 1996, the reported closing sales price
was $______. On June 30, 1996, HHC's 9,021,901 outstanding shares of common
stock were owned by 4,534 shareholders of record.

As a bank holding company, HHC depends on dividend payments from its
subsidiary banks, Hancock Bank and Hancock Bank MS, in order to meet its
obligations and to pay dividends. The payment of dividends from the banks to
HHC is regulated and restricted by the bank's primary regulators. Information
about restrictions on the ability of HHC to pay dividends is contained in Item
1 of HHC's 1995 Annual Report on Form 10-K under the caption "Federal
Regulation", which information is incorporated herein by reference.

9
<PAGE> 21
EFFECT OF THE MERGERS ON RIGHTS OF SHAREHOLDERS

Certain differences exist in the rights of holders of HHC Common Stock
and holders of CBI and Bank Common Stock. These differences relate primarily
to the number, term and removal of directors; changes in control of HHC;
indemnification of directors, officers and employees of HHC; and amending the
Articles of Incorporation and Bylaws of HHC, CBI and Bank. See "CERTAIN
INFORMATION CONCERNING HHC," "DESCRIPTION OF HHC CAPITAL STOCK" and
"COMPARATIVE RIGHTS OF SHAREHOLDERS."

RESALES OF HHC COMMON STOCK BY AFFILIATES

The HHC Common Stock to be issued in connection with the Company
Merger has been registered under the Securities Act and will be freely
transferable, except that certain resale restrictions apply to the sale or
transfer of HHC Common Stock issued pursuant to the Merger Agreement to
directors, officers, and other affiliates of CBI and Bank. See "INFORMATION
CONCERNING THE MERGERS -- Status Under Federal Securities Laws; Certain
Restrictions on Resales of Securities."

ACCOUNTING TREATMENT

HHC and CBI intend to account for the Mergers as a purchase
transaction under generally accepted accounting principles. Accordingly, the
earnings of CBI will be combined with the earnings of HHC from and after the
Effective Date of the Mergers and any goodwill or other intangibles recorded in
the transaction will be amortized through charges to income in future periods.
See "INFORMATION CONCERNING THE MERGERS -- Accounting Treatment."

GENERAL INFORMATION

INTRODUCTION

This Prospectus/Joint Proxy Statement is being furnished on or about
October 10, 1996 to the shareholders of CBI and Bank in connection with
the solicitation of proxies on behalf of the Board of Directors of CBI and Bank
for use at a Special Joint Meeting of the Shareholders of CBI and Bank, to be
held at the offices of Bank, 120 S. Oak Street, Hammond, Louisiana, on November
13, 1996, at 1:00 p.m., local time, and at any adjournment thereof. A Notice
of Special Joint Meeting for CBI and Bank is attached hereto and a proxy card
relating to the Special Joint Meeting accompanies this Prospectus/Joint Proxy
Statement.

PURPOSE OF THE SPECIAL JOINT MEETING

10
<PAGE> 22
shall be entitled to receive $303.9616 for each share of Bank Common Stock, all
in accordance with the Merger Agreement. See "GENERAL INFORMATION -- Purpose
of the Special Joint Meeting."

SOLICITATION, VOTING AND REVOCATION OF PROXIES

When a proxy in the form accompanying this Prospectus/Joint Proxy
Statement is properly executed and returned, the shares voted thereby will be
voted in accordance with the instructions marked thereon. ALL EXECUTED BUT
UNMARKED PROXIES THAT ARE RETURNED WILL BE VOTED "FOR" THE PROPOSALS TO APPROVE
THE MERGER AGREEMENT AND THE RESPECTIVE MERGER.

No matters are expected to be considered at the Special Joint Meeting
other than the proposal to approve the Merger Agreement, but if any other
matters should properly come before the Special Joint Meeting, it is intended
that proxies in the form accompanying this Prospectus/Joint Proxy Statement
will be voted on all such matters in accordance with the judgment of the
person(s) voting such proxies.

Any proxy may be revoked at any time before it is voted. A
shareholder may revoke a proxy: (i) by submitting a subsequently dated proxy;
(ii) by giving written notice of such revocation to the Secretary of CBI or
Bank, as applicable, provided that such notice is received by such Secretary at
the principal offices of Bank prior to the date of the Special Joint Meeting,
or (iii) upon request, if such shareholder is present at the Special Joint
Meeting and advises the inspector(s) of election that he is revoking a proxy.
Mere attendance at the Special Joint Meeting will not of itself revoke a
previously submitted proxy. Revocation of a proxy will not affect a vote on
any matter taken prior to receipt of such revocation.

The cost of soliciting these proxies, including any and all
professional fees paid to attorneys and accountants in connection with the
preparation and filing with the SEC of this Prospectus/Joint Proxy Statement
and other proxy materials, and the cost of printing and mailing these proxy
materials, will be borne by CBI. In addition to the use of the mails, proxies
may be solicited personally, by telephone, telecopier, or telegram by
directors, officers and employees of CBI or Bank. Such officers, directors and
employees will continue to receive any compensation from CBI or Bank to which
they are entitled by virtue of their employment or status as an officer or
director, but will not receive any additional fee, compensation, or other
remuneration for soliciting proxies in connection with the Special Joint
Meeting.

SHARES ENTITLED TO VOTE; QUORUM; VOTE REQUIRED

The Boards of Directors of CBI and Bank have fixed the close of
business on October 1, 1996, as the record date for the determination of CBI
and Bank shareholders entitled to notice of and to vote at the Special Joint
Meeting. As of the Record Date, there were 87,494 shares of CBI Common Stock
outstanding and 72,050 shares of Bank Common Stock outstanding. Each share of
CBI and Bank Common Stock is entitled to one vote on all matters to come before
the Special Joint Meeting.

With respect to all matters to come before the Special Joint Meeting,
the presence at the Special Joint Meeting, in person or by proxy, of the
holders of a majority of the outstanding shares of CBI and Bank Common Stock is
necessary to constitute a quorum.

VOTE REQUIRED

11
<PAGE> 23

43.37 percent of the outstanding CBI Common Stock entitled to vote at the
Special Joint Meeting. As a condition to consummation of the Mergers, each
director and certain shareholders of CBI have executed agreements ("Joinder
Agreements") with HHC, which, among other things, obligates each such director
or shareholder to vote his shares of CBI Common Stock in favor of the approval
and adoption of the Merger Agreement. As of the Record Date, the 11 persons
who have executed Joinder Agreements beneficially owned an aggregate of 44.76
percent of the outstanding CBI Common Stock. Under Mississippi law,
shareholders of HHC are not required to approve the Merger Agreement. See
"GENERAL INFORMATION -- Shares Entitled to Vote; Quorum; Vote Required."

INFORMATION CONCERNING THE MERGERS

GENERAL

The transactions contemplated by the Merger Agreement are to be
effected in accordance with the terms and conditions of the Merger Agreement, a
copy of which is attached hereto as Appendix A. The following description does
not purport to be complete and is qualified in its entirety by reference to the
Merger Agreement.

The ultimate result of the transactions contemplated by the Merger
Agreement will be that the business and properties of CBI will become the
business and properties of HHC, the shareholders of CBI will become
shareholders of HHC (except for those who own 25 or fewer shares of CBI Common
Stock, and dissenting shareholders who will receive cash in exchange for their
shares of CBI Common Stock), the business and properties of Bank will become
the business and properties of Hancock Bank with all the banking facilities of
Bank becoming branches of Hancock Bank, and the shareholders of Bank, other
than CBI, will become shareholders of HHC (except for those who own 25 or fewer
shares of Bank Common Stock, and dissenting shareholders who will receive cash
in exchange for their shares of Bank Common Stock).

BACKGROUND OF AND REASONS FOR THE MERGERS

Background. During the last several years there have been significant
developments in the banking industry. These developments have included the
increased emphasis and dependence on automation, specialization of products and
services, increased competition from other financial institutions, and a trend
toward consolidation and geographic expansion. CBI and Bank and their
respective Boards of Directors concluded that they could best serve their
shareholders, employees, customers and communities by combining with a regional
banking organization, provided that CBI and Bank could obtain a fair price for
its shareholders. Accordingly, in the spring of 1996, representatives of CBI
and HHC entered into extensive negotiations which ultimately led to the
execution of a Letter of Intent on June 11, 1996. After further negotiations,
the parties entered into the Merger Agreement dated as of June 19, 1996.

Reasons for the Merger. In deciding to enter into the Merger
Agreement, the Boards of Directors of CBI and Bank, after considering various
alternatives, concluded that the Merger Agreement was in the best interest of
CBI and Bank and their shareholders because it would permit shareholders to
exchange on favorable terms their

12
<PAGE> 24
ownership interests in CBI and Bank for participation in the ownership of a
regional banking organization operating on a multi-state basis.

The Board of Directors also concluded that the shareholders of CBI and
Bank would benefit additionally from the Mergers in that they would attain
greater liquidity in their investment by obtaining shares of stock of a
corporation whose securities are more widely held and significantly more
actively traded.

CBI's and Bank's Board of Directors consulted with their financial and
other advisors, as well as with CBI's management and considered a number of
factors, including, but not limited to, the following: (i) the parties'
respective earnings and dividend records, financial conditions, historical
stock prices and managements; (ii) the market for Bank's services and the
competitive pressures existing in Bank's market area; (iii) the outlook for CBI
and Bank in the financial institutions industry; (iv) the amount and type of
consideration to be received by CBI's and Bank's shareholders pursuant to the
Merger Agreement; (v) the fact that HHC Common Stock to be received pursuant to
the Merger Agreement will be listed for trading on the NASDAQ National Market
and should provide CBI's and Bank's shareholders with liquidity that is
currently unavailable to them; (vi) recent changes in the regulatory
environment will result in CBI and Bank facing additional competitive pressures
in its market area from other financial institutions with greater financial
resources capable of offering a broad array of financial services; and (vii)
the Mergers are expected to qualify as tax-free reorganizations so that neither
CBI, Bank nor their shareholders (except to the extent that cash is received in
respect of their shares) will recognize any gain in the transaction. See
"MATERIAL FEDERAL INCOME TAX CONSEQUENCES OF THE MERGERS."

Neither CBI's nor Bank's Board of Directors assigned any specific or
relative weight to the foregoing factors in its considerations. CBI's and
Bank's Board of Directors believes that the Merger Agreement will provide
significant value to all CBI and Bank shareholders and will enable them to
participate in opportunities for growth that CBI's and Bank's Board of
Directors believes the Mergers make possible.

BASED ON THE FOREGOING, THE BOARD OF DIRECTORS OF CBI AND BANK HAVE
APPROVED THE MERGER AGREEMENT AND MERGERS, BELIEVE THAT THE MERGERS ARE IN THE
BEST INTEREST OF CBI'S AND BANK'S SHAREHOLDERS, AND RECOMMEND THAT ALL
SHAREHOLDERS OF CBI AND BANK VOTE "FOR" THE APPROVAL OF THE MERGER AGREEMENT.

CONVERSION OF CBI AND BANK COMMON STOCK

The Merger Agreement between HHC, Hancock Bank, CBI and Bank provides
as follows:

i. On the Effective Date, each share of Common Stock,
$3.33 par value, of HHC issued and outstanding
immediately prior to the Effective Date will remain
outstanding and will continue to represent one share
of Common Stock, $3.33 par value, of HHC.

ii. On the Effective Date, each share of Common Stock,
$5.00 par value of CBI issued and outstanding
immediately prior to the Effective Date will, by
virtue of the Company Merger and without any action
on the part of the holder thereof, be converted into
the right to receive 5.0721 shares of HHC Common
Stock and $61.7107 in cash; provided, however, each
holder of 25 or fewer shares of CBI Common Stock
shall not receive HHC Common Stock but rather shall
be entitled to receive $246.8428 for each share of
CBI Common Stock.

iii. On the Effective Date, each share of Common Stock,
$5.00 par value of Bank issued and outstanding
immediately prior to the Effective Date, other than
those held by CBI, will, by virtue of the Bank Merger
and without any action on the part of the holder
thereof, be converted into the right to receive
6.2458 shares of HHC Common Stock and

13
<PAGE> 25
$75.9904 in cash; provided, however, each holder of
25 or fewer shares of Bank Common Stock shall not
receive HHC Common Stock but rather shall be entitled
to receive $303.9616 for each share of Bank Common
Stock.

iv. As a result of the Mergers and without any action on
the part of the holder thereof, all shares of CBI and
Bank Common Stock will cease to be outstanding and
will be canceled and retired and will cease to exist,
and each holder, other than CBI, of a Certificate
representing any shares of CBI or Bank Common Stock
will thereafter cease to have any rights with respect
to such shares of CBI or Bank Common Stock, except
the right to receive, without interest, the HHC
Common Stock and/or cash in accordance with Sections
3.1(b), 3.1(c) and 3.1(d) of the Merger Agreement and
cash for fractional shares of HHC Common Stock in
accordance with Section 3.2(e) of the Merger
Agreement upon the surrender of such Certificate.

No fractional shares of HHC Common Stock will be issued pursuant to
the Merger Agreement. In lieu of the issuance of any fractional share of HHC
Common Stock, cash adjustments will be paid to holders in respect of any
fractional share of HHC Common Stock that would otherwise be issuable, and the
amount of such cash adjustment will be equal to such fractional part of a share
of HHC's Common Stock multiplied by $36.50.

EFFECTIVE DATE

The closing (the "Closing") of the transactions contemplated by the
Merger Agreement will take place at Hancock Bank's office at 3854 American Way
in Baton Rouge, Louisiana on a date that is mutually agreed to by HHC and CBI
("Closing Date") that is within thirty (30) days following the later of the
date of receipt of all applicable regulatory approvals relating to the
transactions contemplated herein, the expiration of all applicable statutory
and regulatory waiting periods relative thereto, or the date the Registration
Statement filed with the SEC is declared effective, or such later date as may
be agreed to by CBI and HHC.

Immediately upon consummation of the Closing, or on such other later
date as the parties may agree, the Company Merger Agreement will be certified,
executed, acknowledged and delivered to the Secretary of State of the State of
Louisiana for filing pursuant to and in accordance with the provisions of
Section 12:112 of the LBCL. The Company Merger will become effective as of the
date and time of issuance by the Secretary of State of the State of Louisiana
of a certificate of merger relating to the Company Merger.

Immediately upon consummation of the Closing, or on such other later
date as the parties may agree, the Bank Merger Agreement will be certified,
executed, acknowledged and delivered to the OFI for filing pursuant to and in
accordance with the provisions of Section 6:352 of the Louisiana Banking Laws.
The Bank Merger shall become effective as of the date and time specified or
permitted by the OFI in a Certificate of Merger or other written record issued
by the OFI.

EXCHANGE OF CERTIFICATES

As of the Effective Date, HHC will deposit or cause to be deposited
with the Exchange Agent for the benefit of the holders of shares of CBI and
Bank Common Stock, pursuant to the Merger Agreement, certificates representing
the shares of HHC Common Stock and cash (such certificates for shares of HHC
Common Stock and cash being hereinafter referred to as the "Exchange Fund") to
be issued and paid, respectively, pursuant to the Merger Agreement in exchange
for outstanding shares of CBI and Bank Common Stock.

Promptly after the Effective Date, HHC will cause the Exchange Agent
to mail to each holder of record, other than CBI, of a Certificate(s) of CBI or
Bank Common Stock (other than those representing shares with respect

14
<PAGE> 26
to which the holder thereof has perfected appraisal rights under the LBCL and
has not subsequently lost, withdrawn or forfeited such rights):

(i) A letter of transmittal which will specify that delivery shall
be effected, and the risk of loss and title to the
Certificates shall pass, only upon delivery of the
Certificates to the Exchange Agent and will be in such form
and have such other provisions as HHC may reasonably specify;
and

(ii) Instructions for use in effecting the surrender of the
Certificates in exchange for Certificates representing shares
of HHC Common Stock and/or cash, and cash in lieu of
fractional shares.

Upon surrender of a Certificate for cancellation to the Exchange Agent
together with such letter of transmittal, duly executed and completed in
accordance with the instructions thereto, the holder of such Certificate will
be entitled to receive in exchange therefor (i) a certificate representing that
number of whole shares of HHC Common Stock; and (ii) a check representing the
amount of cash and cash in lieu of fractional shares, if any, which such holder
has the right to receive in respect of the Certificates surrendered, after
giving effect to any required withholding tax, and the Certificate so
surrendered shall then be canceled. No interest will be paid or accrued on the
value of any HHC Common Stock or cash payable to holders of Certificates. In
the event of a transfer of ownership of CBI or Bank Common Stock which is not
registered in the transfer records of CBI or Bank, a certificate representing
the proper number of shares of HHC Common Stock together with a check for the
cash component of the Exchange Ratio and cash to be paid in lieu of fractional
shares, if any, may be issued to such a transferee if the Certificate
representing such CBI or Bank Common Stock is presented to the Exchange Agent,
accompanied by all documents required to evidence and effect such transfer and
to evidence that any applicable stock transfer taxes have been paid.

No dividends on HHC Common Stock will be paid with respect to any
shares of CBI or Bank Common Stock represented by a certificate until such
certificate is surrendered for exchange as described above. Subject to the
effect of applicable laws, following surrender of any such Certificate, there
will be paid to the holder of the certificates representing whole shares of HHC
Common Stock issued in exchange therefor, without interest, (i) at the time of
such surrender, the amount of dividends or other distributions with a record
date after the Effective Date theretofore payable with respect to such whole
shares of HHC Common Stock and not paid, less the amount of any withholding
taxes which may be required thereon, and (ii) at the appropriate payment date,
the amount of dividends or other distributions with a record date after the
Effective Date but prior to surrender and a payment date subsequent to
surrender payable with respect to such whole shares of HHC Common Stock, less
the amount of any withholding taxes which may be required thereon.

On or after the Effective Date, there will be no transfers on the
stock transfer books of CBI or Bank of the shares of CBI or Bank Common Stock
which were outstanding immediately prior to the Effective Date. If, after the
Effective Date, Certificates are presented to HHC, they will be canceled and
exchanged for certificates for shares of HHC Common Stock and/or cash, as
appropriate, and cash in lieu of fractional shares, if any, deliverable in
respect thereof pursuant to the Merger Agreement. Certificates surrendered for
exchange by any person constituting an "affiliate" of CBI or Bank for purposes
of Rule 145(c) under the Securities Act will not be exchanged until HHC has
received a written agreement from such person as provided in the Merger
Agreement.

No fractional shares of HHC Common Stock will be issued pursuant to
the Merger Agreement. In lieu of the issuance of any fractional share of HHC
Common Stock, cash payments will be paid to holders in respect of any
fractional share of HHC Common Stock that would otherwise be issuable, and the
amount of such cash adjustment will be equal to such fractional proportion of
$36.50.

In the event that any Certificate has been lost, stolen or destroyed,
upon the making of an affidavit of that fact by the person claiming such
Certificate to be lost, stolen or destroyed and, if required by HHC, the
posting

15
<PAGE> 27
by such person of a bond in such reasonable amount as HHC may direct as
indemnity against any claim that may be made against it with respect to such
Certificate, the Exchange Agent will issue in exchange for such lost, stolen or
destroyed Certificate the shares of HHC Common Stock and cash in lieu of
fractional shares, if any, and unpaid dividends and distributions on shares of
HHC Common Stock as provided in the Merger Agreement, deliverable in respect
thereof pursuant to the Merger Agreement.

In the event that, subsequent to the date of the Merger Agreement but
prior to the Effective Date, CBI, Bank, or HHC changes the number of shares of
CBI or Bank Common Stock or HHC Common Stock, respectively, issued and
outstanding as a result of a stock split, reverse stock split, stock dividend,
recapitalization or other similar transaction, the Exchange Ratio will be
appropriately adjusted.

REGULATORY APPROVALS AND OTHER CONDITIONS TO THE MERGERS

The Company Merger is subject to approval by the Federal Reserve Board
("FRB"). On or about August 13, 1996, HHC filed with the FRB a request seeking
approval to waive the FRB merger application. HHC received a letter dated
August 23, 1996, from the FRB requesting certain information in connection with
the waiver request. On or about August 27, 1996, HHC filed with the FRB a
response providing such additional information, and the FRB approved the
application waiver request on September 13, 1996.

The Bank Merger is subject to approval by the FDIC and the OFI. On or
about August 13, 1996, Hancock Bank filed with the FDIC and the OFI an
application seeking approval to merge Bank into Hancock Bank. As of the date of
this Prospectus/Joint Proxy Statement, neither the FDIC nor the OFI had
approved the application for the Bank Merger. The Bank Merger cannot be
consummated for thirty days after approval thereof by the FDIC, and during such
period, the Justice Department may challenge the merger of Bank into Hancock
Bank on antitrust grounds.

There can be no assurance that any applicable regulatory authority
will approve or take other required action with respect to the Mergers or as to
the date of such regulatory approval or other action. HHC and CBI are not
aware of any governmental approvals or actions that are required in order to
consummate the Mergers except as described herein. Should such other approval
or action be required, it is contemplated that HHC and CBI would seek such
approval or action. There can be no assurance as to whether or when any such
other approval or action, if required, could be obtained.

In addition to the receipt of all necessary regulatory approvals, the
expiration of all required notice and waiting periods following the granting of
such approvals, and the approval of the Merger Agreement by the requisite vote
of the shareholders of CBI and Bank, consummation of the Mergers is subject to
the satisfaction of certain other conditions on or before the Effective Date of
the Mergers. Generally, such additional conditions include, among others, the
following: (i) the Prospectus/Joint Proxy Statement must have been filed with
the SEC and must have been cleared thereby or otherwise authorized for mailing,
and the Registration Statement must have been filed with and declared effective
by the SEC and shall not be the subject of any stop order or proceedings
seeking a stop order; and (ii) no action or proceeding shall have been
threatened or instituted before a court or other governmental body to restrain
or prohibit the transactions contemplated by the Merger Agreement and no
governmental agency shall have given notice that consummation of the Mergers
would constitute a violation of any law.

The obligations of CBI to effect the Mergers are subject to conditions
as set forth in Article 8 of the Merger Agreement, to the effect, among others,
as follows: (i) Each of the representations and warranties of HHC in the
Merger Agreement is true and correct in all material respects on and as of the
Closing; (ii) HHC has in all material respects performed all obligations
required by the Merger Agreement to be performed prior to the Closing; (iii)

16
<PAGE> 28
there has not been a material adverse change in the financial condition,
results of operations or business of HHC; (iv) CBI has received from Watkins
Ludlam & Stennis, P.A., special counsel to HHC, an opinion dated as of the
Closing Date to the effect, among others, that HHC is duly incorporated,
validly existing and in good standing under the laws of the State of
Mississippi, and has corporate authority to own and operate its businesses and
properties and to carry on its business as presently conducted by it; Hancock
Bank is duly organized and validly existing and in good standing under the laws
of the State of Louisiana, and has corporate authority to own and operate its
businesses and properties and to carry on its business as presently conducted
by it; HHC and Hancock Bank had and have corporate authority to make, execute
and deliver the Merger Agreement and it has been duly authorized and approved
by all necessary corporate action of HHC and Hancock Bank and is as of the
Closing its valid and binding obligation subject, however, to bankruptcy,
insolvency and similar laws affecting the enforcement of creditors' rights
generally and to the availability of equitable remedies in general; all
required regulatory approvals have been obtained; to such counsel's knowledge
after inquiry, there is no litigation or proceeding pending or threatened
against HHC relating to the participation in or consummation of the Merger
Agreement by HHC and consummation will not violate any other contract,
agreement, charter or by-law provision of HHC; and all shares of HHC Common
Stock to be issued in the Mergers have been duly authorized and when issued
will be validly and legally issued, fully paid and non-assessable and will be
free and clear of all liens, charges, security interests, mortgages, pledges
and other encumbrances and any preemptive or similar rights; and (v) CBI has
received from Watkins Ludlam & Stennis, P.A., an opinion of counsel as to
certain tax aspects of the transactions contemplated by the Merger Agreement.

The obligations of HHC to effect the Mergers are subject to certain
conditions as set forth in Article 8 of the Merger Agreement to the effect,
among others, as follows: (i) Each of the representations and warranties of
CBI and Bank contained in the Merger Agreement is true and correct in all
material respects on and as of the Closing; (ii) CBI and Bank have in all
material respects performed all obligations required by the Merger Agreement to
be performed prior to the Closing; (iii) there has not been a material adverse
change in the financial condition, results of operations or business of CBI and
Bank; and (iv) HHC has received from CBI's legal counsel an opinion dated as of
the Closing Date to the effect, among others, that CBI is duly incorporated,
validly existing and in good standing under the laws of the State of Louisiana,
and has corporate authority to own and operate its businesses and properties
and to carry on its business as presently conducted by it; Bank is duly
organized, validly existing and in good standing under the laws of the State of
Louisiana, and has corporate authority to own and operate its businesses and
properties and to carry on its business as presently conducted by it; CBI and
Bank had and have corporate authority to make, execute and deliver the Merger
Agreement and it has been duly authorized and approved by all necessary
corporate action of CBI and Bank and has been duly executed and delivered and
as of the Closing Date is its valid and binding obligation subject, however, to
bankruptcy, insolvency and similar laws affecting the enforcement of creditors'
rights generally and to the availability of equitable remedies in general; to
such counsel's knowledge after inquiry, there is no litigation or proceeding
pending or threatening against CBI or Bank relating to the participation in or
consummation of the Merger Agreement by CBI or Bank and consummation will not
violate any other contract, agreement, charter or by-law of CBI or Bank, and
CBI and Bank have complied with all laws and regulations relating to
dissenter's rights and all stock in CBI and Bank will be acquired by HHC
pursuant to the terms of the Merger Agreement and that the title and/or
ownership interest in the shares of CBI and Bank Common Stock are as
represented in CBI's and Bank's Certificate at Closing and that no known
dispute exists as to the title and/or ownership of any such shares.

CONDUCT OF BUSINESS PRIOR TO THE EFFECTIVE DATE

Pursuant to the Merger Agreement, between the date thereof and the
Effective Date, CBI will, and will cause the Bank to use its best efforts to
preserve its existing business and to keep its business organization intact,
including its present relationships with its employees and customers and others
having business relations with it. Furthermore, CBI has agreed to operate its
business solely in the ordinary course

17
<PAGE> 29
and to comply with all applicable laws, regulations and rules and has agreed to
cause the Bank to operate its business solely in the ordinary course and comply
with all applicable laws, rules and regulations. Without the prior written
consent of HHC, CBI has agreed not, and CBI will cause the Bank not to: (i)
Amend or otherwise change their respective Articles of Incorporation or Bylaws,
as each such document is in effect on the date of the Merger Agreement; (ii)
Issue or sell, or authorize for issuance or sale, any additional shares of any
class of capital stock of CBI or Bank; (iii) Issue, grant or enter into any
subscription, option, warrant, right, convertible security, or other agreement
or commitment of any character obligating CBI or Bank to issue securities; (iv)
declare, set aside, make, or pay any dividend or other distribution with
respect to its capital stock, provided, however, CBI and/or Bank may to the
extent lawfully permitted declare and pay dividends for the purpose of allowing
CBI and Bank shareholders to receive the normal and customary third quarter,
1996 dividend in the amount of $.90 and $1.11 per outstanding share of CBI
Common Stock and Bank Common Stock, respectively; (v) redeem, purchase, or
otherwise acquire, directly or indirectly, any of its capital stock
respectively; (vi) authorize any capital expenditures which, individually or in
aggregate, exceed $20,000; (vii) extend any new, or renew any existing loan,
credit, lease, or other type of financing which individually exceeds $50,000;
(viii) except in the ordinary course of business, sell, pledge, dispose of, or
encumber, or agree to sell, pledge, dispose of, or encumber any assets of CBI
or Bank; (ix) excluding normal and customary banking transactions, incur any
indebtedness for borrowed money, issue any debt securities, or enter into or
modify any contract, agreement, commitment, or arrangement with respect
thereto; (x) impose, or suffer the imposition, on any share of stock held by
CBI in the Bank, of any material lien, charge, or encumbrance, or permit any
such lien to exist or establish or add any automated teller machines or branch
or other banking offices or take any action that will materially and adversely
affect the ability of any party to the Merger Agreement to obtain the approvals
necessary for consummation of the transactions contemplated thereby or that
would materially and adversely affect CBI's ability to perform its covenants
and agreements thereunder; (xi) acquire (by merger, consolidation, lease or
other acquisition of stock, ownership interests or assets) any corporation,
partnership, or other business organization or division thereof, or enter into
any contract, agreement, commitment, or arrangement with respect to any of the
foregoing; (xii) enter into, amend, or terminate any employment agreement,
relationship or responsibilities with any director, officer or key employee or
representative of CBI or Bank, or enter into, amend, or terminate any
employment agreement with any other person otherwise than in the ordinary
course of business, or take any action with respect to the grant or payment of
any severance or termination pay except as expressly consented to in writing by
HHC; (xiii) enter into, extend, or renew any lease for office or other space;
(xiv) except as required by law, enter into, adopt or amend any bonus, profit
sharing, compensation, stock option, pension, retirement, deferred
compensation, employment, or other employee benefit plan, agreement, trust,
fund, or arrangement for the benefit or welfare of any officer, employee or
representative of CBI or Bank; (xv) grant any increase in compensation to any
director, officer, employee or representative of CBI or Bank except in the
ordinary course of business consistent with past practice; (xvi) take any
action or omit to take any action which would cause any of CBI's or Bank's
representations or warranties to be untrue or misleading in any material
respect or any covenant of CBI or Bank under the Merger Agreement incapable of
being performed; or (xvii) agree in writing or otherwise to do any of the
foregoing.

WAIVER, AMENDMENT AND TERMINATION

CBI and HHC may waive their respective rights, powers or privileges
under the Merger Agreement provided, however, that any such waiver is in
writing. The Merger Agreement may be amended or modified only upon written
agreement subscribed by both CBI and HHC.

The Merger Agreement may be terminated either before or after approval
of the Merger Agreement by CBI's and Bank's shareholders upon the occurrence of
certain events including, among others, the following: (i) at any time on or
prior to the Effective Date, by the mutual consent in writing of a majority of
the members of the Board of Directors of CBI, Bank, HHC and Hancock Bank; (ii)
by either HHC or CBI, in writing, if the Mergers have not become effective on
or before December 31, 1996, unless such expiration date has been mutually
extended or unless the absence of such effectiveness is due to the failure of
the party seeking to terminate the Merger Agreement to perform each of its
obligations required by the Merger Agreement to be performed on or prior to the

18
<PAGE> 30
Effective Date; (iii) by either party to the Merger Agreement in the event of a
breach by the other party (a) of any covenant or agreement contained therein or
(b) of any representation or warranty therein, if the facts constituting such
breach reflect a material adverse change in the financial condition, results of
operations or business taken as a whole, of the breaching party, which in
either case cannot be or is not cured within sixty (60) days after written
notice of such breach is given to the party committing such breach, or in the
event of a breach of a warranty or covenant, such breach results in a material
increase in the cost of the non- breaching party's performance of the Merger
Agreement; (iv) by HHC, Hancock Bank, CBI or Bank at any time after the FRB,
FDIC or OFI has denied any application for any approval or clearance required
to be obtained as a condition to the consummation of the Mergers and the time
period for all appeals or requests for reconsideration has run; (v) by CBI,
Bank, HHC or Hancock Bank if the Company Merger is not approved by the required
vote of CBI's shareholders or the Bank Merger is not approved by the required
vote of shareholders of Bank; and (vi) by HHC if holders of ten percent or more
of the outstanding CBI Common Stock exercise statutory rights of dissent and
appraisal pursuant to Section 131 of the Louisiana Business Corporation Law
("LBCL").

Except under certain circumstances specified in the Merger Agreement,
upon termination of the Merger Agreement, no liability will result on the part
of either party or their respective directors, officers, employees, agents, or
shareholders unless there has been an intentional breach of the Merger
Agreement prior to the date of termination.

INTERESTS OF CERTAIN PERSONS IN THE MERGERS

The President and executive officers of the Bank will become officers
of Hancock Bank of Louisiana following the Bank Merger. In addition, life
insurance policies on Guy C. Billups, Jr., Director of the Bank and Vice
Chairman of CBI and W. R. Allison, Director of the Bank and CBI and Senior Vice
President of the Bank which are currently being paid by the Bank will be
assumed by Hancock Bank of Louisiana and continued to be paid.

EMPLOYEE BENEFITS

EXPENSES

HHC and CBI have each agreed to pay their respective costs, fees and
expenses incurred in connection with or incidental to the Merger Agreement,
including without limitation any fees and disbursements to their respective

19
<PAGE> 31
accountants and counsel. HHC is responsible for preparing the applications,
regulatory filings and Registration Statement necessary to obtain approval of
the Mergers and the issuance of the HHC Common Stock. CBI is responsible for
the cost of its accountants and legal counsel and will bear all costs related
to conducting its shareholders' meeting and obtaining shareholder approval of
the Merger Agreement and the Mergers.

STATUS UNDER FEDERAL SECURITIES LAWS; CERTAIN RESTRICTIONS ON RESALES OF
SECURITIES

The shares of HHC Common Stock to be issued pursuant to the Merger
Agreement have been registered under the Securities Act of 1933, as amended,
("Securities Act") thereby allowing such shares to be sold without restriction
by shareholders of CBI or Bank who are not deemed to be "affiliates" (as that
term is defined in the rules under the Securities Act) of CBI and Bank and who
do not become affiliates of HHC. The shares of HHC Common Stock to be issued
to affiliates of CBI or Bank may be resold only pursuant to an effective
registration statement, pursuant to Rule 145 under the Securities Act (which,
among other things, permits the resale of securities subject to certain volume
limitations) or in transactions otherwise exempt from registration under the
Securities Act. HHC will not be obligated and does not intend to register its
shares under the Securities Act for resale by shareholders who are affiliates.

Prior to the Effective Date of the Mergers, each such person deemed an
affiliate of CBI or Bank will deliver to HHC a letter agreement pertaining to
the limitations on the transferability of such affiliate's shares of HHC Common
Stock acquired in the Company Merger or Bank Merger, respectively, and whereby
such affiliate shall represent and warrant, among other things, that he or she
will not sell, pledge, transfer, or otherwise dispose of such shares of HHC
Common Stock in violation of the Securities Act or the rule and regulations
thereunder.

ACCOUNTING TREATMENT

MATERIAL FEDERAL INCOME TAX CONSEQUENCES OF THE MERGERS

Set forth below is a discussion of material federal income tax
consequences of the Mergers. The discussion is intended only as a summary and
does not purport to be a complete analysis of all potential tax effects
relevant to a decision whether to vote for the approval of the Merger Agreement
and related Mergers. The discussion is based on current provisions of the
Code, regulations thereunder, and applicable judicial and administrative
interpretations on the date hereof, any of which is subject to change at any
time.

HHC and CBI expect the Mergers to be a tax-free reorganizations for
federal income tax purposes so that no gain or loss will be recognized by CBI's
or Bank's shareholders, except to the extent of cash consideration received by
shareholders in exchange for CBI Common Stock, Bank Common Stock, fractional
shares, or payments received by shareholders upon exercise of their statutory
dissenters' rights.

Consummation of the Mergers is conditioned upon receipt by CBI of an
opinion from Watkins Ludlam & Stennis, P.A., to the following effects, among
others:

(i) The Mergers will constitute a reorganization under Section 368
of the Code.

20
<PAGE> 32
(ii) No material gain or loss will be recognized by HHC, Hancock
Bank, CBI, or Bank as a result of the Mergers.

(iii) No gain or loss will be recognized by a shareholder of CBI or
Bank who receives solely HHC Common Stock in exchange for his
CBI or Bank Common Stock. However, because both HHC Common
Stock and other consideration will be transferred in exchange
for shares of CBI and Bank Common Stock, then, in general,
such a shareholder will be required to recognize gain. The
amount of gain recognized will not exceed the amount of cash
received in the exchange.

(iv) Cash received in the Mergers by a shareholder of CBI or Bank
in lieu of a fractional share interest in HHC Common Stock
will be treated under Section 302 of the Code as having been
received by shareholder in exchange for such fractional share,
and the shareholder generally will recognize gain or loss in
such exchange equal to the difference between the cash
received and the shareholder's basis allocable to the
fractional share. If a fractional share of HHC Common Stock
would constitute a capital asset in the hands of the
shareholder, any resulting gain or loss will be characterized
as capital gain or loss in accordance with the provisions and
limitations of Subchapter P of Chapter 1 of the Code.

(v) A shareholder of CBI or Bank who perfects his statutory
dissenters' rights and who receives solely cash in exchange
for his CBI or Bank Common Stock will be treated as having
received such cash payment as a distribution in redemption of
his shares of CBI or Bank Common Stock, subject to the
provisions and limitations of Sections 302 and 306 of the
Code. After such distribution, if the former shareholder does
not actually or constructively own any CBI or Bank Common
Stock and if such stock is not treated as "Section 306 stock,"
the redemption will constitute a complete termination of
interest and be treated as a distribution in full payment in
exchange for the CBI or Bank Common Stock so redeemed.

(vi) A shareholder of CBI or Bank who owns 25 or fewer shares of
CBI or Bank Common Stock and who receives solely cash in
exchange for his CBI or Bank Common Stock will be treated as
having received such cash payment as a distribution in
redemption of his shares of CBI or Bank Common Stock, subject
to the provisions and limitations of Section 302 of the Code.
After such distribution, if the former shareholder does not
actually or constructively own any CBI or Bank Common Stock,
the redemption will constitute a complete termination of
interest and be treated as a distribution in full payment in
exchange for the CBI or Bank Common Stock so redeemed.

In connection with the foregoing opinion, counsel will make such
factual assumptions as are customary in similar tax opinions, and such factual
assumptions may be confirmed by certificates signed by appropriate officers of
HHC, Hancock Bank, CBI and Bank. The foregoing opinion cannot be relied upon
if any such factual assumptions is, or later becomes, inaccurate. No ruling
from the Internal Revenue Service concerning the tax consequences of the
Mergers has been requested, and the opinion will not be binding upon the
Internal Revenue Service or the courts. If the Mergers are consummated, and it
is later determined that the Mergers did not qualify as a tax-free
reorganization under the Code, shareholders of CBI and Bank will, in general,
recognize taxable gain or loss in the Mergers equal to the difference between
the fair market value of the consideration received in the Mergers and their
basis in their CBI Common Stock or Bank Common Stock, as the case may be.

THE FOREGOING ANALYSIS OF FEDERAL INCOME TAX CONSEQUENCES IS INCLUDED
HEREIN FOR GENERAL INFORMATION ONLY AND IS NOT INTENDED AS A SUBSTITUTE FOR
CAREFUL TAX PLANNING. SHAREHOLDERS OF CBI AND BANK ARE URGED TO CONSULT THEIR
TAX ADVISORS AS TO THE SPECIFIC TAX CONSEQUENCES TO THEM OF THE MERGERS AND OF

21
<PAGE> 33
OWNERSHIP OF HHC COMMON STOCK, INCLUDING THE APPLICATION AND EFFECT OF STATE
AND LOCAL INCOME AND OTHER TAX LAWS.

DISSENTERS' RIGHTS

CBI SHAREHOLDERS

IF A SHAREHOLDER OF CBI COMMON STOCK WHO OBJECTS TO THE COMPANY MERGER
AND DESIRES TO PERFECT DISSENTERS' RIGHTS IS NOT TIMELY IN TAKING ANY OF THE
FOLLOWING STEPS, THE SHAREHOLDER WILL LOSE THE RIGHT TO DISSENT FROM THE
COMPANY MERGER AND THE SHARES OWNED BY SUCH SHAREHOLDER WILL BE CONVERTED AS OF
THE EFFECTIVE TIME OF THE COMPANY MERGER INTO THE RIGHT TO RECEIVE HHC COMMON
STOCK AND/OR CASH IN ACCORDANCE WITH THE TERMS OF THE COMPANY MERGER AGREEMENT.

Unless the Company Merger is approved by the holders of at least 80
percent of the total voting power of CBI, Section 131 of the LBCL allows a
shareholder of CBI Common Stock who objects to the Company Merger and who
complies with the provisions of that section to dissent from the Company Merger
and to be paid the fair cash value of his shares of CBI Common Stock, as of the
day before the Special Joint Meeting, as determined by agreement between the
shareholder and HHC, or by the state district court for the Parish of
Tangipahoa if the shareholder and HHC are unable to agree upon the fair cash
value of such shares.

To exercise the right of dissent, a shareholder must (i) file with CBI
a written objection to the Company Merger prior to or at the Special Joint
Meeting, and (ii) vote his shares against the Company Merger at the Special
Joint Meeting. Neither a vote against the Company Merger nor a specification
in a proxy to vote against the Company Merger will constitute the necessary
written objection to the Company Merger. Moreover, by voting in favor of the
Company Merger, by abstaining from voting on the Company Merger, or by
returning the enclosed proxy without instructing the proxy holders to vote
against the Company Merger, a shareholder waives his rights under Section 131
of the LBCL.

If the Company Merger is approved by less than 80 percent of the total
voting power of CBI, then promptly after the Effective Date of the Company
Merger, written notice of consummation of the Company Merger will be given by
registered mail to each shareholder who filed a written objection and voted
against the Company Merger. Within twenty days of the mailing of such notice,
the shareholder must file with HHC a written demand for payment of the fair
cash value of his shares as of the day before the Special Joint Meeting and
must state the amount demanded and a post office address to which HHC may
reply. The shareholder also must deposit the certificate(s) formerly
representing his shares of CBI Common Stock in escrow with a bank or trust
company located in Tangipahoa Parish, Louisiana. With the above-mentioned
demand, the shareholder must also deliver to HHC the written acknowledgment of
such bank or trust company that it holds the certificate(s), duly endorsed and
transferred to HHC, on the sole condition that the certificate(s) will be
delivered to HHC upon payment of the value of the shares in accordance with
Section 131.

Unless the shareholder objects to and votes against the Company
Merger, demands payment, deposits his certificate(s) and delivers the required
acknowledgment in accordance with the above mentioned procedures and within the
time periods set forth above, the shareholder will conclusively be presumed to
have acquiesced to the Company Merger and will forfeit any right to seek
payment pursuant to Section 131.

If HHC does not agree with the fair value demanded by the shareholder,
or does not agree that payment is due, it will notify the shareholder within
twenty days after receipt of the shareholder's demand and

22
<PAGE> 34
acknowledgment, and state in such notice the value it is willing to pay for the
shares or its belief that no payment is due. If the shareholder does not agree
to accept the amount offered by HHC, he must, within 60 days after receipt of
such notice, file suit against HHC in the state district court for the Parish
of Tangipahoa for a judicial determination of the fair cash value of the
shares. Any shareholder entitled to file such suit, within such 60-day period
but not thereafter, may intervene as a plaintiff in any suit filed against HHC
by any other former CBI shareholder for a judicial determination of the fair
cash value of such other shareholder's shares. If a shareholder fails to bring
or to intervene in such a suit within the applicable 60-day period, he will be
deemed to have consented to accept HHC's statement that no payment is due or,
if HHC does not contend that no payment is due, to accept the amount specified
by HHC in its notice of disagreement.

If, upon filing of any such suit or intervention, HHC deposits with
the court the amount, if any, that it specified in its notice of disagreement,
and if in that notice HHC offered to pay such amount to the shareholder on
demand, then the costs (not including legal fees) of the suit or intervention
will be taxed against the shareholder if the amount finally awarded to him,
exclusive of interest or costs, is equal to or less than the amount so
deposited; otherwise, the costs (not including legal fees) will be taxed
against HHC.

Upon filing a demand for the value of his shares, a shareholder ceases
to have any rights as a shareholder except the rights created by Section 131.
The shareholder's demand may be withdrawn voluntarily at any time before HHC
gives its notice of disagreement. Withdrawal of a demand thereafter requires
the written consent of HHC. If withdrawn, or if the shareholder otherwise
loses his dissenters' rights under Section 131, he will be restored to his
rights as a shareholder as of the time of filing his demand for fair cash
value.

THE FOREGOING SUMMARY OF DISSENTERS' RIGHTS UNDER THE LBCL IS
NECESSARILY INCOMPLETE AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SECTION
131 OF THE LBCL, WHICH IS SET FORTH IN ITS ENTIRETY IN THIS PROSPECTUS/JOINT
PROXY STATEMENT AS APPENDIX B.

BANK SHAREHOLDERS

IF A SHAREHOLDER OF BANK COMMON STOCK WHO OBJECTS TO THE BANK MERGER
AND DESIRES TO PERFECT DISSENTERS' RIGHTS IS NOT TIMELY IN TAKING ANY OF THE
FOLLOWING STEPS, THE SHAREHOLDER WILL LOSE THE RIGHT TO DISSENT FROM THE BANK
MERGER AND THE SHARES OWNED BY SUCH SHAREHOLDER WILL BE CONVERTED AS OF THE
EFFECTIVE TIME OF THE BANK MERGER INTO THE RIGHT TO RECEIVE HHC COMMON STOCK
AND/OR CASH IN ACCORDANCE WITH THE TERMS OF THE BANK MERGER AGREEMENT.

The Louisiana Banking Laws (the "LBL") govern the rights of dissenting
stockholders of a Louisiana state chartered bank. Holders of Bank Common Stock
who vote against the Bank Merger and who comply with the procedural
requirements of Section 6:376 of the LBL will be entitled to receive payment of
the fair cash value of their shares as of the day before the date of the
Special Meeting, as determined by agreement between the shareholders and HHC or
by a court of competent jurisdiction if the shareholders and HHC are unable to
agree upon the fair cash value, if the Bank Merger is approved by less than
eighty percent (80%) of Bank's total voting power. If the Bank Merger is
approved by eighty percent (80%) or more of Bank's total voting power, Section
6:376 of the LBL does not afford any dissenter's rights. A copy of this
provision is reproduced as Appendix C. Set forth below is a summary of the
rights of dissenting Bank shareholders under Louisiana law, which is qualified
in its entirety by reference to Appendix C.

To exercise the right of dissent, a shareholder must (1) file with
Bank a written objection to the Bank Merger prior to or at the Special Joint
Meeting and (2) vote his shares (in person or proxy) against the Bank Merger at
the Special Joint Meeting. Neither a vote against the Bank Merger nor a
specification and a proxy to vote against

23
<PAGE> 35
the Bank Merger will in and of itself constitute the necessary written
objection to the Bank Merger. Moreover, by voting in favor of, or abstaining
from voting on the Bank Merger, or by returning the enclosed proxy without
instructing the proxy holder to vote against the Bank Merger, a shareholder
waives his rights under Section 376 of the LBL.

If the Bank Merger is approved by less than eighty percent (80%) of
Bank's total voting power, then promptly after the Effective Date of the Bank
Merger, HHC will give written notice of the consummation of the Bank Merger by
registered mail to each shareholder of Bank who filed a written objection to
the Bank Merger and voted against it. Such notice will state only that such
Bank Merger has been consummated and will not repeat the requirements stated
herein for perfecting dissenters' rights. Within twenty (20) days after the
date of mailing of such notice, the shareholder must file with HHC a written
demand for payment for his shares at their cash value as of the day before the
date of the Special Joint Meeting at which he voted against the Bank Merger and
must state the amount demanded and a post office address to which HHC may
reply. The shareholder must also deposit the certificate(s) representing his
shares of stock of Bank in escrow with a chartered bank or trust company
located in the Parish of the registered office of Bank. The registered office
of Bank is located in Tangipahoa Parish, Louisiana. With the above mentioned
demand, the shareholder must also deliver to HHC the written acknowledgment of
such bank or trust company that it holds a certificate(s), duly endorsed and
transferred to HHC, upon the sole condition that the certificate(s) will be
delivered to HHC upon payment of the value of the shares in accordance with
Section 376 of the LBL. Unless the shareholder objects to or votes against the
Bank Merger, demands payment, deposits his certificates and delivers the
required acknowledgment in accordance with the aforementioned procedures and
within the time period set forth above, the shareholder shall conclusively be
presumed to have acquiesced in the Bank Merger and shall lose any right to seek
payment pursuant to Section 376 of the LBL.

If HHC does not agree to the amount demanded by the shareholder, or
does not agree that payment is due, it will, within twenty (20) days after
receipt of such demand and acknowledgment, notify such shareholder in writing
of either (1) the amount it will agree to pay or (2) that it does not believe
that any payment is due. If the shareholder does not agree to accept the
offered amount, or disagrees with HHC's assertion that no payment is due, the
shareholder must, within sixty (60) days after the receipt of such notice, file
suit against HHC in the District Court for the Parish of Tangipahoa for a
judicial determination of the fair cash value of the shares. Any shareholder
entitled to file such suit may, within such sixty (60) day period, but not
thereafter, intervene as a plaintiff in any such suit filed against HHC by
another shareholder of Bank for a judicial determination of the fair cash value
of such other shareholders' shares. If a shareholder fails to bring or to
intervene in such a suit within the applicable sixty (60) day period, the
shareholder will be deemed to have consented to accept HHC's statement that no
payment is due or, if HHC does not contend that no payment is due, to accept
the amount specified by HHC in its notice of disagreement.

When the fair value of the shares has been agreed upon between the
shareholder and HHC or when HHC has become liable for the value demanded by the
shareholder because of its failure to give notice of disagreement and of the
value it will pay or when the shareholder has become bound to accept the value
HHC agrees is due because of his failure to bring suit within sixty days after
receipt of HHC's notice of disagreement, the action of the shareholder to
recover such value must be brought within five years from the date the value
was agreed upon or the liability of HHC became fixed.

If HHC, in its notice of disagreement, offered to pay the dissatisfied
shareholder on demand an amount in cash deemed by it to be the fair cash value
of his shares, and if, on the institution of a suit by the dissatisfied
shareholder, HHC deposits with the court the amount, if any, which it specified
in its notice of disagreement then the cost of the suit or intervention will be
charged to the shareholder if the amount finally awarded to the shareholder,
exclusive of interests and costs, is equal to or less than the amount so
deposited; otherwise, the cost and judicial interest on the amount of the award
in excess of the amount so deposited, will be charged to HHC.

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<PAGE> 36
Upon filing a demand for the value of his shares, a shareholder ceases
to have any rights of a shareholder except the rights created by Section 376 of
the LBL. The shareholders demand may be withdrawn voluntarily at any time
before HHC gives it's notice of disagreement, but thereafter only with the
written consent of HHC. If withdrawn, or if the shareholder otherwise loses
his dissenters' rights, such shareholder will be restored to his rights as a
shareholder of HHC as of the time of filing of his demand for value.

Prior to the Special Joint Meeting, dissenting shareholders of CBI or
Bank should send any communication regarding their rights to Sandra Hendon,
Cashier, Community State Bank, 120 S. Oak Street, Hammond, Louisiana 70403.
Between the date of the Special Joint Meeting and the Effective Date of the
Mergers any communications regarding dissenters rights should also be addressed
by the shareholders to Sandra Hendon, Cashier, Community State Bank, 120 S. Oak
Street, Hammond, Louisiana 70403. On or after the Effective Date of the
Mergers, dissenting shareholders should send any communication regarding their
rights to Charles A. Webb, Jr., Secretary, Hancock Holding Company, Post Office
Box 4019, Gulfport, Mississippi 39502. All communications of dissenting
shareholders should be signed by or on behalf of the dissenting shareholder in
the form in which the shareholders' shares are registered on the books of CBI
or Bank.

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<PAGE> 37
The following unaudited pro forma combined financial statements are
presented, assuming the mergers of HHC and CBI as well as the subsequent merger
of the combined entity with Southeast will be accounted for using the purchase
method of accounting and subject to the purchase adjustments noted below, to
reflect the combination of the historical consolidated financial statements of
the respective companies for the following periods. The unaudited pro forma
combined balance sheet assumes the mergers were consumated on June 30, 1996.
The unaudited pro forma combined statements of income assumes the mergers were
consumated as of the beginning of the periods presented. The unaudited pro
forma combined financial statements give effect of the issuance of
approximately 447,000 shares of HHC Common Stock and the payment of
approximately $5.6 million in cash in connection with the merger of CBI and of
the issuance of approximately 104,500 shares of HHC Common Stock and the
payment of approximately $3.7 million in cash in connection with the merger of
Southeast.

The unaudited pro forma information does not purport to represent what
HHC's, CBI's and Southeast's combined results of operations actually would have
been if the respective mergers had occurred as of the dates indicated or will
be for any future period. The unaudited pro forma combined financial statements
should be read in conjunction with the historical financial statements and
notes thereto of CBI and HHC contained elsewhere or incorporated by reference
herein.

UNAUDITED PRO FORMA COMBINED BALANCE SHEET
JUNE 30, 1996
(Amounts in thousands)

<TABLE>
<CAPTION>
CBI
PRO FORMA
ADJUSTMENTS
-------------------
HHC CBI DEBITS CREDITS SOUTHEAST
---------- ------- -------- ------- ---------

<S> <C> <C> <C> <C> <C>
ASSETS:
Cash and due from banks $145,223 $6,121 5,626 (A) $2,148
Interest bearing time deposits with other banks 2,945 0 492
Securities available-for-sale 108,169 0 5,262
Securities held-to-maturity 807,932 43,078 400 (B) 3,381
Federal funds sold and securities purchased
under agreements to resell 72,175 3,450 200
Loans, net of unearned income 1,070,561 36,342 23,751
Less: Reserve for loan losses (17,698) (475) (381)
---------- ------- -------
Loans, net 1,052,863 35,867 23,370
Property and equipment 38,599 1,423 110 (B) 1,457
Other real estate 749 213 288
Other assets 47,702 984 11,139 (A) 483
---------- ------- -------
TOTAL ASSETS $2,276,357 $91,136 $37,081
========== ======= =======
LIABILITIES:
Deposits:
Non-interest bearing demand $483,335 $15,132 $5,514
Interest bearing savings, NOW, money market
and other time 1,455,780 64,288 27,461
---------- ------- -------
Total Deposits 1,939,115 79,420 32,975
Federal funds purchased and securities sold
under agreements to repurchase 82,732 0 0
Other liabilities 18,028 744 100 (C) 294
Long-term bonds and notes 2,035 0 0
---------- ------- -------
TOTAL LIABILITES 2,041,910 80,164 33,269
---------- ------- -------
MINORITY INTEREST 0 161 161 (A) 0

STOCKHOLDERS' EQUITY
Common Stock 30,043 437 437 (A) 1,487 (A) 2,282
Capital surplus 130,000 2,664 2,664 (A) 14,808 (A) 1,439
Undivided profits 75,107 7,710 7,710 (A) 153
Unrealized loss on securities available-for-sale (703) 0 (62)
---------- ------- -------
TOTAL STOCKHOLDERS' EQUITY 234,447 10,811 3,812
---------- ------- -------
TOTAL LIABILITIES AND EQUITY $2,276,357 $91,136 $22,321 $22,321 $37,081
========== ======= ======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
SOUTHEAST
PRO FORMA
ADJUSTMENTS
---------------------- PRO FORMA
DEBITS CREDITS HHC
------ ------- ---------

<S> <C> <C> <C>
ASSETS:
Cash and due from banks 3,735 (D) $144,131
Interest bearing time deposits with other banks 3,437
Securities available-for-sale 113,431
Securities held-to-maturity 77 (E) 853,914
Federal funds sold and securities purchased
under agreements to resell 75,825
Loans, net of unearned income 1,130,654
Less: Reserve for loan losses (18,554)
----------
Loans, net 1,112,100
Property and equipment 43 (E) 41,632
Other real estate 1,250
Other assets 3,834 (D) 64,142

TOTAL ASSETS $2,409,862
==========
LIABILITIES:
Deposits:
Non-interest bearing demand $503,981
Interest bearing savings, NOW, money market
and other time 1,547,529
----------
Total Deposits 2,051,510
Federal funds purchased and securities sold
under agreements to repurchase 82,732
Other liabilities 12 (F) 18,954
Long-term bonds and notes 2,035
----------
TOTAL LIABILITES 2,155,231
----------
MINORITY INTEREST 0

STOCKHOLDERS' EQUITY
Common Stock 2,282 (D) 348 (D) 31,878
Capital surplus 1,439 (D) 3,541 (D) 148,349
Undivided profits 153 (D) 75,107
Unrealized loss on securities available-for-sale 62 (D) (703)
------ ----------
TOTAL STOCKHOLDERS' EQUITY 254,631
----------
TOTAL LIABILITIES AND EQUITY $7,763 $7,763 $2,409,862
====== ====== ==========
</TABLE>
NOTES
(A) To record the issuance of approximately 447,000 shares of HHC stock and
approximately $5.6 million in cash in connection with the acquisition of CBI
under the purchase method of accounting resulting in goodwill of approximately
$11.1 million and the elimination of the capital and minority interest accounts
of CBI.

(B) To record estimated market value adjustment to the securities portfolio
and land of CBI.

(D) To record the issuance of approximately 104,500 shares of HHC stock and
approximately $3.7 million in cash in connection with the acquisition of
Southeast under the purchase method of accounting resulting in goodwill of
approximately $3.8 million and the elimination of the capital and minority
interest accounts of Southeast.

(E) To record estimated market value adjustment to the securities portfolio
and land of Southeast.

(F) To record deferred taxes associated with market adjustments to Southeast's
securities portfolio.

26
<PAGE> 38
HANCOCK HOLDING COMPANY
UNAUDITED PRO FORMA COMBINED STATEMENT OF EARNINGS
SIX MONTHS ENDED JUNE 30, 1996

(Amounts in thousands except per share data)
<TABLE>
<CAPTION>
PROFORMA
ADJUSTMENTS
------------------------
HHC COMMUNITY DEBITS CREDITS
------- --------- ----------- -------
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on Loans $51,858 $1,629
Interest on securities:
U.S. Treasury securities 7,160 0
U.S. government securities and obligations
of U.S. government agencies 17,108 1,202
Obligations of state and political subdivisions 1,734 103
Interest on federal funds sold and securities
purchased under agreements to resell 3,534 124 140 (G)
Interest on time deposits and other interest 3,358 0
------- -----
TOTAL INTEREST INCOME 84,752 3,058
------- -----
INTEREST EXPENSE
Interest on deposits 30,276 1,442
Interest on federal funds purchased and
securities sold under agreements to repurchase 1,829 0
Interest on bonds, notes and other 151 0
------- -----
TOTAL INTEREST EXPENSE 32,256 1,442
------- -----
NET INTEREST INCOME 52,496 1,616
Provision for possible loan losses 1,801 20
------- -----
NET INTEREST INCOME AFTER PROVISION FOR
POSSIBLE LOAN LOSSES 50,695 1,596
------- -----
NONINTEREST EXPENSE
Service charges on deposits 8,356 415
Trustfees 1,153 0
Other charges, fees and operating income 2,797 115
Securities gains (losses) (34) 65
------- -----
TOTAL NONINTEREST INCOME 12,272 595
------- -----
NONINTEREST EXPENSE
Salaries and employee benefits 20,770 690
Occupancy and equipment expense, net 7,604 283
Other operating expenses 11,036 352 375 (H)
------- -----
TOTAL NONINTEREST EXPENSE 39,410 1.325
------- -----
EARNINGS BEFORE INCOME TAXES 23,557 866
Income tax expense 7,757 275 0 50 (I)
------- ----- --- --
NET EARNINGS $15,800 $ 591 515 50
======= ===== === ==
EARNINGS PER SHARE $1.78
AVERAGE SHARES 8,880

</TABLE>
<TABLE>
<CAPTION>
PROFORMA
ADJUSTMENTS
------------------------ PRO FORMA
Southeast DEBITS CREDITS HHC
--------- ------ ------- --------
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on Loans $1,111 $54,598
Interest on securities:
U.S. Treasury securities 0 $7,160
U.S. government securities and obligations
of U.S. government agencies 243 18,553
Obligations of state and political subdivisions 0 1,837
Interest on federal funds sold and securities
purchased under agreements to resell 21 93 (J) 3,446
Interest on time deposits and other interest 3 3,361
----- -------
TOTAL INTEREST INCOME 1,378 88,955
----- -------
INTEREST EXPENSE
Interest on deposits 588 32,306
Interest on federal funds purchased and
securities sold under agreements to repurchase 5 1,834
Interest on bonds, notes and other 0 151
----- -------
TOTAL INTEREST EXPENSE 593 34,291
----- -------
NET INTEREST INCOME 785 54,664
Provision for possible loan losses 0 1,821
----- -------
NET INTEREST INCOME AFTER PROVISION FOR
POSSIBLE LOAN LOSSES 785 52,843
----- -------
NONINTEREST EXPENSE
Service charges on deposits 204 8,975
Trustfees 0 1,153
Other charges, fees and operating income 112 3,024
Securities gains (losses) 12 43
----- -------
TOTAL NONINTEREST INCOME 328 13,195
----- -------
NONINTEREST EXPENSE
Salaries and employee benefits 313 21,773
Occupancy and equipment expense, net 116 8,003
Other operating expenses 340 128 (K) 12,231
----- -------
TOTAL NONINTEREST EXPENSE 769 42,007
----- -------
EARNINGS BEFORE INCOME TAXES 344 24,031
Income tax expense 86 0 33 (L) 8,035
----- --- -- -------
NET EARNINGS $258 221 33 $15,996
===== === == =======
EARNINGS PER SHARE $1.70
AVERAGE SHARES 9,432

</TABLE>

NOTES
(G) To record imputed interest of 5.00% on the $5.6 million cash portion of the
purchase price which assumes a reduction in federal fund sold balances.

(H) To record amortization of goodwill over 15 years using a straight line
basis.

(I) To record the tax effect of the pro forma adjustments.

(J) To record imputed interest of 5.00% on the $3.7 million cash portion of the
purchase price which assumes a reduction in federal fund sold balances.

(K) To record amortization of goodwill over 15 years using a straight line
basis.

(L) To record the tax effect of the pro forma adjustments.

27
<PAGE> 39
HANCOCK HOLDING COMPANY
UNAUDITED PRO FORMA COMBINED STATEMENT OF EARNINGS
YEAR ENDED DECEMBER 31, 1995

(Amounts in thousands except per share data)
<TABLE>
<CAPTION>
PRO FORMA
ADJUSTMENTS
------------------
HHC COMMUNITY DEBITS CREDITS Southeast
------- ---- ------ ------ ---------
<S> <C> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on Loans $97,626 $3,012 $2,104
Interest on securities:
U.S. government securities and obligations
of U.S. government agencies 48,294 2,296 419
Obligations of state and political subdivisions 3,527 171 0
Interest on federal funds sold and securities
purchased under agreements to resell 5,820 268 280 (G) 145
Interest on time deposits and other interest 6,262 0 0
------- ---- ------ ---- ----
TOTAL INTEREST INCOME 161,529 5,747 2,668
------- ---- ------ ---- ----
INTEREST EXPENSE
Interest on deposits 57,612 2,602 1,035
Interest on federal funds purchased and
securities sold under agreements to repurchase 3,082 7 0
Interest on bonds, notes and other 468 0 0
------- ---- ------ ---- ----
TOTAL INTEREST EXPENSE 61,162 2,609 1,035
------- ---- ------ ---- ----
NET INTEREST INCOME 100,367 3,138 1,633
Provision for possible loan losses 4,425 0 (134)
------- ---- ------ ---- ----
NET INTEREST INCOME AFTER PROVISION FOR
POSSIBLE LOAN LOSSES 95,942 3,138 1,767
------- ---- ------ ---- ----
NONINTEREST EXPENSE
Service charges on deposits 15,040 851 381
Trust fees 2,525 0 0
Other charges, fees and operating income 6,440 90 57
Securities gains (losses) (49) 9 2
------- ---- ------ ---- ----
TOTAL NONINTEREST INCOME 23,956 950 440
------- ---- ------ ---- ----
NONINTEREST EXPENSE
Salaries and employee benefits 41,319 1,459 684
Occupancy and equipment expense, net 13,720 576 167
Other operating expenses 24,777 835 750 (H) 684
------- ---- ------ ---- ----
TOTAL NONINTEREST EXPENSE 79,816 2,870 1,535
------- ---- ------ ---- ----
EARNINGS BEFORE INCOME TAXES 40,082 1,218 672
Income tax expense 13,065 333 0 100 (I) (40)
------- ---- ------ ---- ----
NET EARNINGS $27,017 $885 $1,030 $100 $712
======= ==== ====== ==== ====
EARNINGS PER SHARE $3.05
AVERAGE SHARES 8,853
</TABLE>

PRO FORMA
ADJUSTMENTS
----------------- PRO FORMA
DEBITS CREDITS HHC
------ ------- ---------
<S> <C> <C> <C>
INTEREST INCOME
Interest and fees on Loans $102,742
Interest on securities:
U.S. government securities and obligations
of U.S. government agencies 51,009
Obligations of state and political subdivisions 3,698
Interest on federal funds sold and securities
purchased under agreements to resell 185 (J) 5,768
Interest on time deposits and other interest 6,262
-------
TOTAL INTEREST INCOME 169,479
-------
INTEREST EXPENSE
Interest on deposits 61,249
Interest on federal funds purchased and
securities sold under agreements to repurchase 3,089
Interest on bonds, notes and other 468
-------
TOTAL INTEREST EXPENSE 64,806
-------
NET INTEREST INCOME 104,673
Provision for possible loan losses 4,291
-------
NET INTEREST INCOME AFTER PROVISION FOR
POSSIBLE LOAN LOSSES 100,382
-------
NONINTEREST EXPENSE
Service charges on deposits 16,272
Trust fees 2,525
Other charges, fees and operating income 6,587
Securities gains (losses) (38)
-------
TOTAL NONINTEREST INCOME 25,346
-------
NONINTEREST EXPENSE
Salaries and employee benefits 43,462
Occupancy and equipment expense, net 14,463
Other operating expenses 255 (K) 27,301
-------
TOTAL NONINTEREST EXPENSE 85,226
---- --- -------
EARNINGS BEFORE INCOME TAXES 40,502
Income tax expense 0 65 (L) 13,193
---- --- -------
NET EARNINGS $440 $65 $27,309
==== === =======
EARNINGS PER SHARE $2.90
AVERAGE SHARES 9,405
</TABLE>

NOTES
(G) To record imputed interest of 5.00% on the $5.6 million cash portion of
the purchase price which assumes a reduction in federal fund sold balances.

(H) To record amortization of goodwill over 15 years using a straight line
basis.

(I) To record the tax effect of the pro forma adjustments.
(J) To record imputed interest of 5.00% on the $3.7 million cash portion of
the purchase price which assumes a reduction in federal fund sold balances.

(K) To record amortization of goodwill over 15 years using a straight line
basis.

(L) To record the tax effect of the pro forma adjustments.

28
<PAGE> 40
CERTAIN INFORMATION CONCERNING CBI AND BANK

PRINCIPAL BUSINESS

Community Bancshares, Inc. CBI was organized on October 9, 1981, as a
business corporation under the laws of the State of Louisiana to acquire Bank
and to engage in activities related to the operation of a bank holding company.
In 1981 CBI acquired approximately 98.5% of the capital stock of Bank and
became a one-bank holding company subject to regulation under the BHCA. At
June 30, 1996, CBI had total consolidated assets of approximately $91.1 million
and shareholders equity of approximately $10.8 million. CBI is domiciled in
Independence, Louisiana and its principal executive offices are located at 120
S. Oak Street, Hammond, Louisiana 70403 and its telephone number is (504)
345-8161.

Community State Bank. Bank, organized on May 31, 1944, provides
traditional consumer and commercial deposit and loan services to individuals,
families and businesses in Tangipahoa Parish, Louisiana. Bank also provides
traditional consumer and commercial deposit and loan services to individuals,
families and businesses in the neighboring parish of Livingston. The Bank's
services are delivered through a network of four (4) full service locations,
including a main office in Independence and three branches, two (2) of which
are located in Hammond, and one (1) branch located in Loranger, Louisiana. In
addition to traditional bank services, Bank offers mortgage loans,
VISA/Mastercard, and limited trust services. Bank's deposits are insured by
the FDIC. At June 30, 1996, Bank had total assets of approximately $91.1
million and total deposit liabilities of approximately $79.4 million. Bank is
domiciled in Independence, Louisiana and its principal executive office is
located at 120 S. Oak Street, Hammond, Louisiana 70403 and its telephone number
is (504) 345-8161.

COMPETITION

Bank's primary market area, Tangipahoa Parish, has a current
population of approximately 91,972.

Competition among banks for loan customers is generally governed by
such factors as loan terms, including interest charges, restrictions on
borrowers and compensating balances, and other services offered by such banks.
Bank competes with numerous other commercial banks, savings and loan
associations and credit unions for customer deposits, as well as with a broad
range of financial institutions in consumer and commercial lending activities.
In addition to thrift institutions, other businesses in the financial services
industry compete with Bank for retail and commercial deposit funds and for
retail and commercial loan business. Competition for loans and deposits is
intense among the financial institutions in Bank's primary market area,
including those located in the surrounding parishes.

Currently, all state banks organized under the law of the State of
Louisiana are permitted to establish branches on a statewide basis.
Louisiana's banking laws also permit bank holding companies domiciled in any
other state to acquire Louisiana banks and bank holding companies. Unless
state legislatures elect otherwise, under recent federal banking legislation,
banks will be allowed to establish interstate branches beginning June 1, 1997.

At present, several bank holding companies with greater resources than
those of CBI have acquired banks or established branches in CBI's market area
and are continuing to do so. The size of these institutions allows certain
economies of scale that permit their operation on a narrower profit margin than
would be appropriate for Bank. Bank has also experienced some competitive
pressure on the interest rates that it is able to charge on its new loans.

SEASONALITY OF BUSINESS AND CUSTOMERS

Bank deposits represent a cross-section of the area's economy and
there is no material concentration of deposits from any single customer or
group of customers. No significant portion of Bank's loans is concentrated

29
<PAGE> 41
within a single industry or group of related industries. Historically, the
business of Bank has not been seasonal in nature and management of Bank does
not anticipate any seasonal trends in the future. Bank does not rely on
foreign sources of funds or income.

EMPLOYEES

As of the date of this Prospectus/Joint Proxy Statement, CBI and Bank
have, in the aggregate, approximately 49 full-time employees and 8 part-time
employees. None of such employees are represented by labor unions. Management
of CBI considers its relationship with its employees to be good.

PROPERTY

CBI and Bank have four offices located in Tangipahoa Parish,
Louisiana, including the executive offices of CBI and Bank, located at 120 S.
Oak Street, Hammond, Louisiana 70403. All of the offices and the premises on
which they are located are owned by Bank and are not subject to any mortgages
or encumbrances.

LEGAL PROCEEDINGS

CBI and Bank normally are parties to and have pending routine
litigation arising from their regular business activities of furnishing
financial services, including providing credit and collecting secured and
unsecured indebtedness. In some instances, such litigation involves claims or
counterclaims against CBI and Bank, or either of them. As of June 30, 1996,
CBI and Bank did not have any litigation pending other than ordinary routine
litigation incidental to their business that was not material in amount in
respect of CBI's assets on a consolidated basis.

STOCK PRICES AND DIVIDENDS

Market Prices. There is no established public trading market for the
CBI or Bank Common Stock. These securities are not traded on any exchange and
are not quoted on an automated system of a registered securities association.

At the Record Date, there were 164 shareholders of record of CBI
Common Stock and 87,494 shares of CBI Common Stock issued and outstanding. In
addition, there were 29 shareholders of record of Bank Common Stock and 72,050
shares of Bank Common Stock issued and outstanding.

CBI Cash Dividends. In 1994, CBI paid a cash dividend of $3.75 per
share on its Common Stock representing a total cash dividend payment of
$328,102. In 1995, CBI paid a cash dividend of $3.75 per share on its Common
Stock for a total cash dividend payment of $328,102, and year- to-date 1996,
CBI has paid a cash dividend of $2.40 per share for a total cash dividend
payment of $209,985.

Bank Cash Dividends. In 1994, Bank paid a cash dividend of $4.65 per
share on its Common Stock representing a total cash dividend payment of
$335,032. In 1995, Bank paid a cash dividend of $4.65 per share on its Common
Stock for a total cash dividend payment of $335,032, and year-to-date 1996,
Bank has paid a cash dividend of $3.33 per share for a total cash dividend
payment of $239,926.

Federal bank regulatory authorities have the power under the Financial
Institutions Supervisory Act to prohibit a bank from engaging in an unsafe or
unsound practice. The payment of a dividend by a bank could, depending on the
financial condition of the bank and other factors, be deemed an unsafe or
unsound practice. The ability of CBI to pay dividends to its shareholders in
the future is dependent upon the ability of Bank to pay dividends to it.

30
<PAGE> 42
Under the Merger Agreement, CBI and Bank are prohibited from declaring
or paying any dividends on CBI Common Stock and Bank Common Stock,
respectively, unless the Merger Agreement is terminated; provided however, CBI
and/or Bank may, to the extent lawfully permitted, declare and pay dividends
for the purpose of allowing CBI's and Bank's shareholders to receive the normal
and customary third quarter 1996 dividend in the amount of $.90 and $1.11 per
outstanding share of CBI Common Stock and Bank Common Stock, respectively.

SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT

The following table sets forth, as of the Record Date, certain
information with respect to the beneficial ownership (as defined in Rule 13d-3
under the Securities Exchange Act of 1934), direct or indirect, of CBI Common
Stock and Bank Common Stock for (i) each person who is the beneficial owner of
more than five percent of any class of the outstanding voting securities of CBI
or Bank; (ii) each director of CBI and Bank, and each executive officer of CBI
and Bank, and (iii) all directors and executive officers of CBI and Bank as a
group. Unless otherwise indicated, all shares indicated as beneficially owned
are held with sole voting and investment power. There are no shares of Bank
Common Stock owned by any director or executive officer of CBI or Bank.

<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
OF CBI COMMON STOCK
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Terrell A. Adams 200 *
211 North Holly
Hammond, LA 70401

W. R. Allison 1,220 1.39%
P. O. Box 1420
Gulfport, MS 39501

Guy C. Billups, Jr. 28,012 32.02%
P. O. Box 1420
Gulfport, MS 39501

Guy C. Billups, III 2,981 3.41%
P. O. Box 1420
Gulfport, MS 39501

Annie D. Biundo 2,981 3.41%
3101 Lake Palourde Drive
Morgan City, LA 70380

Joseph J. Biundo, Jr. 1,022 1.17%
4927 Folse Drive
Metairie, LA 70001

</TABLE>

31
<PAGE> 43

44316 W. Pleasant Ridge Road
Hammond, LA 70403

Rene J. C. Tricou, Jr. 605 *
2405 South Morrison Blvd.
Hammond, LA 70403

G. F. Tycer, Jr. 200 *
--------- ---------
P. O. Box 159
Natalbany, LA 70451

ALL DIRECTORS AND EXECUTIVE 37,961 43.37 %
========== =========
OFFICERS AS A GROUP (11 PERSONS)
</TABLE>

______________________________

* Indicates less than one percent.

32
<PAGE> 44
COMMUNITY BANCSHARES, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion provides certain information concerning the financial
condition and results of operations of Community Bancshares, Inc.,
("Community") for the periods ending June 30, 1995 and 1996. The financial
position and results of operations of Community were due primarily to its
banking subsidiary Community State Bank. Management's discussion should be
read in conjunction with the financial statements.

OVERVIEW

Net income through June 30, 1996 totaled $583,000 compared to $316,000 for the
same period 1995. Return on average assets was approximately 1.26% and return
on average equity was approximately 11.0% through June 30, 1996, compared to
.74% and 6.36% respectively for June 30, 1995. The major contributing factor
in the increase in income from 1996 to 1995 was the reduction of other
operating expenses and the increase in other operating income.

Net interest income increased slightly from 1995 to 1996. The net margin, the
percentage of net interest income to net earning assets, increased slightly
from 1995 to 1996.

Assets in 1996 increased by $6,674,000 or 7.9% from 1995 caused by an increase
in deposits and equity during the period.

Securities held to maturity at June 30, 1996 were $43,078,000 compared to
$39,632,000 at June 30, 1995.

Loans totaled $36,342,000 at June 30, 1996 compared to $33,853,000 at June 30,
1995. This increase was caused by an increase in the loan demand in the Bank's
marketing area.

PROVISIONS FOR LOAN LOSSES

The provisions for loan losses charged to operating expenses is the result of a
continuing review and assessment of the loan portfolio, taking into
consideration the history of charge-offs in the loan portfolio by category, the
current economic conditions in the lending area, the payment history, ability
to repay, and strength of collateral of specific borrowers and other relevant
factors. The 1996 provision was $20,000 compared to $0 for 1995. Recoveries
in 1996 were $17,000 compared to $84,000 in 1995. Loans charged-off declined
from the 1995 figure of $63,000 to $21,000 in 1996. The loan loss allowance as
a percentage of outstanding loans decreased from 1.46% in a June 30, 1995 to
1.31% at June 30, 1996. Loans past due ninety (90) days or more and
non-accrual loans increased in 1996 to $199,000 at June 30, 1996 compared to
$177,000 at June 30, 1995.

OTHER OPERATING INCOME

Other operating income in 1996 totaled $595,000 compared to $409,000 in 1995.
The increase was caused mostly by the increase in service charges and other
related fees on deposit accounts and the recovery of securities previously
charged down during 1996.

OTHER OPERATING EXPENSES

Other operating expenses decreased $190,000 or 12.54% from 1995 to 1996. This
decrease was caused by a decrease in salaries and employees' benefits and the
F.D.I.C. Assessment.

33
<PAGE> 45
INCOME TAX EXPENSE

Income tax expense increased by $144,000 from 1995 to 1996 and approximated 32%
of income before income taxes and minority interest in 1996 and 29% in 1995.

SECURITIES

In May 1993 the FASB issued SFAS No. 115 "Accounting for Certain Investments in
Debt and Equity Securities." This standard required Community to classify its
securities portfolio into securities held for trading, securities held to
maturity and securities available for sale. Community adopted this accounting
standard effective December 31, 1993, however, the adoption had no effect on
the financial position of the company in 1995 or 1996 because all securities
were classified to be held until maturity. Securities increased to $43,078,000
at June 30, 1996, from $39,632,000 at June 30, 1995.

The carrying amount of securities at the dates indicated is set forth in the
table below:

HELD TO MATURITY SECURITIES

<TABLE>
<CAPTION>
June 30, 1996 June 30, 1995
-------------------- ---------------------
<S> <C> <C>
U.S. Treasury $ 5,996,000 $ 7,000,000
U.S. Gov't. Agencies 34,634,000 30,053,000
State & Political Subd. 2,448,000 2,579,000
-------------------- ---------------------

Total $ 43,078,000 $ 39,632,000
==================== =====================
</TABLE>

LOANS

Loans outstanding at June 30, 1996 totaled $35,867,000 net of the allowance for
loan losses compared to $33,359,000 at June 30, 1995.

NON-ACCRUAL LOANS

Non-accrual loans are loans on which the accrual of interest income has been
discontinued and previously accrued interest has been reversed because the
borrower's financial condition has deteriorated to the extent that the
collection of principal and interest is doubtful. Until the loan is returned
to performing status, generally as the result of the full payment of all past
due principal and interest, interest income is recorded on the cash basis.
Non-accrual loans totaled $129,000 at June 30, 1996 compared to $172,000 at
June 30, 1995.

OTHER REAL ESTATE OWNED

Foreclosed properties held in the other real estate owned account decreased
from $242,000 at June 30, 1995 to $213,000 at June 30, 1996. The 1996 balance
represents 0.23% of assets compared to .28% of assets in 1995.

34
<PAGE> 46
SUMMARY OF LOAN LOSS EXPERIENCE

The loan loss experience for the two periods ending June 30, 1996 and 1995 is
summarized in the following table:

<TABLE>
<CAPTION>
June 30,
------------------------------------------
1996 1995
------------------- -------------------
<S> <C> <C>
Balances at beginning of period $ 459,000 $ 473,000
Provision charged to expense 20,000
Loans charged off -21,000 -63,000
Recoveries 17,000 84,000
------------------- -------------------

Balance at end of period $ 475,000 $ 494,000
=================== ===================
</TABLE>

DEPOSITS

Total deposits at June 30, 1996 were $79,420,000 up $5,645,000 from June 30,
1995.

CAPITAL RESOURCES

Community maintains adequate capital for regulatory purposes and has sufficient
capital to absorb the risks inherent in the business. Risk-based capital
requirements have been established that weight different assets according to
the level of risk associated with that type of assets. Risk-based capital at
June 30, 1996 was $11,438,000 compared to $10,520,000 at June 30, 1995. The
capital position is considered strong. The increasing trend in capital is the
result of earnings and a moderate dividend policy.

FOR THE YEARS DECEMBER 31, 1995 AND 1994

The following discussion provides certain information concerning the financial
condition and results of operations of Community for the years ended December
31, 1995 and 1994. The financial position and results of operations of
Community were due primarily to its banking subsidiary Community State Bank.
Management's discussion should be read in conjunction with the financial
statements and accompanying notes for the years ended December 31, 1995 and
1994 included elsewhere herein.

OVERVIEW

Net income for 1995 totaled $871,718, compared to $1,041,088 for 1994. Return
on average assets was 1.02% and return on average equity was 8.51% for 1995,
compared to 1.22% and 10.69%, respectively, for 1994.

Net interest income decreased from 1994 to 1995. The net margin, the
percentage of net interest income to net earning assets, decreased slightly in
1995, an indication of the continual low interest rates on earning assets and
increased rates on deposits. Average earning assets comprised 91.69% and
91.65% of total average assets in 1995 and 1994, respectively.

Assets in 1995 increased by $7,226,588, or 8.38%, from 1994 caused by an
increase in customer deposits of $6,387,907, or 8.42%.

Securities at December 31, 1995 were $38,930,102, compared to $44,060,074 at
December 31, 1994. This change was caused by a shift in funds from government
securities to Federal Funds sold from 1994 to 1995. Loans totaled

35
<PAGE> 47
$34,431,581 at December 31, 1995 and averaged 48.46% of earning assets in 1995.
The remaining earnings assets of Community consisted of Federal Funds Sold.
The net yield on securities declined .17% from 1994 to 1995. The net yield on
loans increased .38% during the same period.

Loan demand continued to improve in 1995. Net loans increased by $4,115,498
from 1994 to 1995.

PROVISION FOR LOAN LOSSES

The provision for loan losses charged to operating expenses is the result of a
continuing review and assessment of the loan portfolio, taking into
consideration the history of charge-offs in the loan portfolio by category, the
current economic conditions in the lending area, the payment history, ability
to repay, and strength of collateral of specific borrowers, and other relevant
factors. The 1995 provision was -0-, compared to -0- in 1994. Recoveries in
1995 were $140,995, compared to $60,592 in 1994. Loans charged off increased
from the 1994 figure of $57,701 to $156,012 in 1995.

Community maintains an allowance for loan losses which it believes is adequate
to absorb reasonably foreseeable losses in the loan portfolio. The allowance
for loan losses decreased $15,017 from December 31, 1994 to 1995. Coupled with
the increase in loans, the allowance for loan losses as a percentage of total
loans declined from 1.54% at year-end 1994 to 1.31% at year-end 1995.

OTHER OPERATING INCOME

Other operating income in 1995 totaled $949,702, compared to $873,077 in 1994.
The increase was caused primarily by an increase in service fees on deposit
accounts of approximately $183,000 offset by a decrease of approximately
$171,000 in the recovery of previously charged down securities. An additional
$60,000 increase in miscellaneous income was recognized in 1995.

OTHER OPERATING EXPENSES

Other operating expenses increased $152,480, or 5.61%, from 1994 levels.
Salaries and employee benefits increased by $66,023, or 4.74%, caused entirely
by salary adjustments and increased hospitalization insurance for 1995.
Occupancy expenses increased by $160,756 from year-end 1994 to 1995. This
increase was caused basically by a increase in depreciation expense on bank
facilities due to the addition of a new computer system and a new branch.

INCOME TAX EXPENSE

Income tax expense decreased $125,000 from 1995 to 1996 and approximated 27% of
income before income taxes and minority interest in 1996 and 30% in 1995.

36
<PAGE> 48
INTEREST RATE SENSITIVITY

Community's interest rate sensitivity is modeled in the GAP Analysis Table.
The table depicts a management measurement of the balance sheet interest rate
sensitivity GAP at December 31, 1995. Interest rate sensitivity results from
the timing differences at which assets and liabilities may be repriced as
market rates change. Community also utilizes other measurement techniques to
analyze interest rate sensitivity. The table indicates Community is
positioned, at December 31, 1995, at negative gaps in the 90 and 365 day
ranges. In a rising interest situation within these ranges Community would
theoretically reprice more liabilities than assets; therefore, decreasing net
interest income.

GAP ANALYSIS TABLE
(Amounts in Thousands)

<TABLE>
<CAPTION>
0-90 90-365 1+ Non Interest
Days Days Years Bearing Total
------------- ------------- ------------- ----------------- --------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Federal funds sold $ 10,575 $ $ $ $ 10,575

Securities and loans 4,741 13,121 55,959 73,821

Other assets 9,089 9,089
------------- ------------- ------------- ----------------- --------------

Total assets $ 15,316 $ 13,121 $ 55,959 $ 9,089 $ 93,485
============= ============= ============= ================= ==============

LIABILITIES:
Money market, NOW
and savings $ 36,559 $ $ $ $ 36,559

Time deposits 7,196 10,833 15,312 33,341

Non interest-
bearing demand 12,351 12,351

Other liabilities and
equity 11,234 11,234
------------- ------------- ------------- ----------------- --------------

Total liabilities
and equity $ 43,755 $ 10,833 $ 15,312 $ 23,585 $ 93,485
============= ============= ============= ================= ==============

Periodic gap $ -28,439 $ 2,288 $ 40,647 $ -14,496

Cumulative gap -28,439 -26,151 14,496

Percent of total earning
assets 33.7% 30.9% 17.2%

</TABLE>

37
<PAGE> 49
ANALYSIS OF FINANCIAL CONDITION

SECURITIES

In May 1993, the FASB issued SFAS No. 115 "Accounting for Certain Investments
in Debt and Equity Securities." This standard required Community to classify
its securities portfolio into securities held for trading, securities held to
maturity, and securities available for sale. Community adopted this accounting
method effective December 31, 1993, however, the adoption had no effect on the
financial position of the company because all investments were classified to be
held for maturity.

In 1995 securities held to maturity decreased by $5,129,972 from 1994. The
total value of the securities at December 31, 1995, was $38,930,102. The
decrease from 1994 to 1995 is reflected by an increase in net loans of
$4,115,498 from 1994 to 1995.

SECURITIES PORTFOLIO

The carrying amount of securities at the dates indicated is set forth in the
table below:

HELD TO MATURITY SECURITIES

<TABLE>
<CAPTION>
December 31,
---------------------------------------
1995 1994
------------------ -----------------
<S> <C> <C>
U.S. Treasury $ 6,997,860 $ 7,003,453
U.S. Agencies 28,846,097 34,188,497
State & Political Subd. 3,086,145 2,868,124
------------------ -----------------

Total $ 38,930,102 $ 44,060,074
================== =================
</TABLE>

SECURITIES MATURITY DISTRIBUTION

At December 31, 1995, securities held to maturity at cost were scheduled to
mature as follows:

<TABLE>
<CAPTION>
After One
Within But Within
One Year Five Years
-------------------------------- -------------------------------

Amount Yield Amount Yield
---------------- ------------ ---------------- -----------
<S> <C> <C> <C> <C>
U.S. Treas'y & Gov't
Agencies $ 16,001,511 5.866% $ 17,990,016 6.001%
State & Political Subd. 899,392 6.187 1,499,721 5.484
---------------- ----------------

Total $ 16,900,903 $ 19,489,737
================ ================

</TABLE>

38
<PAGE> 50
LOANS

Loans outstanding at December 31, 1995, totaled $34,434,581 net of the
allowance for loan losses. The following table shows the amounts of gross
loans outstanding according to the type of loan for each of the periods
rendered.

<TABLE>
<CAPTION>
December 31,
-----------------------------------------------------------------
1995 1994
------------------------------ -----------------------------
Amount Percent Amount Percent
---------------- ---------- ----------------- ---------
<S> <C> <C> <C> <C>
Real estate $ 11,603,038 33.26% $ 10,131,766 32.91%
Commercial & Agricultural 14,998,166 42.99 13,023,836 42.30
Installment loans to
individuals 7,838,604 22.47 6,932,426 22.52
Other 450,295 1.28 701,594 2.27
---------------- ---------- ----------------- ---------

Total $ 34,890,103 100.00% $ 30,789,622 100.00%
================ ========== ================ =========
</TABLE>

Real estate loans comprise 33.26% and commercial and agricultural loans 42.99%
of the loan portfolio at December 31, 1995. These percentages are consistent
with 1994. The portfolio primarily consists of fixed rate loans.

NON-PERFORMING ASSETS

Non-accrual loans and foreclosed assets are included in non-performing assets.
Non-performing assets decreased $22,662, during 1995 to $414,414 at December
31, 1995. Other real estate decreased from $257,188 in 1994 to $227,474, while
non-accrual loans increased from $179,888 to $186,940 from 1994 to 1995.

Non-accrual loans are loans on which the accrual of interest income has been
discontinued and previously accrued interest has been reversed because the
borrower's financial condition has deteriorated to the extent that the
collection of principal and interest is doubtful. Until the loan is returned
to performing status, generally as the result of the full payment of all
past-due principal and interest, interest income is recorded on the cash basis.
Interest income that would have been recognized on non-accrual loans had those
loans been on accrual status at contractual terms throughout 1995 was
approximately $18,650.

SUMMARY OF LOAN LOSS EXPERIENCE

The loan loss experience for the two years ended December 31, 1995 and 1994 is
summarized in the following table.

<TABLE>
<CAPTION>
1995 1994
------------------ -----------------
<S> <C> <C>
Balances at beginning of year $ 473,539 $ 470,711
Provision charged to expense 0 0
Loans charged off -156,012 -57,701
Recoveries 140,995 60,529
------------------ -----------------

Balance at end of year $ 458,522 $ 473,539
================== =================

Ratio of net charge offs to average
loans outstanding 0.05% -0.01%
</TABLE>

39
<PAGE> 51
DEPOSITS

Total deposits at December 31, 1995, were $82,250,529, an increase of
$6,387,907 from the December 31, 1994, total of $75,862,622. This increase in
deposits was caused by an increase in certificates of deposit.

LIQUIDITY

Liquidity involves Community's ability to raise funds to support asset growth
or to reduce assets, meet deposit withdrawals and other borrowing needs,
maintain reserve requirements and otherwise operate the company on an ongoing
basis.

As shown in the 1995 statement of cash flows, cash and cash equivalents
increased by $8,346,078. This increase was caused basically by the maturity of
U.S. Government securities during 1995 and the funds being re-invested in
overnight Federal Funds sold and the increase in deposits. Net income from
operations contributed $1,412,166 in 1995, and $1,326,630 in 1994. During the
past two years, Community has relied on its position in Federal Funds sold and
maturities in the securities portfolio for liquidity. These factors are
considered sufficient to maintain adequate liquidity for Community.

BANK PREMISES AND EQUIPMENT

Community owns three banking facilities and leases one banking facility and an
operations center. The book value of bank premises and equipment at December
31, 1995 was $1,512,022, compared to $1,663,679 at December 31, 1994.

CAPITAL RESOURCES

Community maintains adequate capital for regulatory purposes, and has
sufficient capital to absorb the risks inherent in the business. Risk-based
capital requirements have been established that weight different assets
according to the level of risk associated with that type of assets.

The following table summarizes specific capital ratios of Community at December
31, 1995 and 1994:

<TABLE>
<CAPTION>
Minimum
Regulatory
1995 1994 Guidelines
---- ---- ----------
<S> <C> <C> <C>
Risk-based capital ratios:

Tier 1 capital 11.11% 11.41% 4.0%
Total capital 11.54% 11.89% 8.0%

Leverage ratio 11.11% 11.41% 3.0%
</TABLE>

CERTAIN STATISTICAL INFORMATION

The following tables present historical statistical information
concerning Community's consolidated balance sheet items, investment securities,
loan portfolio, loan loss experience, deposits and return on equity and assets
for the periods indicated, and do not purport to be indicative of results that
may be obtained in the future.

40
<PAGE> 52
<TABLE>
<CAPTION>
1995 1994
----------------------------------------- -----------------------------------
Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate
-------------- ------------ ----------- ---------- --------- -----------
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
ASSETS

Interest-earning assets:
Loans(1) $ 33,282 $ 3,012 9.05% $ 27,723 $ 2,403 8.67%
Taxable securities 38,101 2,314 6.07 44,600 2,785 6.24
Tax-exempt securities 2,690 154 5.72 2,626 154 5.86
Federal funds sold 4,558 268 5.88 3,027 136 4.49
-------------- ------------ ----------- ---------- --------- -----------

Total interest-earning assets 78,631 5,748 7.31% 77,976 5,478 7.03%

Noninterest-earning assets:
Cash and due from banks 4,867 4,852
Premises and equipment, net 1,573 1,473
Other assets 1,154 1,250
Less allowance for loan losses -466 -472
-------------- ------------ ----------- ---------- --------- -----------

Total $ 85,759 $ 85,079
============== ==========

LIABILITIES AND SHAREHOLDERS' EQUITY

Interest-bearing liabilities:
Money market and NOW accounts $ 24,663 $ 703 2.85% $ 27,257 $ 787 2.89%
Savings deposits 9,471 280 2.95 10,875 323 2.97
Time deposits 30,810 1,619 5.25 26,827 1,003 3.74
-------------- ------------ ----------- ---------- --------- -----------

Total interest-bearing deposits 64,944 2,602 4.01 64,959 2,113 3.25

Federal funds purchased 116 7 6.02 98 5 5.1
-------------- ------------ ----------- ---------- --------- -----------

Total interest-bearing liabilities 65,060 2,609 4.01 65,057 2,118 3.26

Noninterest-bearing liabilities:
Demand deposits 9,765 9,710
Other 689 570
-------------- ----------
Total liabilities 75,514 75,337
Shareholders' equity 10,245 9,742
-------------- ----------

Total $ 85,759 $ 85,079
============== ------------ ========== ---------

Net interest income $ 3,139 $ 3,360
============ ----------- ========= -----------

Net yield on interest-earning assets 3.99% 4.33%
</TABLE>

(1) For the purpose of these computations, nonaccruing loans are included in
the average loan amounts outstanding.

41
<PAGE> 53
(In Thousands)
<TABLE>
<CAPTION>
1995 Compared to 1994
Increase (Decrease) due to (1)
---------------------------------------------------
Volume Rate Net
---------------- --------------- --------------
(In Thousands)
<S> <C> <C> <C>
Interest earned on:
Loans $ 503 $ 106 $ 609
Taxable securities -405 -66 -471
Tax-exempt securities 0 0 0
Federal funds sold 90 42 132
---------------- --------------- --------------

Total interest-earning assets $ 188 $ 82 $ 270
================ =============== ==============

Interest paid on:
Money market and NOW accounts $ -70 $ -14 $ -84
Savings deposits -41 -2 -43
Time deposits 211 405 616
Federal funds purchased 1 1 2
---------------- --------------- --------------

Total interest-bearing liabilities $ 101 $ 390 $ 491
================ =============== ==============
</TABLE>

(1) The change in interest due to both volume and rate has been allocated to
volume and rate changes in proportion to the relationship of the absolute
dollar amounts of the change in each.

42
<PAGE> 54
SECURITIES PORTFOLIO

The following tables sets forth the carrying amount of securities at the dates
indicated:

<TABLE>
<CAPTION>
December 31,
-------------------------------------
1995 1994
------------------ ----------------
(In Thousands)
<S> <C> <C>
U.S. Treasury and other U.S. government agencies $ 35,844 $ 41,192
States and political subdivisions 3,086 2,868
------------------ ----------------

Total $ 38,930 $ 44,060
================== ================
</TABLE>

The following table sets forth the maturities of securities at December 31,
1995 and the weighted average yields of such securities (calculated on the
basis of the cost and effective yields weighted for the scheduled maturity of
each security)

<TABLE>
<CAPTION>
Maturing
-------------------------------------------------------------
Within After One But
One Year Within Five Years
---------------------------- --------------------------
Amount Yield Amount Yield
-------------- ----------- ------------ -----------
(In Thousands)
<S> <C> <C> <C> <C>
U.S. Treasury and other U.S.
government agencies $ 16,002 5.866% $ 17,990 6.001%
State and political
subdivisions 899 6.187 1,500 5.484
-------------- ----------- ------------ -----------

Total $ 16,901 5.883% $ 19,490 5.961%
============== =========== ============ ===========
</TABLE>

LOAN PORTFOLIO

The following table shows Community's loan distribution, net of unearned
discount, at the end of each of the last two years.

<TABLE>
<CAPTION>
December 31,
------------------------------
1995 1994
------------- -------------
(In Thousands)
<S> <C> <C>
Loans:
Commercial and agricultural $ 14,998 $ 13,024
Real estate 11,603 10,132
Installment 7,839 6,932
Other 450 702
------------- -------------

Total loans $ 34,890 $ 30,790
============= =============
</TABLE>

NONACCRUAL, PAST DUE, AND RESTRUCTURED LOANS

The following table summarizes Community's nonaccrual and past due loans:

<TABLE>
<CAPTION>
December 31,
-------------------------------
1995 1994
-------------- -------------
(In Thousands)
<S> <C> <C>
Nonaccrual loans $ 187 $ 180
Accruing loans past due 90 days or more 0 3
-------------- -------------

Total $ 187 $ 183
============== =============

</TABLE>

43
<PAGE> 55

Information with respect to nonaccrual loans at December 31, 1995 and 1994 is
as follows:

<TABLE>
<CAPTION>
December 31,
-------------------------------
1995 1994
-------------- -------------
(In Thousands)
<S> <C> <C>
Nonaccrual loans $ 187 $ 180
Interest income that would have been recorded
under original terms 18 16
Interest income recorded during the period 0 0
</TABLE>

SUMMARY OF LOAN LOSS EXPERIENCE

This table summarizes Community's loan loss experience for each of the two
years ended December 31, 1995 and 1994.

<TABLE>
<CAPTION>
December 31,
-------------------------------
1995 1994
-------------- -------------
(In Thousands)
<S> <C> <C>
Balance at January 1 $ 474 $ 471
Charge-offs:
Commercial and agricultural 129 35
Real estate 27 23
-------------- -------------
156 58

Recoveries:
Commercial and agricultural 118 61
Real estate 23
-------------- -------------
141 61

Less net charge-offs 15 -3
Additions charged to operations 0 0
-------------- -------------

Balance at December 31 $ 459 $ 474
============== =============

Ratio of net charge-offs to average loans outstanding 0.05% -0.01%
============= ============
</TABLE>

The amount charged to operations and the related balance in the allowance for
loan losses is based upon periodic evaluations of the loan portfolio by
management. These evaluations consider several factors including, but not
limited to, general economic conditions, loan portfolio composition, prior loan
loss experience, and management's estimate of future potential losses.

This table shows an allocation of the allowance for loan losses as of the end
of each of the last two years:

<TABLE>
<CAPTION>
1995 Percent 1994 Percent
---- of Loans ---- of Loans
In Each In Each
Category To Category To
Amount Total Loans Amount Total Loans
------------ --------------- ------------ --------------
(In Thousands)
<S> <C> <C> <C> <C>
Commercial and
agricultural $ 181 39% $ 170 36%
Real estate 241 53 247 52
Installment 35 7 52 11
Other 2 1 5 1
------------ --------------- ------------ --------------

Total $ 459 100% $ 474 100%
============ =============== ============ ==============
</TABLE>

44
<PAGE> 56
DEPOSITS

The average daily amount of deposits and rates paid on such deposits is
summarized for the period indicated in the following table:

<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------------------------------------
1995 1994
----------------------------- -------------------------
Amount Rate Amount Rate
-------------- ------------ ------------ ----------
(In Thousands)
<S> <C> <C> <C> <C>
Noninterest-bearing demand deposits $ 9,765 - % $ 9,710 - %
Money market and NOW accounts 24,663 2.85 27,257 2.89
Savings deposits 9,471 2.95 10,875 2.97
Time deposits 30,810 5.25 26,827 3.74
-------------- ------------

Total $ 74,709 $ 74,669
============== ============
</TABLE>

Maturities of time certificates of deposit and other time deposits of $100,000
or more issued by Community, outstanding at December 31, 1995 are summarized as
follows:

<TABLE>
<CAPTION>
Time
Certificates Other
Of Time
Deposit Deposits Total
----------------- -------------- -------------
(In Thousands)
<S> <C> <C> <C>
3 months or less $ 2,999 $ 835 $ 3,834
Over 3 through 6 months 507 507
Over 6 through 12 months 2,033 2,033
----------------- -------------- -------------

Total $ 5,539 $ 835 $ 6,374
================= ============== =============

</TABLE>

45
<PAGE> 57
SELECTED RATIOS

The following table shows certain ratios of Community for each of the last two
years:

<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------
1995 1994
-------------- -------------
<S> <C> <C>
Return on average assets 1.02% 1.22%
Return on average equity 8.51% 10.69%
Dividend payout ratio 37.64% 31.52%
Average equity to average assets ratio 11.95% 11.45%

</TABLE>

MANAGEMENT OF CBI AND BANK

BOARD OF DIRECTORS

Certain information concerning the Board of Directors of each of CBI and
Bank, as provided by each of the directors, is set forth below. The Board of
Directors of CBI and Bank consist of the same eleven individuals. Directors of
CBI and Bank are elected at each annual meeting of the shareholders of CBI and
Bank, respectively, to hold office until the next annual meeting of such entity
and until their respective successors are elected and qualified.
<TABLE>
<CAPTION>
Principal Occupation for
Company the Past Five Years and
Name and Age Director Since: Certain Other Directorships
----------------------------- --------------------- -------------------------------------
<S> <C> <C>
Terrell A. Adams (51) 1976 Banker

W. R. Allison (68) 1982 Banker, President, Merchants Bank
and Trust Company, Bay St. Louis, MS

Guy C. Billups, Jr. (67) 1974 Banker, Chairman, Merchants Bank and
Trust Company, Bay St. Louis, MS

Guy C. Billups, III (38) 1991 Banker, Director, Merchants Bank &
Trust Co., Bay St. Louis, MS

Ann D. Biundo (83) 1982 Retired

Joseph J. Biundo, Jr. (58) 1975 Physician

Dr. Charles Genovese (79) 1953 Physician

Richard S. Sanders (75) 1973 Retired

R. E. L. Stewart, Jr. (68) 1991 Physician

Rene J. C. Tricou, Jr. (72) 1972 Real estate broker

G. F. Tycer, Jr. (72) 1975 Owner, concrete contractor

</TABLE>

46
<PAGE> 58
EXECUTIVE OFFICERS OF CBI

Executive officers of CBI are appointed by and serve at the pleasure of the
Board of Directors of CBI. The executive officer(s) of CBI and certain
information about them, are set forth below.

<TABLE>
<CAPTION>
Principal Occupation for the
Past Five Years and Certain
Name and Age Position Other Directorships
------------------------- ---------------------------- ----------------------------------
<S> <C> <C>
Richard S. Sanders (75) Chairman of the Board Retired

Guy C. Billups, Jr. (67) Vice Chairman of the Board Banker, Chairman, Merchants Bank
& Trust Co., Bay St. Louis, MS

Terrell A. Adams (51) President Banker

G. F. Tycer, Jr. (72) Treasurer Owner, concrete contractor
</TABLE>

EXECUTIVE OFFICERS OF BANK

Executive officers of Bank are appointed by and serve at the pleasure of
the Board of Directors of Bank. The executive officers of Bank and certain
information about them are set forth below:

<TABLE>
<CAPTION>
Principal Occupation for the
Past Five Years and Certain
Name and Age Position Other Directorships
---------------------- -------------------------- ------------------------------
<S> <C> <C>
Terrell A. Adams (51) President President of Bank

W. R. Allison (68) Senior Vice President President of Merchants Bank &
Trust Co., Bay St. Louis, MS
</TABLE>

EXECUTIVE COMPENSATION

The following table sets forth information concerning the aggregate annual
remuneration of each of the three (3) highest paid executive officers or
directors of CBI for the year ended December 31, 1995, and the aggregate annual
remuneration of all executive officers and directors as a group, including
those individually listed.

<TABLE>
<CAPTION>
Name of Individual Aggregate Remuneration for the
or Number in Group Capacities in Which Served Year Ended December 31, 1995
------------------------------ -------------------------- ----------------------------
<S> <C> <C>
Terrell A. Adams President and Director $109,453(1)

Guy C. Billups, Jr. Vice Chairman of the Board 66,238(2)

W. R. Allison Senior Vice President 33,170(3)

All Directors and Executive $257,111
========
Officers as Group (11 persons,
including those listed above)
</TABLE>

__________________________

(1) Includes base salary of $100,507, directors' fees of $7,600 and
contributions under the bank's retirement plan of $1,346.

(2) Includes base salary of $59,688, directors' fees of $5,750 and
contributions under the bank's retirement plan of $800

(3) Includes base salary of $26,663, directors' fees of $6,150 and
contributions under the bank's retirement plan of $357.

47
<PAGE> 59
COMPENSATION PURSUANT TO PLANS

Bank adopted the Community State Bank 401(k) Profit Sharing Plan (the
"401(k) Plan") effective January 1, 1989, which conforms to the requirements of
Section 401(k) of the Code and is administered through First National Bank of
Commerce, New Orleans, Louisiana. The amount of contribution by each
participant is discretionary with the participant, but may not be less than 1%
nor more than 10% of the participant's compensation. Total deferrals in any
calendar year cannot exceed $9,500 (which limit was established in 1988 and is
subject to certain cost of living changes). While participation in the 401(k)
Plan is voluntary, any eligible employee who has completed one year of service
(defined in the 401(k) Plan as 1,000 hours of service) is eligible to
participate in the 401(k) Plan.

Employee contributions are fully vested. Participants become vested in
Bank contributions in accordance with the vesting schedule set forth in the
401(k) Plan, which provides for vesting of 20 percent after 2 years of service,
40 percent vesting after 3 years of service, 60 percent vesting after 4 years
of service, 80 percent vesting after 5 years of service, and 100 percent
vesting after 6 years of service. The Plan administrator will direct the
trustee to pay benefits to participants under either a single lump sum payment
or equal installments over a period of not more than the participant's assumed
life expectancy at the time of distribution. Generally, withdrawals cannot be
processed until after the participant reaches age 59 1/2 or upon the
participant's death, disability, termination of employment or reasons of proven
financial hardship. The 401(k) Plan also allows the participant to apply for a
loan as long as certain criteria are met.

TRANSACTIONS WITH MANAGEMENT

Bank had during the past two years, and expects to have in the future, loan
transactions in the ordinary course of business with directors and officers of
CBI and Bank, and shareholders owning in excess of five percent of CBI's Common
Stock, relatives of such persons and corporations and firms of which they are
officers or in which they or their immediate families have at least a 10
percent equity interest. Such loans amounted to approximately $835,000 at
December 31, 1995, constituting 2.46 percent of Bank's total loans as of such
date and 8.04 percent of CBI's shareholders' equity as of such date. These
transactions have been and will be on the same terms, including interest rates
and collateral, as those prevailing at the time for comparable transactions
with unaffiliated persons and did not and will not involve more than the normal
risk of collectibility or present other unfavorable features.

48
<PAGE> 60
CERTAIN INFORMATION CONCERNING HHC

GENERAL

HHC is a multi-bank holding company headquartered in Gulfport, Mississippi
with total consolidated assets of approximately $2.3 billion at June 30, 1996.
HHC operates a total of 70 banking offices and 102 automated teller machines in
the States of Mississippi and Louisiana through two wholly owned bank
subsidiaries, Hancock Bank, Gulfport, Mississippi, organized in 1899 ("Hancock
Bank MS") and Hancock Bank of Louisiana, Baton Rouge, Louisiana, organized in
August 1990 ("Hancock Bank").

As of June 30, 1996, the authorized capital stock of HHC consists of
20,000,000 shares of HHC Common Stock of which, 9,021,901 shares are issued and
outstanding and no shares are held in its treasury. Assuming consummation of
the Mergers without any CBI's or Bank's shareholders exercising their
dissenters rights, HHC will have 9,468,901 shares of Common Stock issued and
outstanding after the Closing.

Both Hancock Bank MS and Hancock Bank are community oriented and focus
primarily on offering commercial, consumer and mortgage loans and deposit
services to individuals and small to middle market businesses in their
respective market areas. Hancock Bank MS and Hancock Bank's operating strategy
is to provide their customers with the financial sophistication and breath of
products of a regional bank while successfully retaining the local appeal and
level of service of a community bank.

MERGER AND ACQUISITION HISTORY

HHC has expanded its market area through a series of mergers and branch and
deposit acquisitions. Beginning with the 1985 acquisition of the
Pascagoula-Moss Point Bank in Pascagoula, Mississippi ("PMP"), HHC has assumed
approximately $799.8 million in deposit liabilities and acquired approximately
$891.7 million in assets through acquisitions or purchase and assumption
transactions involving six (6) commercial banks, one (1) savings association
and one (1) savings association branch. At the time of the PMP acquisition,
PMP had total assets of approximately $132 million and total deposit
liabilities of approximately $114 million.

The majority of HHC's acquisition activity occurred in 1990 and 1991 and
then again in 1994 and 1995. In June of 1990, Metropolitan National Bank
("MNB") was merged into Hancock Bank MS. At the time of its acquisition, MNB
had total assets of approximately $98.8 million and total deposit liabilities
of approximately $95.1 million. Also in June of 1990, pursuant to a Purchase
and Assumption Agreement, Hancock Bank MS acquired the Poplarville, Mississippi
branch of Unifirst Bank for Savings from the Resolution Trust Corporation
("RTC"). The acquisition increased HHC's total assets by approximately $7.8
million and its total deposit liabilities by approximately $7.4 million. In
August 1990, HHC formed Hancock Bank for the purpose of assuming the deposit
liabilities and acquiring the consumer loan portfolio, corporate credit card
portfolio and non-adversely classified securities portfolio of AmBank, Baton
Rouge, from the FDIC. As a result of the transaction, Hancock Bank acquired
fifteen (15) branch locations in the greater Baton Rouge area, approximately
$337.5 million in assets and approximately $300.9 million in deposit
liabilities. In August 1991, Hancock Bank MS acquired certain assets and
deposit liabilities of Peoples Federal Savings Association, Bay Saint Louis,
Mississippi, from the RTC. As a result of the transaction, HHC acquired assets
of approximately $39.0 million and deposit liabilities of approximately $38.5
million.

In April 1994, HHC acquired First State Bank and Trust Company of East
Baton Rouge Parish, Baker, Louisiana ("First State Bank"). First State Bank
was merged with Hancock Bank under the pooling-of-interests accounting method.
The acquisition of First State Bank expanded HHC's market share in East Baton
Rouge Parish by increasing HHC's total assets by approximately $82 million and
total deposit liabilities by approximately $70 million. Additionally,
effective January 31, 1995, Washington Bancorp, Inc. and its subsidiary bank,
Washington Bank & Trust Company, Franklinton, Louisiana ("Washington") merged
with and into HHC and Hancock Bank, respectively, with all six (6) facilities
of Washington becoming branches of Hancock Bank. At the time of the
acquisition, Washington had total assets of

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approximately $90 million and total deposits of approximately $77 million. On
January 13, 1995, HHC also merged with First Denham Bancshares, Inc., Denham
Springs, Louisiana. Its wholly owned subsidiary, First National Bank of Denham
Springs ("FNB Denham") remained a separate subsidiary of HHC. At the time of
acquisition, FNB Denham had total assets of approximately $108 million and
total deposits of approximately $96.5 million. Effective August 15, 1996, HHC
merged FNB Denham with and into Hancock Bank and the six (6) offices of FNB
Denham became branches of Hancock Bank.

HHC and Hancock Bank have entered into an Agreement and Plan of
Reorganization dated July 31, 1996 with Southeast National Bank, Hammond,
Louisiana ("Southeast"). Under the proposed transaction, Southeast would be
merged with and into Hancock Bank with the two (2) offices of Southeast
becoming branches of Hancock Bank. The proposed merger is expected to be
consummated in the first quarter of 1997. At June 30, 1996, Southeast had
approximately $37.1 million in total assets and $32.9 million in total
deposits.

HHC's regulatory capital at June 30, 1996, both on a historical basis and
after giving pro forma effect to the Mergers, as of that date, substantially
exceeds all current minimum regulatory requirements.

INDEMNIFICATION

The HHC Articles of Incorporation and Bylaws provide for indemnification by
HHC, to the fullest extent permitted by the Mississippi Business Corporation
Act, of directors, officers, employees and agents for expenses, judgments,
fines and amounts paid in settlement by such persons. See "DESCRIPTION OF HHC
CAPITAL STOCK -- Indemnification of Directors, Officers and Employees" and
"COMPARISON RIGHTS OF SHAREHOLDERS -- Indemnification."

CHANGES IN CONTROL

Certain provisions of the HHC Articles of Incorporation and Bylaws may have
the effect of preventing, discouraging or delaying any change in control of
HHC. The classification of the HHC Board of Directors would delay any attempt
by dissatisfied shareholders or anyone who obtains a controlling interest in
the HHC Common Stock to elect a new board of directors. The classes of
directors serve staggered three year terms so that one-third of the directors
are elected each year. These staggered terms of service may make it more
difficult for HHC shareholders to effect a change in the majority of the HHC
directors because replacement of a majority of the directors will normally
require two annual meetings of shareholders. Accordingly, this provision may
have the effect of discouraging hostile attempts to gain control of HHC.

The HHC Articles of Incorporation contain in Article Fifth provisions
regarding the vote required to approve certain business combinations or other
significant corporate transactions involving HHC and a substantial shareholder.
Mississippi law generally requires the affirmative vote of the holders of a
majority of the shares entitled to vote at the meeting to approve a merger,
consolidation or dissolution of HHC or a disposition of all or substantially
all of HHC's assets. Article Fifth raises the required affirmative vote to 80
percent of the total number of votes entitled to be cast to approve these and
other significant corporate transactions ("business combinations") if a
"Substantial Shareholder" (as defined) is a party to the transaction or its
percentage equity interest in HHC will be increased by the transaction.
Two-thirds of the whole Board of Directors may, in all such cases, determine
not to require such 80 percent affirmative vote, but only if a majority of the
directors making such determination are "Continuing Directors" (as defined).
Such determination may only be made prior to the time the Substantial
Shareholder in question achieves such status.

A "Substantial Shareholder" generally is defined under Article Fifth as the
"beneficial owner" of more than 10 percent of the outstanding shares of stock
of HHC entitled to vote in the election of directors ("voting shares").
"Beneficial ownership" generally is defined in accordance with the definition
of beneficial ownership in Rule 13d-3 under the Securities Exchange Act of 1934
and includes all shares as to which the Substantial Shareholder in question has
sole or shared voting or investment power. However, for purposes of Article
Fifth, a Substantial Shareholder is also deemed to own beneficially shares
owned, directly or indirectly, by an "affiliate" or "associate" of the
Substantial

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Shareholder, as well as (i) shares which it or any such "affiliate" or
"associate" has a right to acquire, (ii) shares issuable upon the exercise of
options or rights, or upon conversion of convertible securities, held by the
Substantial Shareholder and (iii) shares beneficially owned by any other person
with whom the Substantial Shareholder or any of his "affiliates" or
"associates" acts as a partnership, syndicate or other group pursuant to any
agreement, arrangement or understanding for the purpose of acquiring, holding,
voting or disposing of shares of capital stock of HHC.

A "business combination" subject to Article Fifth includes, but is not
limited to, the following: a merger or consolidation involving HHC or any of
its subsidiaries and a Substantial Shareholder; a sale, lease or other
disposition of a "substantial part" of the assets of HHC or any of its
subsidiaries (i.e., assets constituting in excess of 10 percent of the book
value of the total consolidated assets of HHC) to a Substantial Shareholder; an
issuance of equity securities of HHC or any of its subsidiaries to a
Substantial Shareholder for consideration aggregating $5 million or more; a
liquidation or dissolution of HHC; and a reclassification or recapitalization
of securities of HHC or any of its subsidiaries or a reorganization, in any
case having the effect, directly or indirectly, of increasing the percentage
interest of a Substantial Shareholder in any class of equity securities of HHC
or such subsidiary.

Article Fifth may not be amended or repealed without the affirmative vote
of 80 percent or more of the votes entitled to be cast by all holders of voting
shares (which 80 percent vote must also include the affirmative vote of a
majority of the votes entitled to be cast by all holders of voting shares not
beneficially owned by any Substantial Stockholder).

The supermajority voting provisions embodied in Article Fifth may have the
effect of discouraging any takeover or change in control of HHC. If the
holders of a majority of HHC's outstanding common stock desire a takeover or
change in control, and if such takeover or change in control is opposed by HHC
management, the existing Articles of Incorporation of HHC possibly could be
used to thwart the desires of such majority.

Article Fourth of the Articles provides that the number of directors which
shall constitute the whole Board of Directors shall be fixed from time to time
by Bylaw adopted by a majority of the Board of Directors (but in no event less
than nine). This provision enables the Board of Directors to increase the size
of the Board during the period between annual meetings of stockholders to
accommodate the inclusion of persons it concludes would be valuable additions
to the Board. It also enables the Board to decrease the number of
directorships in order to respond to circumstances under which the Board deems
a lower number of directors to be desirable, such as when a director
unexpectedly dies or resigns and a qualified candidate to replace the departing
director is not immediately available. It should be noted that, under the
Mississippi BCA, the Board may only increase or decrease by 80 percent or less
the number of directors last approved by the stockholders; the stockholders
must approve any proposal by the Board to increase or decrease by more than 30
percent the number of directors last approved by the stockholders.

Article Fourth may not be amended or repealed without the approval of the
holders of 2/3 of the outstanding Common Stock.

These provisions may have the effect of making it more difficult for
stockholders to replace or add directors, or to otherwise influence actions
taken by directors, which may discourage attempts to acquire control of HHC
which may (or may not) be in the best interest of the majority of the
stockholders.

ADDITIONAL INFORMATION

Additional information concerning HHC's business, and information
concerning the principal holders of HHC Common Stock, the directors and
executive officers of HHC, executive compensation, and certain relationships
and related transactions is contained in the Annual Report on Form 10-K of HHC
for the year ended December 31, 1995 (the "HHC 10- K"), in the Joint Proxy
Statement for the February 22, 1996 Annual Meeting of Shareholders of HHC
(incorporated into the HHC 10-K by reference), and the Form 10-Q of HHC for the
quarter ended June 30, 1996. All of such information is hereby incorporated
into this Prospectus/Joint Proxy Statement by reference. See "DOCUMENTS
INCORPORATED BY REFERENCE."

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DESCRIPTION OF HHC CAPITAL STOCK

AUTHORIZED AND OUTSTANDING STOCK

The Articles of Incorporation as amended (the "Articles") of HHC authorize
the issuance of 20,000,000 shares of Common Stock having a par value of 3.33
per share. As of the date of this Prospectus/Joint Proxy Statement, there were
9,021,901 shares of common stock outstanding.

VOTING RIGHTS

The Holders of HHC Common Stock are each entitled to one vote per share on
all matters brought before shareholders.

DIVIDEND RIGHTS

The holders of Common Stock are entitled to receive such dividends as may
be declared, from time to time, by the Board of Directors out of funds legally
available therefor. Substantially all of the funds available to HHC for
payment of dividends on the Common Stock are derived from dividends paid by its
subsidiaries. The payment of dividends by HHC is subject to the restrictions of
Mississippi law applicable to the declaration of dividends by a business
corporation. Under such provisions, no distribution may be made if, after
giving it effect (1) HHC would not be able to pay its debts as they become due
in the usual course of business; or (2) HHC's total assets would be less than
the sum of its total liabilities plus the amount that would be needed, if HHC
were to be dissolved at the time of the distribution, to satisfy the
preferential rights upon dissolution of stockholders whose preferential rights
are superior to those receiving the distributions.

Additionally, the Federal Reserve, in its Policy Statement on Cash
Dividends Not Fully Covered by Earnings, has stated that bank holding companies
should not pay dividends except out of current earnings and unless the
prospective rate of earnings retention by the holding company appears
consistent with its capital needs, asset quality and overall financial
condition.

PREEMPTIVE RIGHTS

The holders of HHC Common Stock do not have any preemptive or preferential
right to purchase or to subscribe for any additional shares of Common Stock
that may be issued.

FULLY PAID AND NONASSESSABLE

The shares of HHC Common Stock presently outstanding are, and those shares
of HHC Common Stock to be issued in connection with the Mergers will be when
issued, fully paid and nonassessable. Such shares do not have any redemption
provisions.

LIQUIDATION RIGHTS

In the event of liquidation, dissolution or winding-up of HHC, whether
voluntary or involuntary, the holders of HHC Common Stock will be entitled to
share ratably in any of the net assets or funds which are available for
distribution to stockholders after the satisfaction of all liabilities or after
adequate provision is made therefor and after payment of any preferences on
liquidation of preferred stock, if any.

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LIMITATION OF LIABILITY OF DIRECTORS

The HHC Articles provide that a director shall not be liable to HHC or its
shareholders for money damages for any action taken, or any failure to take any
action, as a director, except liability for: (i) the amount of financial
benefit received by a director to which he is not entitled; (ii) an
international infliction of harm on HHC or its shareholders; (iii) a violation
of Mississippi Code Annotated Section 79-4-8.33 (1972), as amended; or (iv) an
intentional violation of criminal law.

INDEMNIFICATION OF DIRECTORS, OFFICERS AND EMPLOYEES

HHC's Articles provide for indemnification of officers, directors and
employees in connection with a proceeding including reasonable expenses
(attorney's fees) to the fullest extent permitted by the MBCA in effect from
time to time and also provide for indemnification against liability to HHC,
liability for improperly receiving a personal benefit and/or liability for any
other reason, provided that such person's conduct did not constitute gross
negligence or wilful misconduct as determined by a board of directors or
committee designated by the board, by special legal counsel, by the
shareholders or by a court.

The HHC Articles also provide for advances to persons for reasonable
expenses if the person furnishes a written undertaking to repay the advance if
these actions are adjudged to be grossly negligent or wilful misconduct and a
determination is made that the facts known would not preclude indemnification.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers or persons controlling HHC
pursuant to the foregoing provisions, HHC has been informed that in the opinion
of the Commission such indemnification is against public policy as expressed in
the Securities Act and is therefore unenforceable.

TRANSFER AGENT

The registered transfer agent and registrar for HHC Common Stock is Hancock
Bank MS, Gulfport, Mississippi.

CHANGES IN CONTROL

See "CERTAIN INFORMATION CONCERNING HHC -- Changes in Control."

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COMPARISON RIGHTS OF SHAREHOLDERS

If the shareholders of Bank and CBI approve the Merger Agreement and the
Bank Merger is subsequently consummated, all shareholders of Bank and CBI other
than those exercising dissenter's rights, will become shareholders of HHC. The
rights of shareholders of Bank and CBI who receive HHC Common Stock in
connection with the Mergers will each be governed by the Articles of
Incorporation, as amended, and Bylaws, as amended, of HHC, rather than the
Articles of Incorporation and Bylaws of Bank and CBI, respectively. The rights
of HHC's shareholders are governed by the Articles of Incorporation of HHC, the
Bylaws of HHC and the laws of the State of Mississippi. The rights of Bank's
shareholders are governed by the Articles of Incorporation of Bank, the Bylaws
of Bank and the laws of the State of Louisiana, including the Louisiana Banking
Laws. The rights of CBI's shareholders are governed by the Articles of
Incorporation of CBI, the Bylaws of CBI and the laws of the State of Louisiana,
including the Louisiana Business Corporation Law. The following is a brief
summary of the principal differences between the rights of shareholders of HHC
and the shareholders of Bank and CBI. This summary is qualified in its
entirety by reference to the Articles of Incorporation and Bylaws of HHC; the
Articles of Incorporation and Bylaws of Bank; and the Articles of Incorporation
of CBI and Bylaws of CBI as well as the Louisiana Banking Laws, the Louisiana
Business Corporation Law and the Mississippi Business Corporation Act.

AUTHORIZED CAPITAL

Bank has 80,000 shares of authorized Common Stock having a par value of
$5.00 per share.

CBI has 216,150 shares of authorized Common Stock having a par value of
$5.00 per share.

HHC has 20,000,000 shares of authorized Common Stock having a par value of
$3.33 per share.

BOARD OF DIRECTORS

The Board of Directors of Bank may be composed of not more than fifteen
members and not less than five members. A majority of the directors must be
citizens and domiciliaries of Louisiana. Consistent with Louisiana Banking
Laws, the Articles provide that each director shall own, in his own right,
unpledged shares of the capital stock of Bank of at least the par value of Five
Hundred Dollars. Any director who, after his election as such, ceases to own
stock with a par value of Five Hundred Dollars shall ipso facto cease to be a
director. The Bank Board currently consists of twelve members. The directors
of Bank are elected each year at the annual meeting of the shareholders.

The Board of Directors of CBI may be composed of such number of persons
determined by resolution of the CBI Board of Directors or by the shareholders
but can never be less than one. No director need be a shareholder, a resident
of the State of Louisiana, or a citizen of the United States. CBI's Board of
Directors currently consists of twelve members. The directors of CBI are
elected for one year terms of office each year or until their successors are
chosen and qualified.

The Board of Directors of HHC may consist of not less than nine persons, as
set from time to time by the Board of Directors, and currently consists of nine
members. The HHC Board of Directors is divided into three classes, as nearly
equal in number as possible, with members of each class to serve for three
years and with one class being elected each year.

The Bylaws of Bank provide that a majority of the directors constitutes a
quorum at any meeting, but a lesser number may adjourn any meeting, from time
to time, and the meeting may be held, as adjourned, without further notice, if
a quorum is present. The Bylaws of Bank provide that the Board of Directors
may fix the compensation of directors, including the compensation of those
directors serving on a committee.

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At all meetings of the Board of Directors of CBI, a majority of the
directors constitutes a quorum for the transaction of business. By resolution
of the CBI Board of Directors, those persons serving as directors may be
compensated a fixed sum and expenses of attendance, if any, for attending board
meetings or they may receive a stated salary.

Except as provided otherwise in the Articles of Incorporation of HHC, a
majority of the number of directors that constitutes the whole Board of
Directors constitutes a quorum for the transaction of business at any meeting
of the Board of Directors. If a quorum is present when a vote is taken, the
affirmative vote of a majority of directors present shall be the act of the
Board of Directors. The Bylaws of HHC provide that the Board of Directors may
fix the compensation of directors, including for serving on committees.

REMOVAL OF DIRECTORS

Louisiana Banking Laws provide that the stockholders of a Louisiana bank
holding a majority of the total voting power at any special meeting called for
that purpose may remove a director of the bank, notwithstanding that the term
of office has not expired. The shareholders may also elect a successor at this
special meeting. The Bylaws of CBI provide that at any meeting of
shareholders called expressly for that purpose, any director or the entire
Board of Directors of CBI may be removed, with or without cause, by a vote of
the holders a majority of the shares then entitled to vote in the election of
directors. A director of HHC may be removed from office only for cause, by
the affirmative vote of a majority of directors present.

VACANCIES IN THE BOARD OF DIRECTORS

The Bylaws of Bank provide that when any vacancy occurs on the Board of
Directors, the remaining members of the Board shall promptly elect a director
to fill the vacancy at any regular meeting of the Board, or at a special joint
meeting called for that purpose. Moreover, the Articles of Incorporation of
Bank provide that a director elected to fill a vacancy shall hold office until
the next regular election, or until his, or their successors, shall be elected
and qualified.

The Bylaws of CBI provide that any vacancy occurring on the Board of
Directors (by death, resignation, removal, or otherwise) may be filled by the
affirmative vote of a majority of the remaining directors, though less than a
quorum of the Board of Directors. A director elected to fill a vacancy serves
the unexpired term of his predecessor in office. In case of any increase in
the number of directors constituting the entire Board of Directors, the
additional directors are to be elected at a meeting of shareholders.

The Bylaws of HHC provide that vacancies occurring on the Board of
Directors for any reason must be filled only by vote of a majority of the
remaining members of the Board of Directors, although less than a quorum. The
person filling the vacancy must serve out the remainder of the term of the
vacated directorship or, in case the vacancy results from an increase in the
number of directors, the term designated for the class of directors of which
the directorship is a part.

AMENDMENT OF THE ARTICLES OF INCORPORATION

Consistent with the Louisiana Banking Laws, the Articles of Incorporation
of Bank may be modified, altered or changed by a vote of two-thirds of all
outstanding stock, represented, present and voted at a general meeting of the
stockholders, convened and held for such purpose. The Articles of
Incorporation further provide that the meeting can be held after thirty (30)
days notice by publications in a newspaper in the Parish of Tangipahoa,
Louisiana, and a written notice duly mailed to every shareholder of record at
his or her last known address. Such meeting or meetings may be called by the
Board of Directors, and must be called upon the written request of shareholders
holding a majority of the entire capital stock of the corporation. Pursuant to
Louisiana Business Corporation Law, the Articles of Incorporation of CBI may be
amended by two-thirds (2/3) of the voting power present. Louisiana Banking
Laws require that prior to the adoption of the amendment, the proposed
amendment shall be submitted to the Commissioner of Financial

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Institutions (the "Commissioner") for his approval. No proposed amendments or
restatement is valid unless a letter of approval has been issued by the
Commissioner.

The affirmative vote of the holders of a majority of votes entitled to be
cast at a shareholders meeting is required to amend any provision of the HHC
Articles of Incorporation unless the amendment would amend the Articles
relating to certain changes in control, in which case eighty percent (80%) or
more of the votes entitled to be cast is required or unless the amendment would
amend the Articles relating to size, composition and removal of the HHC Board
of Directors, in which case the approval of the holders of not less than
two-thirds (2/3) of the outstanding shares of common stock is required.

AMENDMENT OF BYLAWS

The Bylaws of Bank may be amended or repealed at any meeting of the Board
of Directors by a vote of a majority of the whole numbers of directors,
provided that each member has been informed personally or by mail, of the
intention to amend or repeal.

The Bylaws of CBI provide that the power and authority to alter, amend or
repeal the Bylaws or to adopt new Bylaws are concurrently vested in the Board
of Directors and the shareholders, subject to the right of the shareholders to
repeal the authority of the Board of Directors to alter, amend, or repeal the
Bylaws or to adopt new Bylaws.

Although certain provisions of HHC's Bylaws relating to changes in control
and the size, composition and removal of the HHC Board of Directors require a
vote of eighty percent (80%) of the total voting power and a vote of two-thirds
(2/3) of the outstanding common stock, respectively, the remaining provisions
of HHC's Bylaws may be amended or repealed by the Board of Directors, if a
quorum is present, by the affirmative vote of majority of directors present or
by the shareholders if a quorum exists and the votes cast favoring the action
exceed the votes cast opposing the action.

SPECIAL JOINT MEETINGS OF SHAREHOLDERS

Under the Articles of Incorporation of Bank, a special joint meeting may be
called in the manner provided for by the Bylaws of Bank and such business may
be brought before such special joint meetings as the Bylaws permit. The
Bylaws of Bank provide that special joint meetings and annual meetings are to
be called and held in the manner set forth in the Articles of Incorporation.
The Articles of Incorporation of Bank provide that notice of annual meetings is
to be given to the shareholders as required by law, both by publication in a
newspaper of the Parish of Tangipahoa, Louisiana, and by written notice
properly addressed and mailed to every shareholder of record at his last known
address. Notice of such meeting is to be mailed by the Cashier of Bank.
Pursuant to Louisiana Banking Laws, a special meeting of shareholders may be
called at any time by the president, the board of directors, or upon the
written request of a shareholder or shareholders holding in the aggregate
one-fifth (or such lesser or greater proportion as may be fixed in the articles
or bylaws) of the total voting power.

Under CBI's Bylaws, a special joint meeting of the shareholders may be
called at any time by the President, the Board of Directors, or the holders of
not less than ten percent of all shares entitled to vote at such meeting. Only
the business stated or indicated in the notice of the special joint meeting can
be transacted at a special joint meeting of the shareholders.

Under HHC's Bylaws, a special joint meeting of the shareholders may be
called, for any purpose or purposes, unless otherwise prescribed by statute, by
the President or by the Board of Directors, and shall be called by the
President at the request of the holders of not less than one-tenth of all the
votes entitled to be cast on any issue proposed to be considered at the
meeting. A request for a special joint meeting must be signed and dated by the
shareholder(s) requesting the special joint meeting and must state the purpose
of the meeting, and be delivered to the Corporation's Secretary. Business
transacted at a special joint meeting of the shareholders is confined to the
purpose(s) stated in the notice.

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PREEMPTIVE RIGHTS

Neither the holders of Bank Common Stock nor the holders of HHC Common
Stock have any preemptive or preferential right to purchase or to subscribe
for any additional shares of Bank Common Stock or HHC Common Stock,
respectively, that may be issued. The Articles of Incorporation of CBI grant
preemptive rights to holders of its Common Stock to purchase or subscribe to
any unissued shares of common stock of CBI or any right to subscription to or
to receive, or any warrant or option of the purchase of, any of the foregoing
securities that may be sold by CBI.

REPORTS TO SHAREHOLDERS

The HHC Common Stock is registered under the Exchange Act, and, therefore,
HHC is required to provide annual reports containing audited financial
statements to shareholders and to file such other reports with the SEC and
solicit proxies in accordance with the rules of the SEC. HHC also provides
reports to its shareholders on an interim basis containing unaudited financial
information. Neither Bank Common Stock nor CBI Common Stock is registered under
the Exchange Act. Bank and CBI do not provide their shareholders with annual
reports containing audited financial statements of Bank and CBI.

DIVIDENDS

The Louisiana Banking Laws provide that the Board of Directors of a
Louisiana bank may quarterly, semiannually, or annually declare dividends on
its stock by complying with the Louisiana Banking Laws and the Articles of
Incorporation and Bylaws of the bank. No dividends may be declared or paid
unless the bank has unimpaired surplus equal to fifty percent of the
outstanding capital stock of the bank. The bank's unimpaired surplus cannot be
reduced below fifty percent by the payment of the dividend. Prior approval of
the Commissioner may be required if the total of all dividends declared and
paid by the state bank during any one year would exceed the total of its net
profits of that year combined with the net profits from the immediately
preceding year.

The sources of funds for payments of dividends by CBI and HHC are their
subsidiaries. Because the primary subsidiaries of CBI and HHC are financial
institutions, payments made by such subsidiaries of CBI and HHC to their
shareholders are limited by law and regulations of the bank regulatory
authorities.

The Louisiana Business Corporation Law provides that a board of directors
may declare dividends in cash, property or shares out of surplus (except earned
surplus reserved by the board) except: (1) when the corporation is insolvent
or would thereby become insolvent, or (2) when such would be contrary to
restrictions in the corporation's Articles of incorporation. If no surplus is
available, dividends may be paid out of net profits for current or preceding
fiscal years, under certain restrictions. No dividend may be paid in shares
other than with treasury shares without transfer to stated capital from surplus
of (1) an amount not less than the aggregate par value of shares issued, and
(2) an amount determined by directors in respect to no par shares issued. The
Mississippi Business Corporation Act provides that no distribution, including
dividend distributions, may be made if, after giving it effect the corporation
would not be able to pay its debts as they become due in the usual course of
business, or the corporation's total assets would be less than the sum of its
total liabilities plus the amount that would be needed, if the corporation were
to be dissolved at the time of the distribution, to satisfy the preferential
rights upon dissolution of shareholders who have superior preferential rights
upon dissolution.

VOTING RIGHTS

The holders of shares of Bank Common Stock, the holders of shares of CBI
Common Stock and the holders of HHC Common Stock are each entitled to one vote
per share on all matters brought before the shareholders.

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REDEMPTION AND RETIREMENT

A Louisiana state bank may reduce its capital stock only in conformity with
the written permission of the Commissioner.

A Louisiana Corporation cannot purchase or redeem its shares when it is
insolvent, or at a price, in the case of shares subject to redemption,
exceeding the redemption price thereof, or when its net assets are less than,
or such purchase would reduce its net assets below, the aggregate amount
payable on liquidation upon any issued shares having a preferential right to
participate in the assets in the event of liquidation which remain after the
purchase or redemption and cancellation of any shares in connection with the
purchase or redemption.

CBI is authorized by its Articles to repurchase its own shares to the
extent of the aggregate of unrestricted capital surplus and unrestricted
reduction surplus available therefore, without submitting such purchase to a
vote of the shareholders of CBI.

Under Mississippi law, a corporation is permitted to purchase or redeem
shares of its own Stock except where upon doing so, the corporation would not
be able to pay its debts as they become due in the usual course of business.
This prohibition also applies to where the corporation's total assets would be
less than the sum of the corporation's total liabilities, plus, unless the
Articles of incorporation permit otherwise, the amount that would be needed to
satisfy the preferential rights upon dissolution of stockholders whose
preferential rights are superior to those whose shares are purchased or
redeemed, if the corporation were to be dissolved at the time of such purchase
or redemption. Mississippi law permits a Board of Directors to base its
determination as to whether such purchase or redemption is prohibited either on
financial statements prepared on the basis of accounting practices and
principles that are reasonable in the circumstances or on a fair valuation or
other method that is reasonable under the circumstances.

STOCKHOLDERS' INSPECTION RIGHTS

Under the Louisiana Banking Laws, every shareholder (or combination of two
or more shareholders), except a business competitor of the state bank, who has
been the holder of record of at least two percent of all outstanding shares of
a state bank for at least six months has the right to examine, in person or by
agent or attorney, at any reasonable time and for any proper and reasonable
purpose, books showing the amount of common stock subscribed, the names and
residences of owners of shares, the amount of stock owned by each of them, the
amount of said stock paid by whom, the last transfer of said stock with the
date of transfer, the names and residences of its officers, the records of
proceedings of shareholders, of the directors, and of the committees of the
board, and the articles of incorporation and bylaws of the bank. Every
shareholder (or combination of two or more shareholders), except a business
competitor of the state bank, who has been a holder of record of at least
twenty-five percent of all of the outstanding shares of the bank for at least
six months shall have the right to examine in person, by agent, or attorney, at
any reasonable time and for any proper and reasonable purpose, any and all of
the books and records of the bank, except files relating to credit information,
loan transaction, and deposit accounts of individual customers of the bank,
which are confidential and not subject to shareholder inspection.

Under the Louisiana Business Corporation Law, upon at least five days'
written notice, any shareholder, except a business competitor, who is and has
been the holder of record of at least five percent of the outstanding shares of
any class of a corporation for at least six months has the right to examine, in
person or by agent or attorney, at any reasonable time, for any proper and
reasonable purpose, any and all of the records and accounts of the corporation
and to make extracts therefrom. Louisiana law allows two or more shareholders,
each of whom has been a holder of record for six months, whose aggregate
holdings equal five percent to inspect the records.

58
<PAGE> 70
Under the Mississippi Business Corporation Act, any shareholder may inspect
the shareholders' list if the demand is made in good faith and for a proper
purpose. Such shareholder must describe his purpose and establish that the
list is directly connected to his purpose. Moreover, the stockholders' list
must be available for inspection by any shareholder beginning two days after
notice of a shareholder's meeting is given and continuing until the meeting
takes place.

LIMITATION OF LIABILITY OF DIRECTORS

Neither CBI nor the Bank's Articles and Bylaws have provisions limiting the
liability of its directors.

INDEMNIFICATION

The Louisiana Banking Laws permit a state bank to indemnify a director,
officer, employee or agent if he conducted himself in good faith; reasonably
believed that his conduct was in the best interests of the state bank, or that
the conduct was at least not opposed to the best interests of the state bank.
In the case of a criminal proceeding, the director must show that he has no
reasonable cause to believe his conduct was unlawful. The termination of a
proceeding by judgment, order, settlement, conviction or upon a plea of nolo
contendere or its equivalent is not, of itself, determinative that the director
did not meet the standard of conduct required under the Louisiana Banking Laws.

Unless limited by its articles of incorporation, a state bank may indemnify
a director or officer who was wholly successful, on the merits or otherwise, in
the defense or any proceeding to which he was a party because he is or was a
director, officer, employee or agent of the state bank against reasonable
expenses incurred by him in connection with the proceeding. A state bank may
pay for or reimburse the reasonable expenses incurred by a director, officer,
employee or agent who is a party to a proceeding prior to a final disposition
of the proceeding upon the party furnishing a written affirmation of his good
faith belief that he has meet the required standard of conduct and a written
undertaking to repay the advance if it is ultimately determined that he did not
meet the standard of conduct. The undertaking need not be secured and may be
accepted without reference to financial ability to make repayment.

A state bank may not indemnify a director unless authorized in the specific
case after a determination has been made that the indemnification of the
director is permissible in the circumstances because he has met the required
standard of conduct. The determination may be made by a majority vote of a
quorum consisting of director not parties to the proceeding. If such quorum
cannot be obtained, the determination may be made by majority vote of a
committee duly designated by the board (in which directors who are parties may
participate), consisting solely of two or more directors not at the time
parties to the proceeding or by a special legal counsel selected by the board
or the directors or by the shareholders. Shares held by directors who are
parties may not be voted on the determination.

The Bank Articles have no specific indemnification provisions.

The Louisiana Business Corporation Law permits and the CBI Articles provide
that CBI may indemnify any person who is or was a party or is threatened to be
made a party to any action, suit, proceeding, whether civil, criminal,
administrative, or investigative. This includes any action by or in the right
of the corporation (a

59
<PAGE> 71
"derivative action"), by reason of fact that he is or was a director, officer,
employee, or agent of the corporation, or is or was serving at the request of
the corporation as a director, officer, employee, or agent, against expenses
(including attorney's fees), judgments, fines, and amounts paid in settlement
actually and reasonably incurred in connection with such action, suit, or
proceeding if the director acted in good faith and in a manner he reasonably
believed to be in, or not opposed to, the best interests of the corporation.
With respect to any criminal action or proceeding, the director must show that
he or she had no reasonable cause to believe his or her conduct was unlawful.

In the case of derivative actions, Louisiana Business Corporation Law and
the CBI Articles limit the indemnity to expenses (including attorney's fees)
and amounts paid in settlement not exceeding, in the judgment of the Board of
Directors, the estimated expense of litigating the action to conclusion,
actually and reasonably incurred in connection with the defense or settlement
of such action.

The CBI Articles provide that no indemnification may be made to a person
who has been found liable to the CBI for negligence or misconduct in the
performance of his duty to CBI.

The Mississippi Business Corporation Act (the "MBCA") provides that a
director, officer or agent of a corporation may be indemnified for such service
if he conducted himself in good faith, and he reasonably believed in the case
of conduct in his official capacity with the corporation, that his conduct was
in the corporation's best interests; and in all other cases that his conduct
was at least not opposed to the corporation's best interests. In the case of a
criminal proceeding, a director must show that he had no reasonable cause to
believe his conduct was unlawful. Indemnification permitted under this section
in connection with a derivative action is limited to reasonable expenses
incurred in connection with the proceeding.

The MBCA further authorizes a corporation to make further indemnity for
actions that do not constitute gross negligence or wilful misconduct if
authorized by the corporation's Articles of Incorporation. The HHC Articles
provide for indemnification to the fullest extent permitted by the MBCA and
specifically provide for the further indemnity authorized by the MBCA.

Under both Louisiana Business Corporation Law and Mississippi law, the
corporation may pay, prior to final disposition, the expenses (including
attorneys' fees) incurred by a director or officer in defending a proceeding.
Under Louisiana and Mississippi law, expenses incurred by an officer or
director in defending any action may be advanced prior to final disposition
upon receipt of an undertaking by the director or officer of the corporation to
repay such advances if it is ultimately determined that he is not entitled to
indemnification. Under Mississippi law, however, a determination must be made
that the facts known to those making the determination would not preclude
indemnification. Neither Louisiana law nor Mississippi law require the
undertaking to be secured and the undertaking may be accepted without reference
to financial ability to make the repayment. The HCC Articles however, provide
that the request does not need to be accompanied by the affirmation otherwise
required by the MBCA.

SUPERMAJORITY VOTING REQUIREMENTS; BUSINESS COMBINATIONS

Neither CBI nor Bank's Articles and Bylaws have supermajority voting
requirements for business combinations or other matters.

60
<PAGE> 72
HHC's Articles contain provisions rearding the vote required to approve
certain business combinations or other significant corporate transactions
involving HHC and a substantial stockholder. Mississippi law generally
requires the affirmative vote of the holders of a majority of shares entitled
to vote at a meeting to approve a merger, consolidation or dissolution of HHC
or a disposition of all or substantially all of HHC's assets. The Articles
require the affirmative vote of 80 percent of the total number of votes
entitled to be cast to approve these and other significant corporate
transactions ("business combinations") if a "Substantial Stockholder" (as
defined) is a party to the transaction or its percentage equity interest in HHC
will be increased by the transaction. A majority of the "Continuing Directors"
(as defined) of the Board of Directors may, in all such cases, determine not to
require such 80 percent affirmative vote. The required 80 percent approval of
any such business combination includes all votes entitled to be cast with
respect to voting shares not beneficially owned by any Substantial Stockholder.
In addition, such 80 percent affirmative vote will not be required if certain
price criteria and procedural requirements are satisfied. See "CERTAIN
INFORMATION CONCERNING HHC -- Changes in Control" and "DESCRIPTION OF HHC
CAPITAL STOCK -- Changes in Control" for a fuller discussion of this provision
and for definitions of such terms.

APPRAISAL RIGHTS

The LBCL provides appraisal rights to shareholders in connection with
mergers and consolidations and the sale, lease or exchange of all of the
corporation's assets, if such are approved by less than eighty percent (80%) of
a corporation's total voting power. Appraisal rights are not available under
theLBCL in the case of: (1) a sale pursuant to a court order; (2) a sale for
cash requiring distribution of all or substantially all of the net proceeds to
shareholders in accordance with their respective interests within one (1) year
of the date of the sale; and (3) shareholders holding shares of any class of
stock which, at the record date fixed to determine shareholders entitled to
receive notice of and to vote at the meeting of shareholders at which a merger
or consolidation was acted on, were listed on a national securities exchange
unless the shares of such shareholders were not converted by the merger or
consolidation solely into shares of the surviving or new corporation.

The MBCA provides appraisal rights to shareholders in any of the following
corporate actions: (1) a merger if shareholder approval is required or if the
corporation is a subsidiary that merges with its parent; (2) a plan of share
exchange if the corporation is being acquired and the shareholder is entitled
to vote; and (3) a sale or exchange of all or substantially all of the property
of the corporation that is not in the usual and regular course of business, but
not including a court ordered sale or sale pursuant to a plan where the
shareholders will receive the proceeds within one (1) year after the date of
sale.

LEGAL MATTERS

Certain legal matters in connection with the HHC Common Stock being offered
hereby will be passed upon by Watkins Ludlam & Stennis, P.A., 633 North State
Street, Jackson, Mississippi, counsel for HHC.

EXPERTS

The consolidated financial statements of CBI as of and for the years ended
December 31, 1995 and 1994 contained in this Prospectus/Joint Proxy Statement
have been audited by Taylor, Powell, Wilson & Hartford, P.A., independent
auditors, as set forth in their report with respect thereon appearing elsewhere
herein, and have been included in reliance upon the authority of such firm as
experts in accounting and auditing.

The consolidated financial statements of HHC incorporated in this
Prospectus/Joint Proxy Statement by reference from the HHC Annual Report on
Form 10-K have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their report, which is incorporated herein by reference and have been
so incorporated in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.

61
<PAGE> 73
OTHER MATTERS

At the time of the preparation of this Prospectus/Joint Proxy Statement,
neither CBI nor Bank had been informed of any matters to be presented by or on
behalf of CBI, Bank or their management for action at the Special Joint Meeting
other than those listed in the Notice of Special Joint Meeting of Shareholders
and referred to herein. If any other matters come before the meeting or any
adjournment thereof, the persons named in the enclosed proxy will vote on such
matters according to their best judgment.

Shareholders are urged to sign the enclosed proxy, which is solicited on
behalf of the Board of Directors of CBI and Bank, respectively, and return it
at once in the enclosed envelope.

62
<PAGE> 74
INDEX TO CBI FINANCIAL STATEMENTS

Unaudited Condensed Consolidated Financial Statements - Six Months Ended June
30, 1996 and 1995

<TABLE>
<S> <C>
Condensed Consolidated Statements of Condition . . . . . . . . . . . F-2

Condensed Consolidated Statements of Income . . . . . . . . . . . . F-3

Condensed Consolidated Statements of Cash Flows . . . . . . . . . . F-4

Notes to Condensed Consolidated Financial Statements . . . . . . . . F-5

Audited Consolidated Financial Statements - Years Ended December 31, 1995
and 1994

Report of Independent Auditors . . . . . . . . . . . . . . . . . . . F-6

Consolidated Statements of Condition . . . . . . . . . . . . . . . . F-7

Consolidated Statements of Income . . . . . . . . . . . . . . . . . F-8

Consolidated Statements of Changes in Shareholders' Equity . . . . . F-9

Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . F-10

Notes to Consolidated Financial Statements . . . . . . . . . . . . . F-12
</TABLE>

F-1
<PAGE> 75
COMMUNITY BANCSHARES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION
(UNAUDITED)
(AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
June 30, December 31,
1996 1995*
---------------- -------------------
<S> <C> <C>
ASSETS:
Cash and due from banks (non-interest
bearing) $ 6,121 $ 6,921
Federal funds sold 3,450 10,575
Held to maturity securities (market
value of $42,682, $39,275 and
$39,631) 43,078 38,930
Loans, net of unearned income 36,342 34,890
Less: Allowance for loan losses -475 -459
---------------- -------------------

Net loans 35,867 34,431
Property & equipment, net 1,423 1,512
Other real estate 213 227
Accrued interest receivable 849 766
Other assets 135 122
---------------- -------------------

Total assets $ 91,136 $ 93,484
================ ===================

LIABILITIES & STOCKHOLDERS' EQUITY:
Liabilities:
Deposits:
Non-interest bearing demand $ 15,132 $ 12,350
Interest bearing savings, NOW,
money market & other time 64,288 69,900
---------------- -------------------

Total deposits 79,420 82,250
Other liabilities 905 849
---------------- -------------------

Total liabilities 80,325 83,199
---------------- -------------------

Stockholder's equity:
Common stock 437 437
Surplus 2,664 2,664
Retained earnings 7,710 7,284
---------------- -------------------

Total stockholders' equity 10,811 10,385
---------------- -------------------

Total liabilities &
stockholders' equity $ 91,136 $ 93,484
================ ===================
</TABLE>

* The above Statement of Condition at December 31, 1995 has been taken from the
audited financial statements at that date and condensed.

See Notes to condensed Consolidated Financial Statements.

F-2
<PAGE> 76
COMMUNITY BANCSHARES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(AMOUNTS IN THOUSANDS EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
Six Months Ended June 30,
------------------------------------------
1996 1995
-------------------- -------------------
<S> <C> <C>
INTEREST INCOME:
Interest and fees on loans $ 1,629 $ 1,431
Interest on investment activities:
U.S. Treasury securities and obligations of
U.S. government agencies 1,202 1,210
Obligations of states and political subdivisions 103 93
Interest on Federal funds sold 124 70
-------------------- -------------------
Total 3,058 2,804
-------------------- -------------------

INTEREST EXPENSE:
Interest on deposits 1,442 1,239
Interest on Federal funds purchased 0 7
-------------------- -------------------
Total 1,442 1,246
-------------------- -------------------

NET INTEREST INCOME 1,616 1,558

PROVISION FOR LOAN LOSSES 20 0
-------------------- -------------------

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 1,596 1,558

OTHER OPERATING INCOME:
Service fees 415 334
Recovery of previously charged down securities 65 0
Other operating income 115 75
-------------------- -------------------
Total 595 409
-------------------- -------------------

OTHER OPERATING EXPENSES:
Salaries and employee benefits 690 736
Occupancy and equipment expense 283 276
Other operating expenses 352 503
-------------------- -------------------
Total 1,325 1,515
-------------------- -------------------

INCOME BEFORE INCOME TAXES AND MINORITY INTEREST 866 452

INCOME TAX EXPENSE 275 131
-------------------- -------------------

INCOME BEFORE MINORITY INTEREST 591 321

MINORITY INTEREST IN SUBSIDIARY'S NET INCOME 8 5
-------------------- -------------------

NET INCOME $ 583 $ 316
==================== ===================

NET EARNINGS PER COMMON SHARE $ 6.66 $ 3.61

DIVIDENDS PAID PER COMMON SHARE $ 2.40 $ 2.25

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 87,494 87,494
</TABLE>

See Notes to Condensed Consolidated Financial Statements.

F-3
<PAGE> 77
COMMUNITY BANCSHARES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
Six Months Ended June 30,
------------------------------------------
1996 1995
-------------------- -------------------
<S> <C> <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 637 $ 553

INVESTING ACTIVITIES:
Proceeds from maturities of held-to-maturity
securities 5,890 4,388
Purchase of held to maturity securities -10,002
Net increase in loans -1,455 -3,043
Purchase of bank premises and equipment -4 -68
-------------------- -------------------

Net cash provided, (-)used by
investing activities -5,571 1,277
-------------------- -------------------

FINANCING ACTIVITIES:
Net increase, decrease(-) in deposits -2,831 -2,088
Cash dividends paid to stockholders -160 -133
-------------------- -------------------

Net cash provided by, used in(-)
financing activities -2,991 -2,221
-------------------- -------------------

NET DECREASE IN CASH AND CASH EQUIVALENTS -7,925 -391

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 17,496 9,150
-------------------- -------------------

CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 9,571 $ 8,759
==================== ===================
</TABLE>

See Notes to Condensed Consolidated Financial Statements.

F-4
<PAGE> 78
COMMUNITY BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
SIX MONTHS ENDED JUNE 30, 1996 AND 1995

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

The accounting principles followed by Community Bancshares, Inc. and Subsidiary
and the methods of applying those principles conform with generally accepted
accounting principles consistently applied and generally practiced within the
banking industry. The significant accounting principles are summarized below.

The consolidated financial statements include the accounts of Community
Bancshares, Inc., and its wholly owned subsidiary, Community State Bank. All
significant intercompany 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
information and 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 expected for
the entire year. For further information, refer to the consolidated financial
statements and notes thereto of Community Bancshares, Inc. and Subsidiary for
the years ended December 31, 1995 and 1994 included elsewhere herein.

PROPOSED MERGER:

On June 19, 1996, Community Bancshares, Inc. and Subsidiary entered into an
Agreement and Plan of Reorganization with Hancock Holding Company and Hancock
Bank of Louisiana, pursuant to which Community Bancshares, Inc. will merge with
and into Hancock Holding Company and Subsidiary will merge with and into
Hancock Bank of Louisiana. The proposed merger is subject to various
conditions, including approval by the shareholders of Community Bancshares,
Inc. and Subsidiary and by certain regulatory agencies. The agreement
contemplates that the shareholders of Community Bancshares, Inc. will receive
approximately $5.4 million in cash and shares of Hancock Holding Company common
stock valued at $16.2 million and the shareholders of Subsidiary (other than
Community Bancshares, Inc.) will receive approximately $80,000 in cash and
$239,000 in Hancock Holding Company common stock, all subject to adjustment
under certain circumstances and provided that holders of 25 or fewer shares of
Community Bancshares, Inc. and/or Subsidiary will receive all cash.

F-5
<PAGE> 79
Taylor, Powell, Wilson & Hartford, P.A.
Certified Public Accountants
Post Office Box 8240
Greenwood, Mississippi 38935
601-453-6432

INDEPENDENT AUDITOR'S REPORT

To the Board of Directors and Stockholders
of Community Bancshares, Inc.

We have audited the consolidated balance sheets of Community Bancshares, Inc.
and its subsidiary as of December 31, 1995 and 1994 and the related
consolidated statements of income, changes in stockholders' equity and cash
flows for the years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the 1995 and 1994 consolidated financial statements referred to
above present fairly, in all material respects, the financial position of
Community Bancshares, Inc. and its subsidiary as of December 31, 1995 and 1994,
and the results of their operations and their cash flows for the years then
ended in conformity with generally accepted accounting principles.

TAYLOR, POWELL, WILSON & HARTFORD, P.A.

January 19, 1996

F-6
<PAGE> 80
COMMUNITY BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1995 AND 1994

<TABLE>
<CAPTION>
ASSETS 1995 1994
----------------- -----------------
<S> <C> <C>
CASH AND DUE FROM BANKS $ 6,920,667 $ 6,549,589

FEDERAL FUNDS SOLD 10,575,000 2,600,000

SECURITIES HELD TO MATURITY
(Market Value $39,274,758 and $42,199,689): 38,930,102 44,060,074

LOANS, NET OF UNEARNED DISCOUNT AND
ALLOWANCE FOR LOAN LOSSES 34,431,581 30,316,083

BANK PREMISES AND EQUIPMENT, NET OF
ACCUMULATED DEPRECIATION 1,512,022 1,633,679

OTHER REAL ESTATE OWNED 227,474 257,188

ACCRUED INTEREST RECEIVABLE 766,023 746,031

OTHER ASSETS 121,848 95,485
----------------- -----------------

Total $ 93,484,717 $ 86,258,129
================= =================

LIABILITIES

DEPOSITS:
Demand deposits $ 11,902,390 $ 10,106,483
NOW and money market deposits 27,062,490 28,887,287
Savings deposits 9,530,695 10,344,231
Time deposits, $100,000 and over 8,787,013 7,079,546
Other time deposits 24,967,941 19,445,075
----------------- -----------------
Total deposits 82,250,529 75,862,622

ACCRUED INTEREST PAYABLE 526,863 260,376

OTHER LIABILITIES 168,869 148,294
----------------- -----------------
Total liabilities 82,946,261 76,271,292

MINORITY INTEREST 153,318 145,314

STOCKHOLDERS' EQUITY:
Common stock - authorized 216,150 shares
of $5 par value; issued and outstanding
87,494 shares in 1995 and 1994 437,470 437,470
Surplus 2,663,679 2,663,679
Retained earnings 7,283,989 6,740,374
----------------- -----------------
Total stockholders' equity 10,385,138 9,841,523
----------------- -----------------

Total $ 93,484,717 $ 86,258,129
================= =================
</TABLE>

See Notes to Consolidated Financial Statements.

F-7
<PAGE> 81
COMMUNITY BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994

<TABLE>
<CAPTION>
1995 1994
----------------- -----------------
<S> <C> <C>
INTEREST INCOME:
Interest and fees on loans $ 3,012,481 $ 2,402,914
Interest on investment activities:
U. S. Treasury securities and
obligations of U. S. government agencies 2,296,489 2,718,292
Obligations of states and political sub-
divisions 170,656 220,403
Interest on Federal funds sold 268,362 136,327
----------------- -----------------
Total 5,747,988 5,477,936
----------------- -----------------

INTEREST EXPENSE:
Interest on deposits 2,602,266 2,113,296
Interest on Federal funds purchased 7,424 4,929
----------------- -----------------
Total 2,609,690 2,118,225
----------------- -----------------

NET INTEREST INCOME 3,138,298 3,359,711

PROVISION FOR LOAN LOSSES 0 0
----------------- -----------------

NET INTEREST INCOME AFTER PROVISION FOR LOAN
LOSSES 3,138,298 3,359,711

OTHER OPERATING INCOME:
Service fees 850,547 667,863
Recovery of previously charged down securities 9,135 179,812
Other operating income 90,020 25,402
----------------- -----------------
Total 949,702 873,077
----------------- -----------------

OTHER OPERATING EXPENSES:
Salaries and employee benefits 1,458,926 1,392,903
Occupancy and equipment expense 576,017 415,259
Other operating expenses 835,487 909,788
----------------- -----------------
Total 2,870,430 2,717,950
----------------- -----------------

INCOME BEFORE INCOME TAXES AND MINORITY INTEREST 1,217,570 1,514,838

INCOME TAX EXPENSE 332,969 458,355
----------------- -----------------

INCOME BEFORE MINORITY INTEREST 884,601 1,056,483

MINORITY INTEREST IN SUBSIDIARY'S NET INCOME 12,883 15,395
----------------- -----------------

NET INCOME $ 871,718 $ 1,041,088
================= =================

NET EARNINGS PER COMMON SHARE $ 9.96 $ 11.90

DIVIDENDS PAID PER COMMON SHARE $ 3.75 $ 3.75

WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING 87,494 87,494
</TABLE>

See Notes to Consolidated Financial Statements.

F-8
<PAGE> 82
COMMUNITY BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994

<TABLE>
<CAPTION>
Common Stock
--------------------- Retained
Shares Amount Surplus Earnings Total
--------- -------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Balance, December
31, 1993 87,494 $437,470 2,663,679 $ 6,027,388 $ 9,128,537

Cash dividends -
$3.75 per common
share -328,102 -328,102

Net income for the
year 1994 1,041,088 1,041,088
--------- -------- --------- ----------- -----------

Balance, December
31, 1994 87,494 437,470 2,663,679 6,740,374 9,841,523

Cash dividends -
$3.75 per common
share -328,103 -328,103

Net income for the
year 1995 871,718 871,718
--------- -------- --------- ----------- -----------

Balance, December
31, 1995 87,494 $437,470 2,663,679 $ 7,283,989 $10,385,138
========= ======== ========= =========== ===========
</TABLE>

See Notes to Consolidated Financial Statements.

F-9
<PAGE> 83
COMMUNITY BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994

<TABLE>
<CAPTION>
1995 1994
----------------- -----------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 871,718 $ 1,041,088
Adjustments to reconcile net income to net cash
provided by operating activities:
Deferred income tax -20,208 -13,635
Depreciation and amortization 202,850 110,365

Provision for losses on other real estate 30,021 35,007
Gain on sales of investment securities
and other real estate owned -12,812 -199,223
Amortization of premiums on investment
securities 66,799 151,320
Increase(-),decrease in accrued interest
receivable -19,992 271,908
Increase(-), decrease in other assets -6,155 -42,406
Increase, decrease(-) in interest payable 266,487 27,966
Increase, decrease(-) in other liabilities 20,575 -71,155
Minority interest in net income of subsi-
diary 12,883 15,395
----------------- -----------------
Net cash provided by operating
activities 1,412,166 1,326,630
----------------- -----------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities and sales of investment
securities 10,626,910 12,487,898
Purchases of investment securities -5,554,602 -10,334,320
Net increase in loans -4,274,949 -5,183,464
Payments received on loans previously charged off 140,995 60,529
Purchase of bank premises and equipment -81,193 -830,982
Proceeds from sales of other real estate 21,826 72,818
----------------- -----------------
Net cash provided by, used in(-)
investing activities 878,987 -3,727,521
----------------- -----------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase, decrease(-) in demand deposits,
NOW accounts, money market accounts and
savings accounts -842,426 1,130,273
Net increase, decrease(-) in time
deposits 7,230,333 -497,770
Cash dividends paid -328,103 -328,102
Cash dividends paid to minority interest
stockholders of subsidiary -4,879 -4,877
----------------- -----------------
Net cash provided by financing
activities 6,054,925 299,524
----------------- -----------------

NET INCREASE, DECREASE (-) IN CASH AND CASH EQUIVALENTS 8,346,078 -2,101,367

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 9,149,589 11,250,956
----------------- -----------------

CASH AND CASH EQUIVALENTS, END OF YEAR $ 17,495,667 $ 9,149,589
================= =================
</TABLE>

See Notes to Consolidated Financial Statements.

F-10
<PAGE> 84
COMMUNITY BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994

Continued

<TABLE>
<CAPTION>
1995 1994
----------------- -----------------
<S> <C> <C>
SUPPLEMENTAL INFORMATION:

Amount paid for interest $ 2,343,203 $ 2,189,380
================= =================

Amount paid for income taxes $ 296,945 $ 560,743
================= =================

NON CASH INVESTING ACTIVITIES:

Loans transferred to other real estate owned $ 18,456 $ 0
================= =================
</TABLE>

See Notes to Consolidated Financial Statements.

F-11
<PAGE> 85
COMMUNITY BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

The accounting and reporting policies of Community Bancshares, Inc.
(Bancshares) and its subsidiary, Community State Bank (Bank) conform to
practices within the banking industry and are based on generally accepted
accounting principles. A summary of the significant accounting policies
consistently applied in the preparation of the accompanying financial
statements are as follows:

Principles of Consolidation - The consolidated financial statements include the
accounts of Bancshares and Bank. All significant intercompany items have been
eliminated in consolidation. As of December 31, 1995, Bancshares owned 98.54%
of the outstanding common stock of the Bank.

Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Securities - Effective January 1, 1994 the Bank adopted the provision of
Statement of Financial Accounting Standards, (SFAS) No. 115 "Accounting for
Certain Investments in Debt and Equity Securities." All Investment Securities
are classified as held to maturity securities. Investment securities are
stated at cost adjusted for accretion of discounts and amortization of
premiums. Gains and losses are recognized when securities are sold using the
specific identification method.

Loans - Loans are stated at the amount of unpaid principal, reduced by an
allowance for loan losses. Interest is calculated by using the simple-interest
method on daily balances of the principal amount outstanding. Accrual of
interest is discontinued on a loan when management believes, after considering
economic and business conditions and collection efforts, that the borrowers'
financial conditions is such that collection of interest is doubtful. Loan
origination fees and certain direct origination costs are immaterial and are
recognized as income when received or expense when paid.

Allowance for Loan Losses - The allowance for loan losses is established
through a provision for loan losses charged to expenses. Loans are charged
against the allowance for loan losses when management believes that the
collectibility of the principal is unlikely. The allowance is an amount that
management believes will be adequate to absorb possible losses on existing
loans that may become uncollectible, based on evaluations of the collectibility
of loans and prior loan loss experience. The evaluations take into
consideration such factors as changes in the nature and volume of the loan
portfolio, overall portfolio quality, review of specific problem loans, and
current economic conditions that may affect the borrowers' ability to pay.

Bank Premises and Equipment - Bank premises and equipment are stated at cost
less accumulated depreciation. Depreciation is provided on the straight-line
and accelerated methods over the estimated useful lives of the respective
assets.

Other Real Estate Owned - Properties acquired through foreclosure or deed taken
in lieu of foreclosure are recorded at the lower of cost or fair value.
Write-downs from cost to fair value at the time of foreclosure are charged to
the allowance for loan losses; subsequent write-downs and gains or losses
recognized on the sale of such properties are included in the consolidated
statement of income.

F-12
<PAGE> 86
COMMUNITY BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)

Income Taxes - Bancshares and Bank file a consolidated tax return for federal
income tax purposes. Federal income taxes are computed for each company as
though the company filed separate income tax returns. The current tax expense
recognized for financial accounting purposes by Bank is remitted to Bancshares.
Bancshares retains the difference between total taxes reflected by Bank, and
the consolidated provision for income taxes.

Provisions for deferred income taxes are made as a result of timing differences
between financial and income tax accounting consisting primarily of differences
in the accounting for the reserve for loan losses and write-downs of other real
estate owned.

Statement of Cash Flows - For purposes of reporting cash flows, cash and cash
equivalents include cash on hand, amounts due from banks and federal funds
sold. Generally, federal funds are purchased and sold for one day periods.

NOTE 2 - SECURITIES HELD TO MATURITY:

The amortized cost and approximate market value of investment securities at
December 31, 1995 and 1994 are summarized as follows:

<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Approximate
December 31, 1995 Cost Gains Losses Market Value
----------------- ----------------- ---------------- --------------- -----------------
<S> <C> <C> <C> <C>

U. S. Treasury securities $ 6,997,860 $ 72,536 $ 11,021 $ 7,059,375
Obligations of U. S.
government agencies 28,846,097 289,901 87,000 29,048,998
Obligations of states and
political subdivisions 3,086,145 80,240 3,166,385
----------------- ---------------- --------------- -----------------

Total $ 38,930,102 $ 442,677 $ 98,021 $ 39,274,758
================= ================ =============== =================
</TABLE>

<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Approximate
December 31, 1994 Cost Gains Losses Market Value
----------------- ----------------- ---------------- --------------- -----------------
<S> <C> <C> <C> <C>
U. S. Treasury securities $ 7,003,453 $ $ 273,912 $ 6,729,541
Obligations of U. S.
government agencies 34,188,497 14,972 1,591,555 32,611,914
Obligations of states and
political subdivisions 2,868,124 30,761 40,651 2,858,234
----------------- ---------------- --------------- -----------------

Total $ 44,060,074 $ 45,733 $ 1,906,118 $ 42,199,689
================ ================ =============== =================

</TABLE>

F-13
<PAGE> 87
COMMUNITY BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994

NOTE 2 - SECURITIES HELD TO MATURITY: (CONTINUED)

The amortized cost and approximate market value of debt securities at December
31, 1995, by contractual maturity, are shown below. Expected maturities may
differ from contractual maturities because borrowers may have the right to call
or prepay obligation with or without call or prepayment penalties:

<TABLE>
<CAPTION>
Amortized Approximate
Cost Market Value
----------------- -----------------
<S> <C> <C>
Due in 1996 $ 16,900,903 $ 16,937,136
Due between 1997 and 2000 19,489,737 19,734,568
Due between 2001 and 2005 688,030 703,256
Mortgage-backed securities 1,851,432 1,899,798
----------------- -----------------

Total $ 38,930,102 $ 39,274,758
================= =================
</TABLE>

The market values of obligations of state and political subdivisions are based
on available market data, which often reflect transactions of a relatively
small size and are not necessarily indicative of the price at which large
amounts of particular issues could be readily sold.

Management does not anticipate a requirement to sell any of the Bank's
investment securities for liquidity or other operating purposes and has the
ability and intent to hold these securities until maturity.

Securities with a carrying value of approximately $17,393,286 and approximate
market value of $17,437,672, were pledged to secure public deposits and for
other purposes required or permitted by law.

Proceeds from maturities and calls of investments in debt securities during the
year were $10,626,910. Gross gains of $9,770 and losses of $635 were incurred
on these transactions.

NOTE 3 - LOANS

The Bank grants commercial, residential and consumer loans primarily to
customers in Tangipahoa Parish. Although the Bank has a diversified loan
portfolio, the ability of its debtors to honor their contracts is to some
extent dependent upon the economic conditions in Tangipahoa Parish.

F-14
<PAGE> 88
COMMUNITY BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994

NOTE 3 - LOANS (CONTINUED)

The composition of the loan portfolio at December 31, 1995 and 1994 is as
follows:

<TABLE>
<CAPTION>
1995 1994
----------------- -----------------
<S> <C> <C>
Commercial $ 14,998,166 $ 13,023,836
Real estate 11,603,038 10,131,766
Loans to individuals 7,838,604 6,932,426
Other 450,295 701,594
----------------- -----------------
34,890,103 30,789,622

Less allowance for loan losses 458,522 473,539
----------------- -----------------

Total $ 34,431,581 $ 30,316,083
================= =================
</TABLE>

Loans on which the accrual of interest has been discontinued or reduced
amounted to approximately $186,940 and $179,888 at December 31, 1995 and 1994,
respectively. If interest on those loans had been accrued, income before
provision for income taxes would have increased approximately $18,650 and
$15,749 for 1995 and 1994, respectively.

Changes in the allowance for loan losses were as follows:

<TABLE>
<CAPTION>
1995 1994
----------------- -----------------
<S> <C> <C>
Balance, beginning of year $ 473,539 $ 470,711
Provision charged to operations 0 0
Loans charged off -156,012 -57,701
Recoveries 140,995 60,529
----------------- -----------------

Balance, end of year $ 458,522 $ 473,539
================= =================
</TABLE>

NOTE 4 - BANK PREMISES AND EQUIPMENT

Major classifications of bank premises and equipment at December 31, 1995 and
1994 are summarized as follows:

<TABLE>
<CAPTION>
1995 1994
----------------- -----------------
<S> <C> <C>
Land $ 250,597 $ 190,617
Buildings and improvements 1,166,285 1,225,648
Furniture, fixtures and equipment 1,086,920 1,140,465
----------------- -----------------
2,503,802 2,556,730
Less accumulated depreciation 991,780 893,051
----------------- -----------------

Net $ 1,512,022 $ 1,663,679
================= =================
</TABLE>

Depreciation expense totaled $202,850 and $110,365 for the years ended December
31, 1995 and 1994, respectively.

F-15
<PAGE> 89
COMMUNITY BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994

NOTE 5 - INCOME TAXES

The components of the income tax expense, benefit(-) are as follows:

<TABLE>
<CAPTION>
1995 1994
----------------- -----------------
<S> <C> <C>
Currently payable $ 353,176 $ 471,990
Deferred 17,217
Change in valuation allowance -37,424 -13,635
----------------- -----------------
Total $ 332,969 $ 458,355
================= =================
</TABLE>

A reconciliation of income tax expenses as reflected in the statement of income
with income tax expense calculated at the statutory rate of 34% is as follows:

<TABLE>
<CAPTION>
1995 1994
----------------- -----------------
<S> <C> <C>
Tax at statutory rate $ 413,974 $ 515,045
Increase, reduction(-) in tax resulting from:
Tax exempt interest -51,504 -52,381
Non-deductible expenses 7,923 9,326
Change in valuation allowance -37,424 -13,635
----------------- -----------------

$ 332,969 $ 458,355
================= =================
</TABLE>

Temporary differences between the financial statement carrying amounts and the
tax bases of assets and liabilities give rise to the following net deferred tax
asset:

<TABLE>
<CAPTION>
December 31,
-------------------------------------
1995 1994
----------------- -----------------
<S> <C> <C>
DEFERRED TAX ASSETS:
Allowance for loan losses not
currently deductible $ 37,424 $ 37,424
Provision for loss on other
real estate not currently
deductible 34,345 24,242
Less valuation allowance -37,424
----------------- -----------------
71,769 24,242
----------------- -----------------
DEFERRED TAX LIABILITY
Depreciation -37,926 -10,607
----------------- -----------------

Net deferred tax asset $ 33,843 $ 13,635
================= =================
</TABLE>

The Corporation has evaluated the need for a valuation allowance and, based on
the weight of the available evidence, has determined that it is more likely
than not that all deferred tax assets will eventually be realized.

F-16
<PAGE> 90
COMMUNITY BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994

NOTE 6 - RELATED PARTIES

Certain executive officers, directors, and organizations with which they are
associated, have loans, deposits, and other transactions with the Bank. Such
transactions are on substantially the same terms as those prevailing at the
time for comparable transactions with others. An analysis of changes in these
loans follows:

<TABLE>
<S> <C>
Balance at January 1, 1995 $ 682,337

New loans 648,640

Repayments -496,286
-----------------

Balance at December 31, 1995 $ 834,691
=================
</TABLE>

The Company is affiliated with Merchants Bank and Trust Company and its Holding
Company, Merchants Bancshares, Inc. by virtue of common ownership and
management control. There were no significant transactions with these entities
in the year ended December 31, 1995.

NOTE 7 - COMMITMENTS AND CONTINGENCIES

The Bank had outstanding commitments to extend credit of $2,759,000 at December
31, 1995. Commitments to extend credit are agreements to lend to a customer as
long as there is no violation of any condition established in the contract.
Commitments generally have fixed expiration dates or other termination clauses
and may require payment of a fee. The Bank evaluates each customer's
creditworthiness on a case-by-case basis. The amount of collateral obtained,
if deemed necessary by the Bank upon extension of credit, is based on
management's credit evaluation of the customer. The Bank is also contingently
liable for outstanding letters of credit totaling $625,187 at December 31,
1995. The credit risk involved in issuing letters of credit is essentially the
same as that involved in extending a loan.

The Bank, in the normal course of business, is defendant in various legal
claims. Management and legal counsel are of the opinion that these actions
will not have a material effect on the Bank's financial position.

NOTE 8 - EMPLOYEE BENEFIT PLAN

The Bank has a voluntary savings plan covering substantially all employees and
allowing eligible employees to contribute up to 4% of their compensation which
is matched by the Bank. In addition, the Bank's Board of Directors may, at its
discretion, authorize an additional contribution to the plan. The Bank's total
contributions to the plan, including the discretionary contribution, were
$38,957 and $39,930 for the years ended December 31, 1995 and 1994,
respectively.

F-17
<PAGE> 91
COMMUNITY BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994

NOTE 9 - LEASES:

The following is a schedule by year of future minimum rental payments, required
under operating leases that have initial or remaining noncancellable lease
terms in excess of one year as of December 31, 1995.

<TABLE>
<S> <C> <C>
Twelve months period to December 31, 1996 $ 49,126
1997 49,126
1998 49,126
1999 37,245
-----------------

Total minimum lease payments $ 184,623
=================
</TABLE>

Rent expense of $50,638 for 1995 is included in occupancy expense in the
statement of income.

NOTE 10 - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS:

The following methods and assumptions were used to estimate the fair value of
each class of financial instruments for which it is practicable to estimate
that value:

CASH, SHORT-TERM INVESTMENTS AND FEDERAL FUNDS SOLD - For those short-term
instruments, the carrying amount is a reasonable estimate of fair value.

SECURITIES - For Securities, fair value equals quoted market price, if
available. If a quoted market price is not available, fair value is
estimated using quoted market prices for similar securities.

LOANS - The fair value of loans is estimated by discounting the future cash
flows using the current rates at which similar loans would be made to
borrowers with similar credit ratings and for the same remaining
maturities.

DEPOSITS - The fair value of demand deposits, savings accounts, and certain
money market deposits is the amount payable on demand at the reporting
date. The fair value of fixed-maturity certificates of deposit is
estimated using the rates currently offered for deposits of similar
remaining maturities.

COMMITMENTS - The fair value of commitments to extend credit was not
significant.

The estimated fair values of the Company's financial instruments are as
follows at December 31, 1995 (in thousands):

<TABLE>
<CAPTION>
Recorded Estimated
Book Balance Fair Value
----------------- -----------------
<S> <C> <C>
FINANCIAL ASSETS:
Cash, short-term investments
and federal funds sold $ 17,496 $ 17,496
Securities 38,930 39,275
Loans, net 34,432 33,837

FINANCIAL LIABILITIES:
Deposits 82,251 82,579
</TABLE>

F-18
<PAGE> 92
COMMUNITY BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994

NOTE 11 - SUPPLEMENTAL INFORMATION:

The following is selected supplemental information for the years ended December
31, 1995 and 1994.

<TABLE>
<CAPTION>
1995 1994
---------------- ----------------
<S> <C> <C>
Other operationg income:
Rent income - other real estate $ 71,639 $ 2,640
Other operationg expenses:
Deposit insurance premium expense 86,101 167,390
Postage expense 60,774 47,891
Supplies expense 94,775 105,217
Interest paid 2,343,203 2,189,380
Income taxes paid 296,945 560,743
</TABLE>

NOTE 12 - SUMMARIZED FINANCIAL INFORMATION OF COMMUNITY BANCSHARES, INC.
(PARENT COMPANY ONLY):

BALANCE SHEETS

<TABLE>
<CAPTION>
December 31,
-------------------------------------
1995 1994
---------------- ----------------
<S> <C> <C>
Assets:
Investment in subsidiary $ 10,377,296 $ 9,835,495
Other 139,083 137,268
--------------- ---------------

$ 10,516,379 $ 9,972,763
=============== ===============

Liabilities and Stockholders' Equity:
Dividend payable $ 131,241 $ 131,241
Stockholders' equity 10,385,138 9,841,522
--------------- ---------------

$ 10,516,379 $ 9,972,763
=============== ===============
</TABLE>

STATEMENTS OF EARNINGS

<TABLE>
<CAPTION>
Years Ended December 31,
-----------------------------------
1995 1994
--------------- ---------------
<S> <C> <C>
Dividends received from subsidiary $ 330,155 $ 330,155
Excess equity in earnings of subsidiary over dividends received 541,801 711,869
Interest income 196 138
Other expenses -556 -1,556
Income tax credit 122 482
--------------- ---------------

Net earnings $ 871,718 $ 1,041,088
=============== ===============
</TABLE>

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
Years Ended December 31,
-----------------------------------
1995 1994
--------------- ---------------
<S> <C> <C>
Cash flows from operating activities - principally dividends from subsidiary $ 330,277 $ 328,856
Cash flows from financing activities - principally dividends paid 328,103 328,103
--------------- ---------------
Net increase in cash 2,174 753
Cash, beginning 4,725 3,972
--------------- ---------------
Cash, ending $ 6,899 $ 4,725
=============== ===============

</TABLE>

F-19
<PAGE> 93
APPENDIX A

MERGER AGREEMENT
AGREEMENT AND PLAN OF REORGANIZATION

THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement"), dated as of
the 19th day of June, 1996, is made between COMMUNITY BANCSHARES, INC.,
Independence, Louisiana, a Louisiana corporation ("CBI"), HANCOCK HOLDING
COMPANY, Gulfport, Mississippi, a Mississippi corporation ("HHC"), Community
State Bank, Independence, Louisiana, a Louisiana state bank ("Bank"), and
Hancock Bank of Louisiana, Baton Rouge, Louisiana, a Louisiana state bank
("Hancock Bank").

The Boards of Directors of CBI, HHC, Bank and Hancock Bank have duly
approved this Agreement and have authorized the execution hereof by their
respective President. CBI and Bank have directed that this Agreement be
submitted to a vote of their shareholders, in accordance with Part XI of the
Louisiana Business Corporation Law ("LCL"), and Section 6:352 of the Louisiana
Banking Laws ("LBL"), respectively, and the terms of this Agreement.

In consideration of their mutual promises and obligations, the parties
hereto adopt and make this Agreement for the merger of CBI with and into HHC
and the merger of Bank with and into Hancock Bank and prescribe the terms and
conditions of such mergers and the mode of carrying them into effect, which
shall be as follows:

1. DEFINITIONS

Certain Defined Terms. As used in this Agreement, the following terms
shall have the following meanings (such meaning to be equally applicable to
both the singular and plural forms of the terms defined):

a. "Agreement" shall mean this Agreement and Plan of Reorganization
by and between CBI, HHC, Bank, and Hancock Bank and any amendments thereto.
References to Articles, Sections, Schedules and the like refer to the Articles,
Sections, Schedules and the like of this Agreement unless otherwise indicated.

b. "Bank" means Community State Bank, a Louisiana banking
corporation duly chartered on November 4, 1944, organized and existing under
and pursuant to the laws of the State of Louisiana and maintaining its
principal place of business at 203 N. Railroad Avenue, in Independence,
Tangipahoa Parish, Louisiana with a registered address at 583 West Railroad,
Independence, Louisiana 70443.

c. "Business Day" shall mean a day on which Hancock Bank is open for
business and which is not a Saturday, Sunday or legal bank holiday.

d. "CBI" means Community Bancshares, Inc., a corporation duly
chartered on October 8, 1981, organized, and existing under and pursuant to the
laws of the State of Louisiana; maintaining its principal place of business at
203 N. Railroad Avenue, in Independence, Tangipahoa, Louisiana; and is a bank
holding company within the meaning of the Bank Holding Company Act of 1956, as
amended.

e. "Closing" The closing (the "Closing") of the transactions
contemplated herein will take place at a place and on a date that is mutually
agreed to by the parties ("Closing Date") that is within thirty (30) days
following the later of the date of receipt of all applicable regulatory
approvals relating to the transactions contemplated herein, the expiration of
all applicable statutory and regulatory waiting periods relative thereto, or
the date the Registration Statement (the "Registration Statement") filed with
the SEC is declared effective, or such later date as may be agreed to by the
parties. At the Closing the parties shall each deliver to the other such
evidence of the satisfaction of the conditions to the Mergers (as defined in
Section 2.1 hereof) as may reasonably be required (including material required
to be delivered under this Agreement).

f. "Effective Date" Immediately upon consummation of the Closing, or
on such other later date as the parties hereto may agree, the Company Merger
Agreement (as defined in Section 2.1 hereof) shall be certified, executed,
acknowledged and delivered to the Secretary of State of the State of Louisiana
(the "Secretary") for filing pursuant to and in accordance with the provisions
of Section 12:112 of the LCL. The Company Merger shall become effective as of
the date and time of issuance by the Secretary of a Certificate of Merger
relating to the Company Merger.

Immediately upon consummation of the Closing, or on such other later
date as the parties hereto may agree, the Bank Merger Agreement (as defined in
Section 2.1 hereof) shall be certified, executed, acknowledged and delivered to
the Louisiana Office of Financial

A-1
<PAGE> 94
Institutions (the "OFI") for filing pursuant to and in accordance with the
provisions of Section 6:352 of the LBL. The Bank Merger shall become effective
as of the date and time specified or permitted by the OFI in a Certificate of
Merger or other written record issued by the OFI.

g. "FDIC" means that agency of the United States of America known as
the Federal Deposit Insurance Corporation, or any successor United States
governmental agency which insures deposits of commercial banks.

h. "FRB" means that agency of the United States of America which
acts in the capacity of a governmental central bank known as the Federal
Reserve System represented by actions of its Board of Governors, having
regulatory authority over bank holding companies, or any successor United
States governmental agency performing the function of exercising such
regulatory authority.

i. "HHC" means Hancock Holding Company, a corporation duly
chartered, organized and existing under and pursuant to the laws of the State
of Mississippi; maintaining its principal place of business at One Hancock
Plaza, in Gulfport, Harrison County, Mississippi; and is a bank holding company
within the meaning of the Bank Holding Company Act of 1956, as amended.

j. "Hancock Bank" means Hancock Bank of Louisiana, a Louisiana
banking corporation, duly chartered, organized and existing under and pursuant
to the laws of the State of Louisiana and maintaining its principal place of
business at One American Place in Baton Rouge, East Baton Rouge Parish,
Louisiana.

k. "OFI" means the Office of Financial Institutions of the State of
Louisiana having regulatory authority over Hancock Bank and Bank or any
successor Louisiana governmental agency exercising such regulatory authority.

l. "Party" shall mean HHC, Hancock Bank, CBI, or Bank and "Parties"
shall mean HHC, Hancock Bank, CBI and Bank.

m. "Person" shall mean any individual, corporation, partnership,
joint venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.

n. "SEC" means that agency of the United States of America known as
the Securities and Exchange Commission.

2. THE MERGERS AND RELATED MATTERS

a. Mergers. On the Effective Date, CBI shall be merged with and
into HHC under the Articles of Incorporation of HHC, pursuant to the provisions
of this Agreement, the provisions of and with the effect provided in, Part XI
of the LCL (the "Company Merger") and the Company Merger Agreement in
substantially the form of Exhibit A hereto (the "Company Merger Agreement").
Simultaneously, on the Effective Date, Bank shall be merged with and into
Hancock Bank under the Articles of Incorporation of Hancock Bank, pursuant to
the provisions of this Agreement, the provisions of and with the effect
provided in Section 6:355 of the LBL (the "Bank Merger" and together with the
Company Merger, the "Mergers") and the Bank Merger Agreement in substantially
the form of Exhibit B hereto (the "Bank Merger Agreement" and, together with
the Company Merger Agreement, the "Merger Agreements"). For federal income tax
purposes, it is intended that the Company Merger shall qualify as a non-taxable
reorganization under and in accordance with Section 368(a)1(A) of the Internal
Revenue Code of 1986, as amended, and the applicable IRS regulations. In
addition, for federal income tax purposes, it is intended that the Bank Merger
shall qualify as a non-taxable reorganization under and in accordance with
Section 368(a)1(A) and Section 368 (a)(2)(D) of the Internal Revenue Code of
1986, as amended, and the applicable IRS regulations. The Parties expect that
the Mergers will further certain of their business objectives, including, and
without limitation, the expansion of operations as a financial institution.

b. Effect of Company Merger. Upon consummation of the Company
Merger, the separate corporate existence of CBI shall cease and HHC shall
continue as the surviving corporation. The name of HHC, as the surviving
corporation, shall by virtue of the Company Merger remain unchanged. On the
Effective Date, as hereinabove provided, all of the assets and property of
every kind and character, real, personal and mixed, tangible and intangible,
choses in action, rights, and credits then owned by CBI, or which would inure
to it, shall immediately by operation of law and without any conveyance or
transfer or without any further action or deed, be vested in and become the
property of HHC, which shall have, hold, and enjoy the same in its own right as
fully and to the same extent as the same were possessed, held, and enjoyed by
CBI prior to such merger, and HHC shall be deemed to be and shall be a
continuation of the original entities and all of the rights and obligations of
CBI shall remain unimpaired, and HHC, on the Effective Date of the Company
Merger shall succeed to all such rights, obligations, duties and liabilities
connected therewith.

c. Effect of Bank Merger. Upon consummation of the Bank Merger, the
separate corporate existence of Bank shall cease and Hancock Bank shall
continue as the surviving corporation. The name of Hancock Bank, as the
surviving corporation, shall by virtue of the

A-2
<PAGE> 95
Bank Merger remain unchanged. On the Effective Date, as hereinabove provided,
all of the assets and property of every kind and character, real, personal and
mixed, tangible and intangible, choses in action, rights, and credits then
owned by Bank, or which would inure to it, shall immediately by operation of
law and without any conveyance or transfer or without any further action or
deed, be vested in and become the property of Hancock Bank, which shall have,
hold, and enjoy the same in its own right as fully and to the same extent as
the same were possessed, held, and enjoyed by Bank prior to such merger; and
Hancock Bank shall be deemed to be and shall be a continuation of the original
entities and all of the rights and obligations of Bank shall remain unimpaired,
and Hancock Bank, on the Effective Date of the Bank Merger shall succeed to all
such rights, obligations, duties and liabilities connected therewith.

3. CONVERSION OF STOCK

a. Conversion of CBI Stock and Bank Stock.

i. On the Effective Date, each share of the Common Stock,
$3.33 par value, of HHC ("HHC Common Stock") issued and
outstanding immediately prior to the Effective Date shall
remain outstanding and shall represent one share of Common
Stock, $3.33 par value, of HHC.

ii. On the Effective Date, each share of Common Stock, $5.00
par value, of CBI ("CBI Common Stock") issued and
outstanding immediately prior to the Effective Date shall,
by virtue of the Company Merger and without any action on
the part of the holder thereof, be converted into the
right to receive 5.0721 shares of HHC Common Stock and
$61.7107 in cash (collectively the "CBI Exchange Ratio"),
provided however, each holder of 25 or fewer shares of CBI
Common Stock shall not receive HHC Common Stock but rather
shall be entitled to receive $246.8428 for each share of
CBI Common Stock.

iii. On the Effective Date, each share of Common Stock, $5.00
par value, of Bank ("Bank Common Stock") issued and
outstanding immediately prior to the Effective Date, other
than the Bank Common Stock held by CBI, shall by virtue of
the Bank Merger and without any action on the part of the
holder thereof, be converted into the right to receive
6.2458 shares of HHC Common Stock and $75.9904 in cash,
(collectively the "Bank Exchange Ratio"), provided
however, each holder of 25 or fewer shares of Bank Common
Stock shall not receive HHC Common Stock but rather shall
be entitled to receive $303.9616 for each share of Bank
Common Stock.

iv. As a result of the Mergers and without any action on the
part of the holder thereof, all shares of CBI Common Stock
and all shares of Bank Common Stock, other than the Bank
Common Stock held by CBI, shall cease to be outstanding
and shall be canceled and retired and shall cease to
exist, and each holder of a certificate (a "Certificate")
representing any shares of CBI Common Stock or any shares
of Bank Common Stock, other than the Bank Common Stock
held by CBI, shall thereafter cease to have any rights
with respect to such shares of CBI Common Stock or Bank
Common Stock, except the right to receive, without
interest, the HHC Common Stock and cash in accordance with
Section 3.1(b) and 3.1(c), and cash for fractional shares
of HHC Common Stock in accordance with Section 3.2(e) upon
the surrender of such Certificate.

v. Each share of CBI Common Stock and Bank Common Stock
issued and held in CBI's and Bank's treasury,
respectively, at the Effective Date shall, by virtue of
the Merger, cease to be outstanding and shall be canceled
and retired without payment of any consideration therefor.

b. Exchange of Certificates Representing CBI Common Stock and Bank
Common Stock.

i. As of the Effective Date, HHC shall deposit, or shall
cause to be deposited, with Hancock Bank Trust Department,
as exchange agent (the "Exchange Agent"), for the benefit
of the holders of shares of CBI Common Stock and Bank
Common Stock, other than the Bank Common Stock held by
CBI, for exchange in accordance with this Article 3,
certificates representing the shares of HHC Common Stock
and cash (such certificates for shares of HHC Common Stock
and cash being hereinafter referred to as the "Exchange
Fund") to be issued pursuant to Section 3.1 and paid
pursuant to this Section 3.2 in exchange for outstanding
shares of CBI Common Stock and Bank Common Stock.

ii. Promptly after the Effective Date, HHC shall cause the
Exchange Agent to mail to each holder of record of a
Certificate or Certificates (other than those representing
Bank Common Stock held by CBI or other than those
representing shares with respect to which the holder
thereof has perfected appraisal rights under the LCL or
LBL

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and has not subsequently lost, withdrawn or forfeited such
rights) (i) a letter of transmittal which shall specify
that delivery shall be effected, and risk of loss and
title to the Certificates shall pass, only upon delivery
of the Certificates to the Exchange Agent and shall be in
such form and have such other provisions as HHC may
reasonably specify and (ii) instructions for use in
effecting the surrender of the Certificates in exchange
for certificates representing shares of HHC Common Stock
and cash, and cash in lieu of fractional shares. Upon
surrender of a Certificate for cancellation to the
Exchange Agent together with such letter of transmittal,
duly executed and completed in accordance with the
instructions thereto, the holder of such Certificate shall
be entitled to receive in exchange therefor (x) a
certificate representing that number of whole shares of
HHC Common Stock and (y) a check representing the amount
of cash and cash in lieu of fractional shares, if any,
which such holder has the right to receive in respect of
the Certificate surrendered pursuant to Section 3.1(b) or
Section 3.1(c), after giving effect to any required
withholding tax, and the Certificate so surrendered shall
forthwith be canceled. No interest will be paid or
accrued on the value of any HHC Common Stock or cash
payable to holders of Certificates. In the event of a
transfer of ownership of CBI Common Stock or Bank Common
Stock which is not registered in the transfer records of
CBI or Bank, a certificate representing the proper number
of shares of HHC Common Stock, together with a check for
the cash component of the CBI Exchange Ratio or Bank
Exchange Ratio and/or cash to be paid in lieu of
fractional shares, may be issued to such a transferee if
the Certificate representing such CBI Common Stock or Bank
Common Stock is presented to the Exchange Agent,
accompanied by all documents required to evidence and
effect such transfer and to evidence that any applicable
stock transfer taxes have been paid.

iii. Notwithstanding any other provisions of this Agreement, no
dividends on HHC Common Stock shall be paid with respect
to any shares of CBI Common Stock or Bank Common Stock
represented by a Certificate until such Certificate is
surrendered for exchange as provided herein. Subject to
the effect of applicable laws, following surrender of any
such Certificate, there shall be paid to the holder of the
certificates representing whole shares of HHC Common Stock
issued in exchange therefor, without interest, (i) at the
time of such surrender, the amount of dividends or other
distributions with a record date after the Effective Date
theretofore payable with respect to such whole shares of
HHC Common Stock and not paid, less the amount of any
withholding taxes which may be required thereon, and (ii)
at the appropriate payment date, the amount of dividends
or other distributions with a record date after the
Effective Date but prior to surrender and a payment date
subsequent to surrender payable with respect to such whole
shares of HHC Common Stock, less the amount of any
withholding taxes which may be required thereon.

iv. On or after the Effective Date, there shall be no
transfers on the stock transfer books of CBI or Bank of
the shares of CBI Common Stock or Bank Common Stock,
respectively which were outstanding immediately prior to
the Effective Time. If, after the Effective Date,
Certificates are presented to HHC, they shall be canceled
and exchanged for certificates for shares of HHC Common
Stock and cash, as appropriate, and cash in lieu of
fractional shares, if any, deliverable in respect thereof
pursuant to this Agreement in accordance with the
procedures set forth in this Article 3. Certificates
surrendered for exchange by any person constituting an
"affiliate" of CBI or Bank for purposes of Rule 145(c)
under the Securities Act of 1933 (the "Securities Act")
shall not be exchanged until HHC has received a written
agreement from such person as provided in Section 4.1.

v. No fractional shares of HHC Common Stock shall be issued
pursuant hereto. In lieu of the issuance of any
fractional share of HHC Common Stock pursuant to Section
3.1(b), or Section 3.1(c), cash adjustments will be paid
to holders in respect of any fractional share of HHC
Common Stock that would otherwise be issuable, and the
amount of such cash adjustment shall be equal to such
fractional proportion of $36.50.

vi. Any portion of the Exchange Fund (including the proceeds
of any investments thereof and any shares of HHC Common
Stock) that remains unclaimed by the former stockholders
of CBI or Bank one year after the Effective Date shall be
delivered to HHC. Any former stockholders of CBI or Bank
who have not theretofore complied with this Article 3
shall thereafter look only to HHC for payment in respect
of their shares, in any event without any interest
thereon. In the event that any such holder fails to
surrender either such Certificate or the documents and
information contemplated by the letter of transmittal and
instructions on or before the fifth (5th) anniversary of
the Effective Date, HHC shall not have any obligation to
deliver the amount to which any such holder would have
been entitled in-accordance with the provisions of this
Agreement and any such holder shall not be entitled to
receive from HHC any amount in substitution and exchange
for each share canceled and extinguished in accordance
with this Agreement.

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vii. None of HHC, Bancshares, Bank, the Exchange Agent or any
other person shall be liable to any former holder of
shares of CBI Common Stock or Bank Common Stock for any
amount properly delivered to a public official pursuant to
applicable abandoned property, escheat or similar laws.

viii. In the event any Certificate shall have been lost, stolen
or destroyed, upon the making of an affidavit of that fact
by the person claiming such Certificate to be lost, stolen
or destroyed and, if required by HHC, the posting by such
person of a bond in such reasonable amount as HHC may
direct as indemnity against any claim that may be made
against it with respect to such Certificate, the Exchange
Agent will issue in exchange for such lost, stolen or
destroyed Certificate the shares of HHC Common Stock and
cash, as appropriate, and cash in lieu of fractional
shares, and unpaid dividends and distributions on shares
of HHC Common Stock as provided in Section 3.2(c),
deliverable in respect thereof pursuant to this Agreement.

c. Adjustment of Exchange Ratio. In the event that, subsequent to
the date of this Agreement but prior to the Effective Date, CBI, Bank, or HHC
changes the number of shares of CBI Common Stock, Bank Common Stock or HHC
Common Stock, respectively, issued and outstanding as a result of a stock
split, reverse stock split, stock dividend, recapitalization or other similar
transaction, the CBI Exchange Ratio or the Bank Exchange Ratio, as the case may
be, shall be appropriately adjusted.

4. ACCOUNTING AND TAX MATTERS

a. Affiliates. CBI, Bank and HHC shall cooperate and use their best
efforts to identify those persons who may be deemed to be "affiliates" of CBI
or Bank within the meaning of Rule 145(c) or Rule 144 (as applicable) under the
Securities Act. CBI and Bank shall use its best efforts to cause each person
so identified to deliver to HHC, not later than thirty (30) days prior to the
Effective Date, a written agreement in substantially the form set forth in
Exhibit C attached hereto. HHC shall be entitled to place appropriate legends
on the certificates evidencing shares of HHC Common Stock to be received
pursuant to this Agreement by such affiliates and to issue appropriate stop
transfer instructions to the transfer agent for HHC Common Stock.

b. Accounting Treatment. It is intended by the Parties hereto, that
the Mergers will qualify for purchase accounting treatment under general
accepted accounting principles.

c. Accounting and Tax Representations. Each Party hereto
represents and warrants that the statements made with respect to it in the
Statement of Representations attached hereto on Schedule 4.3 and made a part
hereof, are true and correct as of the date hereof and will be true and correct
on the Effective Date.

5. CBI'S COVENANTS AND AGREEMENTS

a. Operation of Business. Between the date hereof and the Effective
Date, or until the termination of this Agreement, CBI covenants and agrees that
it will operate its business solely in the ordinary course consistent with
prudent business practices and in compliance with all applicable laws,
regulations and rules; and, CBI will cause the Bank to operate its business
solely in the ordinary course consistent with prudent business practices and in
compliance with all applicable laws, regulations and rules; and without prior
written consent of HHC, CBI will not, and CBI will cause Bank not to:

i. Amend or otherwise change its respective articles of
incorporation or bylaws, as each such document is in
effect on the date hereof;

ii. Issue or sell, or authorize for issuance or sale, the
shares of CBI or Bank or any additional shares of any
class of capital stock of CBI or Bank;

iii. Issue, grant, or enter into any subscription, option,
warrant, right, convertible security, or other agreement
or commitment of any character obligating CBI or Bank to
issue securities;

iv. Declare, set aside, make, or pay any dividend or other
distribution with respect to its capital stock, provided,
however, CBI and/or Bank may to the extent lawfully
permitted declare and pay dividends for the purpose of
allowing CBI's and Bank's stockholders to receive the
normal and customary third quarter, 1996 dividend in the
amount of $.90 and $1.11 per outstanding share of CBI
Common Stock and Bank Common Stock, respectively;

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<PAGE> 98
v. Redeem, purchase, or otherwise acquire, directly or
indirectly, any of its capital stock respectively;

vi. Authorize any capital expenditure(s) which, individually
or in the aggregate, exceed $20,000;

vii. Extend any new, or renew any existing, loan, credit,
lease, or other type of financing which individually
exceeds $50,000;

viii. Except in the ordinary course of business, sell, pledge,
dispose of, or encumber, or agree to sell, pledge, dispose
of, or encumber, any assets of CBI or Bank;

ix. Excluding normal and customary banking transactions, incur
any indebtedness for borrowed money, issue any debt
securities, or enter into or modify any contract,
agreement, commitment, or arrangement with respect
thereto;

x. Amend its or the Bank's Articles of Incorporation or
Bylaws (except to the extent required in order to effect
the Mergers as contemplated herein); impose, or suffer the
imposition, on any share of stock held by CBI in the Bank,
of any material lien, charge, or encumbrance, or permit
any such lien to exist; establish or add any automated
teller machines or branch or other banking offices; take
any action that would materially and adversely affect the
ability of any Party hereto to obtain the approvals
necessary for consummation of the transactions
contemplated hereby or that would materially and adversely
affect CBI's ability to perform its covenants and
agreements hereunder;

xi. Acquire (by merger, consolidation, lease or other
acquisition of stock, ownership interests or assets) any
corporation, partnership, or other business organization
or division thereof, or enter into any contract,
agreement, commitment, or arrangement with respect to any
of the foregoing;

xii. Enter into, extend, or renew any lease for office or other
space;

xiii. Except as required by law, enter into, adopt or amend any
bonus, profit sharing, compensation, stock option,
pension, retirement, deferred compensation, employment, or
other employee benefit plan, agreement, trust, fund, or
arrangement for the benefit or welfare of any officer,
employee or representative of CBI or Bank;

xiv. Grant any increase in compensation to any director,
officer, or employee or representative of CBI or Bank
except in the ordinary course of business consistent with
past practice; or

xv. Enter into, amend, or terminate any employment agreement,
relationship or responsibilities with any director,
officer, or key employee or representative of CBI or Bank,
or enter into, amend, or terminate any employment
agreement with any other person otherwise than in the
ordinary course of business, or take any action with
respect to the grant or payment of any severance or
termination pay except as expressly consented to in
writing by HHC;

xvi. Take any action or omit to take any action which would
cause any of CBI's or Bank's representations or warranties
to be untrue or misleading in any material respect or any
covenant of CBI or Bank under this Agreement incapable of
being performed; or

xvii. Agree in writing or otherwise to do any of the foregoing.

b. Preservation of Business. Between the date hereof and the
Effective Date, CBI will, and will cause Bank to, use its best efforts to
preserve its existing business and to keep its business organization intact,
including its present relationships with its employees and customers and others
having business relations with it.

c. Insurance. Pending the Closing, CBI shall cause the real
property owned by CBI and Bank to be insured reasonably against all insurable
risks under policies with reasonable deductibles and in full compliance with
any co-insurance provision.

d. Stockholders' Meeting. CBI and Bank will promptly give proper
notice of a stockholders' meeting, respectively, for the purpose of approving
this Agreement. Said notice shall include notice of dissenter's rights, if
any, and shall solicit stockholders' proxies in favor

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<PAGE> 99
of this Agreement, and all notices shall be given in accordance with all
applicable laws, regulations, and rules. CBI, Bank and their respective
directors and principal stockholders will support and vote in favor of a
stockholder resolution approving this Agreement.

e. Property Transfers. From time to time, as and when requested by
HHC and to the extent permitted by Louisiana law, the officers and directors of
CBI and Bank last in office shall execute and deliver such deeds and other
instruments and shall take or cause to be taken such further or other actions
as shall be necessary in order to vest or perfect in or to confirm of record or
otherwise to HHC title to, and possession of, all the property, interests,
assets, rights, privileges, immunities, powers, franchises, and authorities of
CBI and Bank, and otherwise to carry out the purposes of this Agreement.

f. CBI and Bank Financial and Other Reports. CBI shall (and shall
cause Bank to) make available to HHC and Hancock Bank the following statements
and other reports and documents:

i. CBI's Consolidated Balance Sheets as of June 30, 1996 and
1995 (unaudited) and December 31, 1995, 1994 and 1993
(audited); Consolidated Statements of Income and Changes
in Stockholders' Equity and Consolidated Statements of
Cash Flows for the years ended December 31, 1995, 1994 and
1993 (audited), and Consolidated Statements of Income for
the six-month periods ended June 30, 1996 and 1995
(unaudited) ("CBI Financial Statements");

ii. All correspondence with the OFI, the FDIC, the FRB and the
Internal Revenue Service from January 1, 1996 through the
date of Closing (for inspection, but copying may be
restricted by legal limitations); and

iii. Such additional financial or other information as may be
required for the regulatory applications and Registration
Statement in connection with the consummation of the
Mergers (subject to any legal limitations).

g. Due Diligence. In order to afford HHC access to such
information as it may reasonably deem necessary to perform any due diligence
review with respect to the assets of CBI and Bank to be acquired as a result of
the Mergers, CBI shall (and shall cause the Bank to), upon reasonable notice,
afford HHC and its officers, employees, counsel, accountants, and other
authorized representatives access, during normal business hours throughout the
period prior to the Effective Date, to all of its and the Bank's properties;
books, contracts, commitments, loan files, litigation files and records
(including, but not limited to, the minutes of the Boards of Directors of CBI
and the Bank and all committees thereof), and it shall (and shall cause the
Bank to), upon reasonable notice and to the extent consistent with applicable
law, furnish promptly to HHC such information as HHC may reasonably request to
perform such review.

h. No Solicitation. Prior to the Effective Date, neither CBI nor
Bank shall authorize or knowingly permit any of their officers, directors,
employees, representatives, agents or other persons controlled by CBI or Bank
to directly or indirectly, encourage or solicit or, hold any discussions or
negotiations with, or provide any information to, any persons, entity or group
concerning any merger, consolidation, sale of substantial assets, sale of
shares of capital stock or similar transactions involving, directly or
indirectly, CBI or Bank except as contemplated by this Agreement. CBI and Bank
shall promptly communicate to HHC the identity and terms of any proposal which
they may receive with respect to any such transaction.

6. CBI'S REPRESENTATIONS AND WARRANTIES

CBI represents and warrants to HHC and Hancock Bank as follows: for
purposes of this Agreement, except in Section 6.1 and where the context
requires otherwise, any reference to CBI in this Article 6 shall be deemed to
include CBI and Bank.

a. Organization and Authority. Each of CBI and Bank is a
corporation or bank duly organized, validly existing and in good standing under
the laws of the State of Louisiana and each of CBI and Bank has the corporate
power and authority to own, lease and operate its properties and assets and to
carry on its business as it is now being conducted.

b. Authorization. The execution, delivery and performance of this
Agreement by CBI and Bank and the consummation of the transactions contemplated
hereby have been duly authorized by the Boards of Directors of CBI and Bank,
subject to regulatory approval. No other corporate proceedings on the part of
CBI or Bank are necessary to authorize consummation of this Agreement, except
for the approval of the transaction by CBI's and Bank's stockholders, and the
performance by CBI and Bank of the terms hereof. This Agreement is a valid and
binding obligation of CBI and Bank enforceable against CBI and Bank in
accordance with its terms except as may be limited by applicable bankruptcy,
insolvency, reorganization or moratorium or other similar laws affecting
creditors' rights generally and except that the availability of equitable
remedies is within the discretion of the appropriate court and except that it
is subject to approval by its stockholders and applicable regulatory agencies.

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Neither the execution, delivery or performance of this Agreement by CBI,
nor the consummation of the transactions contemplated hereby, nor compliance by
CBI with any of the provisions hereof, will (a) in any material respect
violate, conflict with, or result in a breach of any provision of, or
constitute a default (or an event which, with notice or lapse of time or both,
would constitute a default) under or result in the termination of, or
accelerate the performance required by, or result in a right of termination or
acceleration, or the creation of any lien, security interest, charge or
encumbrance upon any of the properties or assets of CBI or Bank under any
terms, conditions or provisions of (i) CBI's or Bank's Charter or Bylaws or
other charter documents of CBI or Bank or (ii) any material note, bond,
mortgage, indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which CBI or Bank is a party or by which CBI or
Bank may be bound, or to which CBI or Bank or the properties or assets of it
may be subject, or (b) violate in any material respect any judgment, ruling,
order, writ, injunction, decree, statute, rule or regulation applicable to CBI
or Bank or any of its properties or assets.

c. Capital Structure of CBI. As of the date hereof, the authorized
capital of CBI consists solely of 216,150 shares of common stock of the par
value of $5.00 each and no preferred stock. As of the date hereof 87,494
shares of such authorized common stock were issued and outstanding. The
outstanding shares of capital stock of CBI are validly issued and outstanding,
fully paid and nonassessable. There are no outstanding options, conversion
rights, warrants, calls, rights, commitments or agreements to issue any form of
stock or other security of CBI. There are no outstanding obligations or
commitments to purchase, redeem or otherwise acquire any outstanding shares of
common stock of CBI.

d. Ownership of Other Banks. CBI does not own, directly or
indirectly, five percent (5%) or more of the outstanding capital stock or other
voting securities of any corporation, bank, or other organization except the
Bank. The presently authorized capital of the Bank consists solely of 80,000
shares of common stock of the par value of $5.00 each and no preferred stock.
As of the date hereof, 72,050 shares of common stock were issued and
outstanding. The outstanding shares of capital stock of the Bank are validly
issued and outstanding, fully paid and, nonassessable and, 71,001 of such
shares are owned by CBI, free and clear of all liens, claims and encumbrances.

e. CBI Financial and Other Reports. CBI's Financial Statements (i)
will have been prepared in accordance with generally accepted accounting
principles, consistently applied, (ii) will present fairly the consolidated
results of operations and financial position of CBI for the periods and at the
times indicated, and (iii) will be true and correct in all material respects
for the periods and at the times indicated.

f. No Material Adverse Change. Since December 31, 1995, there has
been no event or condition of any character (whether actual, or to the
knowledge of CBI or the Bank, threatened or contemplated) that has had or can
reasonably be anticipated to have, or that, if concluded or sustained adversely
to CBI would reasonably be anticipated to have, a material adverse effect on
the financial condition, results of operations, business or prospects of CBI or
the Bank, excluding changes in laws or regulations that affect banking
institutions generally.

g. Tax Liability. The amounts set up as liabilities for taxes in
the CBI Financial Statements are sufficient for the payment of all respective
taxes (including, without limitation, federal, state, local, and foreign
excise, franchise, property, payroll, income, capital stock, and sales and use
taxes) accrued in accordance with GAAP and unpaid at the respective dates
thereof.

h. Tax Returns: Payment of Taxes. All federal, state, local, and
foreign tax returns (including, without limitation, estimated tax returns,
withholding tax returns with respect to employees, and FICA and FUTA returns)
required to be filed by or on behalf of CBI or the Bank have been timely filed
or requests for extensions have been timely filed and granted and have not
expired for periods ending on or before December 31, 1995, and all returns
filed are complete and accurate to the best information and belief of their
respective managements and all taxes shown on filed returns have been paid. As
of the date hereof, there is no audit, examination, deficiency or refund
litigation or matter in controversy with respect to any taxes that might result
in a determination materially adverse to CBI or the Bank except as reserved
against in the CBI Financial Statements. All taxes, interest, additions and
penalties due with respect to completed and settled examinations or concluded
litigation have been paid, and CBI's reserves for bad debts at December 31,
1995, as filed with the Internal Revenue Service were not greater than the
maximum amounts permitted under the provisions of Section 585 of the Internal
Revenue Code of 1986, as amended (the "Internal Revenue Code").

i. Litigation and Proceedings. Except as set forth on Schedule 6.9
hereto, no litigation, proceeding or controversy before any court or
governmental agency is pending against CBI that in the opinion of its
management is likely to have a material and adverse effect on the business,
results of operations or financial condition of CBI and the Bank taken as a
whole, and, to the best of its knowledge, no such litigation, proceeding or
controversy has been threatened or is contemplated.

j. Brokers' or Finders' Fees. No agent, broker, investment banker,
investment or financial advisor or other person acting on behalf of CBI or the
Bank or under their authority is entitled to any commission, broker's or
finder's fee from any of the Parties hereto in connection with any of the
transactions contemplated by this Agreement.

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k. Contingent Liabilities. Except as disclosed on Schedule 6.11
hereto or as reflected in the CBI Financial Statements and except in the case
of the Bank for unfunded loan commitments made in the ordinary course of
business consistent with past practices, as of June 15, 1996, neither CBI nor
the Bank has any obligation or liability (contingent or otherwise) that was
material, or that when combined with all similar obligations or liabilities
would have been material, to CBI and the Bank taken as a whole and there does
not exist a set of circumstances resulting from transactions effected or events
occurring prior to, on, or after June 15, 1996, or from any action omitted to
be taken during such period that, to the knowledge of CBI, could reasonably be
expected to result in any such material obligation or liability.

l. Title to Assets; Adequate Insurance Coverage.

Except as described on Schedule 6.12:

i. As of June 15, 1996, CBI and the Bank had, and except with
respect to assets disposed of for adequate consideration
in the ordinary course of business since such date, now
have, good and merchantable title to all real property and
good and merchantable title to all other material
properties and assets reflected in the CBI Financial
Statements, free and clear of all mortgages, liens,
pledges, restrictions, security interests, charges and
encumbrances of any nature except for (i) mortgages and
encumbrances which secure indebtedness which is properly
reflected in the CBI Financial Statements or which secure
deposits of public funds as required by law; (ii) liens
for taxes accrued by not yet payable; (iii) liens arising
as a matter of law in the ordinary course of business with
respect to obligations incurred after June 15, 1996,
provided that the obligations secured by such liens are
not delinquent or are being contested in good faith; (iv)
such imperfections of title and encumbrances, if any, as
do not materially detract from the value or materially
interfere with the present use of any of such properties
or assets or the potential sale of any such owned
properties or assets; and (v) capital leases and leases,
if any, to third parties for fair and adequate
consideration. CBI and the Bank own, or have valid
leasehold interests in, all material properties and
assets, tangible or intangible, used in the conduct of its
business. Any real property and other material assets
held under lease by CBI or the Bank are held under valid,
subsisting and enforceable leases with such exceptions as
are not material and do not interfere with the use made or
proposed to be made by HHC in such lease of such property.

ii. With respect to each lease of any real property or a
material amount of personal property to which CBI or the
Bank is a party, except for financing leases in which CBI
or the Bank is lessor, (i) such lease is in full force and
effect in accordance with its terms; (ii) all rents and
other monetary amounts that have been due and payable
thereunder have been paid; (iii) there exists no default
or event, occurrence, condition or act which with the
giving of notice, the lapse of time or the happening of
any further event, occurrence, condition or act would
become a default under such lease; and (iv) the Mergers
will not constitute a default or a cause for termination
or modification of such lease.

iii. Neither CBI nor the Bank has any legal obligation,
absolute or contingent, to any other person to sell or
otherwise dispose of any substantial part of its assets or
to sell or dispose of any of its assets except in the
ordinary course of business consistent with past
practices.

iv. To the knowledge and belief of its management, the
policies of fire, theft, liability and other insurance
maintained with respect to the assets or businesses of CBI
and the Bank provide adequate coverage against loss and
the fidelity bonds in effect as to which CBI or the Bank
is named insured meet the applicable standards of the
American Bankers Association.

m. Liabilities. To the best of CBI's and Bank's and its officers'
and directors' knowledge, all liabilities of CBI and Bank were, and will be
created, for good, valuable and adequate consideration in accordance with
prudent business standards and in substantial compliance with all laws,
regulations and rules and the accounts or evidence of ownership of accounts are
and will be genuine, true, valid and enforceable in accordance with their
written terms. Neither CBI nor Bank has agreed to any modification or
extension of accounts or account terms or otherwise made any agreements
regarding such accounts except as disclosed in writing on the books and records
of CBI or Bank; and CBI and Bank have no knowledge of any claim of ownership to
any account other than as shown on the written ownership records of CBI and
Bank for each account, and CBI and Bank have no knowledge of any alleged
improper or wrongful withdrawal or payment of any such account.

n. Loans. To the best knowledge and belief of its management, each
loan reflected as an asset of CBI in the CBI Financial Statements, as of June
15, 1996, or acquired since that date, is the legal, valid, and binding
obligation of the obligor named therein, enforceable in accordance with its
terms, and no loan is subject to any asserted defense, offset or counterclaim
known to CBI, except as disclosed in writing to HHC on or prior to the date
hereof.

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o. Allowance for Loan Losses. The allowances for possible loan
losses shown on the consolidated balance sheets of CBI as of June 15, 1996 are
adequate in all material respects under the requirements of GAAP to provide for
possible losses, net of recoveries, relating to loans previously charged off,
on loans outstanding (including accrued interest receivable) as of June 15,
1996, and each such allowance has been established in accordance with GAAP.

p. Investments. Except for investments classified as
held-to-maturity as prescribed under the Financial Accounting Standards Board
Statement Number 115, and pledges to secure public or trust deposits, none of
the investments reflected in the CBI Financial Statements under the heading
"Investment Securities", and none of the investments made by CBI or the Bank
since June 15, 1996, and none of the assets reflected in the CBI Financial
Statements under the heading "Cash and Due From Banks," is subject to any
restriction, whether contractual or statutory, that materially impairs the
ability of CBI or the Bank freely to dispose of such investment at any time.
With respect to all repurchase agreements to which CBI or the Bank is a party,
CBI or the Bank, as the case may be, has a valid, perfected first lien or
security interest in the government securities or other collateral securing
each such repurchase agreement which equals or exceeds the amount of debt
secured by such collateral under such agreement.

q. Registration and Proxy Statements. None of the information
supplied or to be supplied by CBI for inclusion in (a) the Registration
Statement to be filed by HHC with the SEC (b) the Notice of Meeting and Proxy
Statement to be mailed by CBI and Bank to their stockholders in connection with
the meetings referred to in Section 5.4 hereof (the "Proxy Statement"), and (c)
any other documents to be filed with the SEC or any regulatory agency in
connection with the transactions contemplated hereby will, as amended or
supplemented at the time the Registration Statement is filed with the SEC or at
the time it becomes effective, at the time the Proxy Statement is mailed to
holders of CBI's and Bank's stock, as may be amended at the time of CBI and
Bank Stockholders' Meeting, and at the time of filing of such other documents,
respectively, contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. All documents, financial statements, or other information or
materials which CBI and Bank shall provide for filing with the SEC and any
regulatory agency in connection with the Mergers will comply with generally
accepted accounting principles.

r. Commitments and Contracts. Neither CBI nor Bank is a party or
subject to any of the following (whether written or oral, express or implied):

i. Except as listed on Schedule 6.18a attached hereto and
with a complete copy provided to HHC, any employment
contract (including any obligations with respect to
severance or termination pay liabilities or fringe
benefits) with any present or former officer, director,
employee or consultant (other than those which are
terminable at will by CBI or Bank);

ii. Except as listed on Schedule 6.18b attached hereto and
with a complete copy provided to HHC, any plan or contract
providing for any bonus, pension, option, deferred
compensation, retirement payment, profit sharing or
similar arrangement with respect to any present or former
officer, director, employee or consultant; or

iii. Any contract not made in the ordinary course of business
containing covenants which limit the ability of CBI or
Bank to compete in any line of business or with any person
or which involves any restriction of the geographical area
in which, or method by which, CBI or Bank may carry on its
respective business (other than as may be required by law
or applicable regulatory authorities).

s. Employee Plans. To the best of CBI's knowledge and belief, it,
the Bank, and all "employee benefit plans", as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), that
cover one or more employees employed by CBI or the Bank:

(1) is in compliance with all laws, regulations,
reporting and licensing requirements and orders
applicable to its business or to such plan or any
of its employees (because of such employee's
activities on behalf of it), the breach or
violation of which could have a material and
adverse effect on such business; and

(2) has received no notification from any agency or
department of federal, state or local government or
the staff thereof asserting that any such entity is
not in compliance with any of the statutes,
regulations or ordinances that such governmental
authority enforces, or threatening to revoke any
license, franchise,

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permit or governmental authorization, and is
subject to no agreement with any such governmental
authority with respect to its assets or business.

t. Plan Liability. Except for liabilities to the Pension Benefit
Guaranty Corporation pursuant to Section 4007 of ERISA, all of which have been
fully paid, and except for liabilities to the Internal Revenue Service under
Section 4971 of the Internal Revenue Code, all of which have been fully paid,
neither CBI nor the Bank has any liability to the Pension Benefit Guaranty
Corporation or to the Internal Revenue Service with respect to any pension plan
qualified under Section 401 of the Internal Revenue Code.

u. Vote Required. The affirmative vote of the holders of at least a
majority of the outstanding shares of CBI common stock actually cast, is the
only vote of the stockholders of CBI necessary to approve the Company Merger
and related transactions contemplated hereby. The affirmative vote of the
holders of at least two-thirds of the voting power present is the only vote of
the stockholders of Bank necessary to approve the Bank Merger and related
transactions contemplated hereby.

v. Continuity of Interest. To the best knowledge of CBI and Bank,
there is no plan or intention by the CBI or Bank shareholders who own 1% or
more of the CBI Common Stock or Bank Common Stock, and to the best of the
knowledge of management of CBI and Bank, there is no plan or intention on the
part of the remaining CBI or Bank shareholders to sell, exchange or otherwise
dispose of a number of shares of HHC Common Stock, to be received in the
Mergers that would reduce CBI or Bank stockholders' ownership of the HHC Common
Stock to a number of shares having a value, as of the date of the Mergers, of
less than 50% of the value of all of the formerly outstanding CBI or Bank
Common Stock as of the same date. For purposes of this representation, shares
of CBI or Bank Common Stock surrendered by dissenters or exchanged for cash in
lieu of fractional shares of CBI or Bank Common Stock will be treated as
outstanding CBI or Bank Common Stock on the date of the Mergers. Furthermore,
shares of CBI or Bank Common Stock and shares of HHC Common Stock held by CBI
or Bank stockholders and otherwise sold, redeemed, or disposed of prior to or
subsequent to the Mergers are considered in this assumption. See Exhibit D for
additional representations regarding continuity of shareholder interest under
Section 368(a)(1)(A) and Section 368(a)(2)(D) of the Internal Revenue Code of
1986, as amended.

w. Continuity of Business Enterprise. CBI operates at least one
significant historic business line, namely, financial services, and owns at
least a significant portion of its historic business assets within the meaning
of Treasury Regulation Section 1.368-1(d).

x. Environmental Matters. Except as set forth on Schedule 6.24;
neither CBI nor the Bank nor, to the best of their knowledge of CBI and the
Bank any previous owner or operator of any properties at any time owned
(including any properties owned or subsequently resold) leased, or occupied by
CBI or the Bank or used by CBI or the Bank in their respective business ("CBI
Properties") used, generated, treated, stored, or disposed of any hazardous
waste, toxic substance, or similar materials on, under, or about CBI Properties
except in compliance with all applicable federal, state, and local laws, rules
and regulations pertaining to air and water quality, hazardous waste, waste
disposal, air omissions, and other environmental matters ("Environmental
Laws"). Neither CBI nor the Bank has received any notice of noncompliance with
Environmental Laws, applicable laws, orders, or regulations of any governmental
authorities relating to waste generated by any such party or otherwise or
notice that any such party is liable or responsible for the remediation,
removal, or clean-up of any site relating to CBI Properties.

y. Accuracy of Information. To the best of CBI's and its officers'
and directors' knowledge, all information furnished by CBI or Bank to HHC and
Hancock Bank relating to the assets, liabilities, and this Agreement is
accurate, and CBI has not omitted to disclose any information which is or would
be material to this Agreement.

z. Compliance with Laws and Contracts. To the best of CBI's and its
officers' and directors' knowledge, neither CBI nor the Bank is in violation of
any laws, regulations, or agreements to which it is a party and have failed to
file any material reports required by any governmental or other regulatory
body.

7. HHC'S REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS

HHC represents and warrants to CBI as follows: for purposes of this
Agreement, except in Section 7.1 and where the context requires otherwise, any
reference to HHC in this Article 7 shall be deemed to include HHC and Hancock
Bank and any reference to "material", material adverse effect or a similar
standard shall refer to the financial condition, operations or other aspects of
HHC and its subsidiaries including Hancock Bank taken as a whole.

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a. Organization and Authority. Each of HHC and Hancock Bank is a
corporation or bank duly incorporated, validly existing and in good standing
under the laws of the State of Mississippi and Louisiana, respectively, and
has the corporate power and authority to own its properties and assets and to
carry on its business as it is now being conducted.

b. Shares Fully Paid and Non Assessable. The outstanding shares of
capital stock of HHC are validly issued and outstanding, fully paid and
nonassessable and all of such shares of Hancock Bank are owned directly or
indirectly by HHC free and clear of all liens, claims, and encumbrances. The
shares of HHC common stock to be issued in connection with the Mergers pursuant
to this Agreement have been duly authorized and, when issued in accordance with
the terms of this Agreement, will be validly issued, fully paid, and
nonassessable.

c. Authorization. The execution, delivery and performance of this
Agreement by HHC and the consummation of the transactions contemplated hereby
have been duly authorized by the Board of Directors of HHC and Hancock Bank,
subject to regulatory approval. No other corporate proceedings on the part of
HHC are necessary to authorize the execution and delivery of this Agreement and
the performance by HHC of the terms hereof. This Agreement is a valid and
binding obligation of HHC enforceable against HHC in accordance with its terms
except as may be limited by applicable bankruptcy, insolvency, reorganization
or moratorium or other similar laws affecting creditors' rights generally and
except that the availability of equitable remedies is within the discretion of
the appropriate court and except that it is subject to approval of applicable
regulatory agencies.

d. No Material Adverse Change. Since June 15, 1996, there has been
no event or condition of any character (whether actual, or to the knowledge of
HHC or Hancock Bank, threatened or contemplated) that has had or can reasonably
be anticipated to have, or that, if concluded or sustained adversely to HHC
would reasonably be anticipated to have, a material adverse effect on the
financial condition, results of operations, business or prospects of HHC or
Hancock Bank excluding changes in laws or regulations that affect banking
institutions generally.

e. Loans. To the best knowledge and belief of its management, and
management of Hancock Bank, each loan reflected as an asset of HHC in the
unaudited consolidated balance sheet contained in HHC's quarterly report to
shareholders for the period ended March 31, 1996, or acquired since that date,
is the legal, valid and binding obligation of the obligor named therein,
enforceable in accordance with its terms, and no loan is subject to any
asserted defense, offset, or counterclaim known to HHC, except as disclosed on
Schedule 7.5 hereto.

f. Litigation. Except as disclosed on Schedule 7.6 hereto, no
litigation, proceeding or controversy before any court or governmental agency
is pending that in the opinion of its management is likely to have a material
and adverse effect on the business, results of operations or financial
condition of HHC and its subsidiaries taken as a whole, and, to the best of its
knowledge, no such litigation, proceeding or controversy has been threatened or
is contemplated.

g. Contingent Liabilities. Except as disclosed on Schedule 7.7
hereto or reflected in the HHC reports filed with the SEC and except in the
case of HHC's subsidiaries for unfunded loan commitments made in the ordinary
course of business consistent with past practices, as of June 15, 1996, neither
HHC nor any of its subsidiaries had any obligation or liability (contingent or
otherwise) that was material, or that when combined with all similar
obligations or liabilities would have been material, to HHC and its
subsidiaries taken as a whole.

h. Allowances for Possible Loan Losses. The allowances for possible
loan losses shown on the balance sheet of HHC contained in the HHC reports
filed with the SEC as of June 30, 1996, were or will be, as the case may be,
adequate in all material respects under the requirements of GAAP to provide for
possible loan losses, net of recoveries relating to loans previously charged
off, on loans outstanding (including accrued interest receivable) as of the
respective date of such balance sheet and such allowance has been or will have
been established in accordance with GAAP. To the knowledge of HHC's and
Hancock Bank's management, HHC is not likely to be required to materially
increase the provision for loan losses between the date hereof and the
Effective Date.

i. Benefit Plans. To the knowledge and belief of HHC's senior
management, HHC, each of its subsidiaries and all "employee benefit plans," as
defined in Section 3(3) of ERISA, that cover one or more employees employed by
HHC or any of its subsidiaries:

(1) is in compliance with all laws, regulations,
reporting and licensing requirements and orders
applicable to its business or to such plan or any
of its employees (because such employee's
activities on behalf of it), the breach or
violation of which could have a material and
adverse effect on such business; and

(2) has received no notification from any agency or
department of federal, state or local government or
the staff thereof asserting that any such entity is
not in compliance with any of the statutes;
regulations or ordinances that such governmental
authority enforces, or threatening to revoke any
license, franchise

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or permit or governmental authorization, and is
subject to no agreement or written understanding
with any such governmental authorities with respect
to its assets or business.

HHC covenants and agrees as follows:

j. Conduct of Business. HHC agrees to operate its business solely
in the ordinary course consistent with prudent business practices and in
compliance with all applicable laws, regulations, and rules; but nothing herein
shall be construed as limiting or restricting HHC in its assets, liability, or
capital structure or limiting any action of HHC or its affiliates, nor shall
anything in this Agreement be construed as limiting the future number and
amount of outstanding shares of HHC stock pending settlement of this
transaction.

k. Due Diligence. In order to afford CBI access to such
information as it may reasonably deem necessary to perform its due diligence
review with respect to HHC and its assets in connection with the Mergers, HHC
shall (and shall cause Hancock Bank to), (a) upon reasonable notice, afford CBI
and its officers, employees, counsel, accountants and other authorized
representatives, during normal business hours throughout the period prior to
the Effective Date and to the extent consistent with applicable law, access to
its premises, properties, books and records, and to furnish CBI and such
representatives with such financial and operating data and other information of
any kind respecting its business and properties as CBI shall from time to time
reasonably request to perform such review, (b) furnish CBI with copies of all
reports filed by HHC with the Securities and Exchange Commission ("SEC")
throughout the period after the date hereof prior to the Effective Date
promptly after such reports are so filed, and (c) promptly advise CBI of the
occurrence before the Effective Date of any event or condition of any character
(whether actual or to the knowledge of HHC, threatened or contemplated) that
has had or can reasonably be anticipated to have, or that, if concluded or
sustained adversely to HHC, would reasonable be anticipated to have, a material
adverse effect on the financial condition, results of operations, business or
prospects of its consolidated group as a whole.

l. Registration of Stock. HHC agrees to register the shares to be
issued to CBI and Bank stockholders pursuant to this Agreement with the
Securities and Exchange Commission.

m. Continuity of Business Enterprise. It is the present intention
of HHC to continue at least one significant historic business line of CBI,
namely, financial services, and to use at least a significant portion of CBI's
historic business assets in a business within the meaning of Treasury
Regulation Section 1.368-1(d).

n. Retention of Insurance Policies. Hancock Bank agrees to assume
those certain life insurance policies numbered 6,066,672 and 6,065,901 issued
by Connecticut Mutual Life Insurance Company insuring the lives of Guy C.
Billups, Jr. and W. R. Allison, Sr., respectively.

8. CONDITIONS TO CLOSING

The obligations of CBI, Bank, HHC and Hancock Bank under this Agreement, except
as otherwise provided herein, shall be subject to the satisfaction or waiver of
the following conditions on or prior to the Closing:

a. Conditions to Each Party's Obligations to Effect the Mergers.
The respective obligation of each party to effect the Mergers shall be subject
to the following conditions:

i. Stockholder Approval. The Mergers shall have been
approved by the requisite vote of the holders of the
outstanding shares of CBI and Bank Common Stock at CBI's
and Bank's Stockholders' Meeting, respectively.

ii. Regulatory Approvals. The transactions contemplated by
this Agreement shall have been approved by all governing
regulatory authorities, without any condition or
requirement that either HHC or CBI deem burdensome, or
which otherwise would have a material adverse effect on
the business, operations, properties, assets or financial
condition of HHC, Hancock Bank, CBI or Bank after the
Effective Date, all conditions required to be satisfied
shall have been satisfied, and all waiting periods
relating to such approvals shall have expired.

iii. Registration Statement. The Registration Statement shall
have been declared effective and shall not be subject to a
stop order or any threatened stop order, and all state
securities and blue sky permits or approvals required to
consummate the transactions contemplated by this Agreement
shall have been received.

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iv. No Restraining Action. No action or proceeding shall have
been threatened or instituted before a court or other
governmental body to restrain or prohibit the transactions
contemplated by the Merger Agreements or this Agreement or
to obtain damages or other relief in connection with the
execution of such agreements or the consummation of the
transactions contemplated hereby or thereby; and no
governmental agency shall have given notice to any party
hereto to the effect that consummation of the transactions
contemplated by the Merger Agreements or this Agreement
would constitute a violation of any law or that it intends
to commence proceedings to restrain consummation of the
Mergers.

b. Conditions to Obligations of CBI to Effect the Mergers. The
obligations of CBI to effect the Mergers shall be subject to the following
additional conditions:

i. Representations and Warranties. The representations and
warranties of HHC set forth in this Agreement shall be
true and correct in all material respects as of the date
of this Agreement and as of the Closing as though made at
and as of the Closing, except as otherwise contemplated by
this Agreement or consented to in writing by CBI.

ii. Performance of Obligations. HHC and Hancock Bank shall
have performed in all material respects all obligations
and complied with all covenants required by it under this
Agreement prior to the Closing and HHC shall deliver at
Closing appropriate certificates setting forth such.

iii. No Material Adverse Change. There shall not have occurred
any material adverse change from the date of this
Agreement to the Closing Date in the financial condition,
results of operations or business of HHC and its
subsidiaries taken as a whole.

iv. Legal Opinion. An opinion of Watkins Ludlam & Stennis,
P.A., special counsel to HHC, shall be delivered to CBI
dated the Closing Date and in form and substance
reasonably satisfactory to CBI and its counsel to the
effect that:

(a) HHC is a corporation duly incorporated,
validly existing and in good standing under
the laws of the State of Mississippi, and
has corporate authority to own and operate
its businesses and properties and to carry
on its business as presently conducted by
it;

(b) Hancock Bank is a Louisiana banking
corporation, duly organized and validly
existing and in good standing under the laws
of the State of Louisiana, and has corporate
authority to own and operate its businesses
and properties and to carry on its business
as presently conducted by it;

(c) HHC had and has corporate authority to make,
execute and deliver this Agreement, it has
been duly authorized and approved by all
necessary corporate action of HHC and has
been duly executed and delivered and is as
of the Closing Date its valid and binding
obligation subject, however, to bankruptcy,
insolvency and similar laws affecting the
enforcement of creditors' rights generally
and to the availability of equitable
remedies in general;

(d) All required regulatory approvals have been
obtained;

(e) To such counsel's knowledge after inquiry,
there is no litigation or proceeding pending
or threatened against HHC relating to the
participation in or consummation of this
Agreement by HHC and consummation will not
violate any other contract, agreement,
charter or bylaw of HHC; and

(f) All shares of HHC Common Stock to be issued
pursuant to the Mergers have been duly
authorized and, when issued pursuant to the
Merger Agreements, will be validly and
legally issued, fully paid and non-
assessable and will be, at the time of their
delivery, free and clear of all liens,
charges, security interests,

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<PAGE> 107
mortgages, pledges and other encumbrances
and any preemptive or similar rights.

v. Tax Opinion. CBI shall have received from Watkins Ludlam
& Stennis, P.A. an opinion of counsel as to certain tax
aspects of the transactions contemplated by this Agreement
and the Merger Agreements.

c. Conditions to Obligations of HHC to Effect the Mergers. The
obligations of HHC to effect the Mergers shall be subject to the following
additional conditions:

i. Representations and Warranties. The representations and
warranties of CBI and Bank set forth in this Agreement
shall be true and correct in all material respects as of
the date of this Agreement and as of the Closing as though
made at and as of the Closing, except as otherwise
contemplated by this Agreement or consented to in writing
by HHC.

ii. Performance of Obligations. CBI and Bank shall have
performed in all material respects all obligations and
complied with all covenants required by it under this
Agreement prior to the Closing and CBI shall deliver at
Closing appropriate certificates setting forth such.

iv. Legal Opinion. An Opinion of John I. Feduccia, Esquire,
counsel to CBI, shall be delivered to HHC dated the
Closing Date, and in form and substance reasonably
satisfactory to HHC to the effect that:

(a) CBI is a corporation duly incorporated,
validly existing and in good standing under
the laws of the State of Louisiana, and has
corporate authority to own and operate its
businesses and properties and to carry on
its business as presently conducted by it;

(b) Bank is a Louisiana banking corporation,
duly organized and validly existing and in
good standing under the laws of the State of
Louisiana, and has corporate authority to
own and operate its businesses and
properties and to carry on its business as
presently conducted by it;

(c) CBI and Bank had and have corporate
authority to make, execute and deliver this
Agreement, it has been duly authorized and
approved by all necessary corporate action
of CBI and Bank and has been duly executed
and delivered and is as of the Closing Date
its valid and binding obligation subject,
however, to bankruptcy, insolvency and
similar laws affecting the enforcement of
creditors' rights generally and to the
availability of equitable remedies in
general;

(d) To such counsel's knowledge after inquiry,
there is no litigation or proceeding pending
or threatened against CBI or Bank relating
to the participation in or consummation of
this Agreement by CBI or Bank and
consummation will not violate any other
contract, agreement, charter or bylaw of CBI
or Bank; and

(e) CBI and Bank have complied with all laws and
regulations relating to dissenters' rights
and all stock in CBI and Bank will be
acquired by HHC pursuant to the terms of
this Agreement and that the title and/or
ownership interest in the shares of CBI and
Bank stock are as represented in CBI's and
Bank's certificate at Closing and that no
known dispute exists as to the title and/or
ownership of any such shares.

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<PAGE> 108
9. CLOSING

a. Closing. The Closing shall be held at the offices of Hancock
Bank or such other place as HHC and CBI shall mutually designate.

b. Deliveries at Closing. At the Closing, all documents and
instruments shall be duly and validly executed and delivered by all the Parties
hereto, and possession of all liabilities and assets shall be transferred and
delivered accordingly.

c. Documents. The Parties shall execute any and all documents
reasonably requested by them or their legal counsel for the purpose of
effecting the transaction contemplated, including but not limited to the
following:

i. endorsement, negotiation, and/or assignment of all
original notes and Security Agreements relating to all
loans;

ii. warranty deeds for the real property;

iii. commitments for owners title insurance for the real
property;

iv. such other endorsements, assignments or other conveyances
as may be appropriate or necessary to effect the transfer
to HHC of the assets, duties, responsibilities and
obligations as referred to herein; and

v. listing of dissenting stockholders, if any, including
name, address, and number of shares owned.

10. EMPLOYMENT MATTERS

a. Employees. Neither HHC nor Hancock Bank shall be obligated to
retain in any capacity any of CBI's or Bank's officers, directors, or employees
or to pay any stipulated compensation to any employees. HHC will make
reasonable efforts to maintain compensation levels for any retained personnel
commensurate with the employees' experience and qualifications, and in
accordance with HHC and Hancock Bank's salary administration program. With
regard to any retained employee, HHC and Hancock Bank shall be free of any
obligation to honor any past agreement of CBI or Bank to such person.

CBI's and Bank's group health and life benefit plan will be continued
through the Effective Date of the Mergers. Thereafter, all retained employees
will be eligible to participate in Hancock Bank's group health and life benefit
plan based on the provisions in the plan. The ninety (90) day employment
period will be waived for eligible retained employees in accordance with
Hancock Bank's plan. Hancock Bank will waive pre-existing medical conditions
for health insurance purposes as to all retained personnel.

b. Retirement Plan. CBI and Bank currently maintain a 401K Plan
through First National Bank of Commerce, New Orleans, Trust Department which
will remain operative and in effect through the Effective Date of the Mergers
(the "Plan"). The Plan will be terminated as of the Effective Date of the
Mergers and distributed to vested employees of CBI and Bank in accordance with
the terms of the Plans after the normal and customary contributions have been
made consistent with past practices. The trustees for the Plan will be
responsible for the termination, allocation and distribution of plan assets and
related notices and other reporting responsibilities to the IRS, Department of
Labor and other government agencies. All such termination costs will be paid
from the Plan's assets.

Upon the Effective Date of the Mergers, all retained employees will be
eligible to enter the Hancock Bank Profit Sharing Plan, Hancock Bank 401-K
Plan, and Hancock Bank Pension Plan based on the provisions set forth in the
respective plans. All retained employees will be granted full credit for all
prior service for vesting, eligibility and benefit purposes for the Hancock
Bank Profit Sharing Plan, for eligibility purposes for the Hancock Bank 401-K
Plan, and for vesting and eligibility purposes for the Hancock Bank Pension
Plan.

c. Other Benefit Plans. Other CBI and Bank benefit plans will
continue through the Effective Date of the Mergers. Thereafter, all retained
employees will be eligible to participate in all Hancock Bank employment
benefit plans not set forth in Sections 10.1 and 10.2 hereof, based on the
provisions set forth in the plans with full credit for all prior service.

d. Notices. CBI shall be (and shall cause Bank to be) responsible
for notifying its employees of the terms of this Agreement as it affects and/or
relates to them and for complying with any applicable laws regarding such
notices.

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11. REMEDIES

For purposes of this Agreement, any reference to HHC in this Article 11
shall be deemed to include HHC and Hancock Bank and any reference to CBI in
this Article 11 shall be deemed to include CBI and Bank.

a. Parties' Joint Remedies. In the event regulatory authorities
impose requirements which do not materially alter this Agreement and which are
not otherwise burdensome or objectionable to the Parties, then the Parties
agree to amend this Agreement to conform to such regulatory requirements, and
specific performance shall be available as a remedy for this purpose.

b. CBI's Remedies. In the event HHC breaches this Agreement, then
CBI shall give HHC notice of the breach, and HHC shall have a reasonable amount
of time to cure the breach, and HHC shall be liable for such economic damages
that are the direct result of any uncured breach, but HHC shall not be liable
for consequential or punitive damages. If HHC breaches a warranty,
representation, covenant or agreement that does not materially affect the
entire transaction, then the amount of the damages shall be mutually agreed
upon by the Parties, and if they cannot agree as to the damage, then by an
arbitrator mutually agreeable to them, and the damage determined shall be
conclusively binding on both Parties and shall be treated as an adjustment to
the Conversion Amount.

c. HHC's Remedies. In the event CBI breaches this Agreement, then
HHC shall give CBI notice of the breach, and CBI shall have a reasonable amount
of time to cure the breach, and CBI shall be liable for such economic damages
that are the direct result of any uncured breach, but CBI shall not be liable
for consequential or punitive damages. If CBI breaches a warranty,
representation, covenant or agreement that does not materially affect the
entire transaction, then the amount of the damages shall be mutually agreed
upon by the Parties, and if they cannot agree as to the damage, then by an
arbitrator mutually agreeable to them, and the damage determined shall be
conclusively binding on both Parties and shall be treated as an adjustment to
the CBI Exchange Ratio and/or Bank Exchange Ratio.

d. Attorney Fees. Each Party shall bear its own attorney fees
except attorney fees may be awarded by the presiding judge if the trier of fact
finds that the other Party has committed fraud against the other Party.

12. TERMINATION

a. Termination. This Agreement may be terminated, either before or
after approval by the stockholders of CBI and Bank as follows:

i. Mutual Consent. At any time on or prior to the Effective
Date, by the mutual consent in writing of a majority of
the members of each of the Board of Directors of the
Parties hereto;

ii. Expiration of Time. By the Board of Directors of HHC in
writing or by the Board of Directors of CBI in writing, if
the Mergers shall have not become effective on or before
December 31, 1996, unless the absence of such occurrence
shall be due to the failure of the Party seeking to
terminate this Agreement to perform each of its
obligations under this Agreement required to be performed
by it on or prior to the Effective Date;

iii. Breach of Representation, Warranty or Covenant. By either
Party hereto, in the event of a breach by the other Party
(a) of any covenant or agreement contained herein or (b)
of any representation or warranty herein, if (i) the facts
constituting such breach reflect a material and adverse
change in the financial condition, results of operations,
business, or prospects taken as a whole, of the breaching
Party, which in either case cannot be or is not cured
within 60 days after written notice of such breach is
given to the Party committing such breach, or (ii) in the
event of a breach of a warranty or covenant, such breach
results in a material increase in the cost of the
non-breaching Party's performance of this Agreement.

iv. Regulatory Approval. By either Party hereto, at any time
after the FRB, FDIC, or OFI has denied any application for
any approval or clearance required to be obtained as a
condition to the consummation of the Mergers and the
time-period for all appeals or requests for
reconsideration thereof has run.

v. Shareholder Approval. By either Party hereto, if the
Company Merger is not approved by the required vote of
shareholders of CBI or the Bank Merger is not approved by
the required vote of shareholders of Bank.

vi. Dissenters. By HHC, if holders of ten percent (10%) or
more of the outstanding CBI common stock exercise
statutory rights of dissent and appraisal pursuant to Part
XIII of the LCL.

A-17
<PAGE> 110
13. APPRAISAL RIGHTS

a. Appraisal Rights of CBI. Notwithstanding any other provision of
this Agreement to the contrary, dissenting stockholders of CBI who comply with
the procedural requirements of the LCL Section 12:131 will be entitled to
receive payment of the fair cash value of their shares if the Company Merger is
effected upon approval by less than eighty percent of CBI's total voting power.

b. Appraisal Rights of Bank. Notwithstanding any other provision of
this Agreement to the contrary, dissenting stockholders of Bank who comply with
the procedural requirements of the LBL Section 6:376 will be entitled to
receive payment of the fair cash value of their shares if the Bank Merger is
effected upon approval by less than eighty percent of Bank's total voting
power.

14. MISCELLANEOUS

a. Entire Agreement. This Agreement embodies the entire
understanding of the Parties in relation to the subject matter herein and
supersede all prior understandings or agreements, oral or written, between the
Parties hereto.

b. Survival of Representations, Warranties and Agreements. The
representations, warranties and agreements made herein shall survive the
Closing.

c. Headings. The headings and subheadings in this Agreement, except
the terms identified for definition in Article 1 and elsewhere in this
Agreement, are inserted for convenience only and shall not affect the meaning
or interpretation of this Agreement or any provision hereof.

d. Duplicate Originals. This Agreement may be executed in any
number of duplicate originals, any one of which when fully executed by all
Parties shall be deemed to be an original without having to account for the
other originals.

e. Governing Law. This Agreement and the rights and obligations
hereunder shall be governed and construed by the laws of the State of
Louisiana.

f. Successors: No Third Party Beneficiaries. All terms and
conditions of this Agreement shall be binding on the successors and assigns of
CBI and HHC. Except as otherwise specifically provided in this Agreement,
nothing expressed or referred to in this Agreement is intended or shall be
construed to give any person other than CBI and HHC any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provisions
contained herein, it being the intention of the Parties hereto that this
Agreement, the obligations and statements of responsibilities hereunder, and
all other conditions and provisions hereof are for the sole and exclusive
benefit of CBI and HHC and for the benefit of no other person.

g. Modification; Assignment. No amendment or other modification of
any part of this Agreement shall be effective except pursuant to a written
agreement subscribed by the duly authorized representatives of all of the
Parties hereto. This Agreement may not be assigned without the express written
consent of both Parties.

h. Notice. Any notice, request, demand, consent, approval or other
communication to any Party hereof shall be effective when received and shall be
given in writing, and delivered in person against receipt thereof, or sent by
certified mail, postage prepaid or courier service at its address set forth
below or at such other address as it shall hereafter furnish in writing to the
others. All such notices and other communications shall be deemed given on the
date received by the addressee or its agent.

CBI

Community Bancshares, Inc.
203 N. Railroad Avenue
Independence, Louisiana 70443-9101
Attn: Mr. William R. Allison, Sr., Senior Vice-President

Copy to: John I. Feduccia, Esquire
Attorney at Law
123 South Oak
Hammond, LA 70401

A-18
<PAGE> 111
HHC

Hancock Holding Company
Post Office Box 4019
Gulfport, MS 39502
Attn: Mr. George A. Schloegel, Vice Chairman

Copy to: Carl J. Chaney, Esquire
Watkins Ludlam & Stennis, P.A.
P. O. Box 427
Jackson, MS 39205-0427
or
633 North State Street
Jackson, Mississippi 39202

i. Waiver. CBI and HHC may waive their respective rights, powers or
privileges under this Agreement; provided that such waiver shall be in writing;
and further provided that no failure or delay on the part of CBI or HHC to
exercise any right, power or privilege under this Agreement will operate as a
waiver thereof, nor will any single or partial exercise of any right, power or
privilege under this Agreement preclude any other or further exercise thereof
or the exercise of any other right, power or privilege by CBI or HHC under the
terms of this Agreement, nor will any such waiver operate or be construed as a
future waiver of such right, power or privilege under this Agreement.

j. Costs, Fees and Expenses. Each Party hereto agrees to pay all
costs, fees and expenses which it has incurred in connection with or incidental
to the matters contained in this Agreement, including without limitation any
fees and disbursements to its accountants and counsel. HHC will be responsible
for preparing the applications, regulatory filings and registration statement
necessary to obtain approval of the Mergers and the issuance of the HHC common
stock. CBI will be responsible for the cost of its (and Bank's) accountants
and legal counsel and will bear all costs related to conducting its
stockholders' meetings and obtaining stockholders' approval of the Mergers.

k. Press Releases. CBI and HHC shall consult with each other as to
the form and substance of any press release related to this Agreement or the
transactions contemplated hereby, and shall consult each other as to the form
and substance of other public disclosures related thereto, provided, however,
that nothing contained herein shall prohibit HHC, following notification to
CBI, from making any disclosures which its counsel deems necessary to conform
with requirements of law or the rules of the National Association of Securities
Dealers Automated Quotation System.

l. Severability. If any provision of this Agreement is invalid or
unenforceable then, to the extent possible, all of the remaining provisions of
this Agreement shall remain in full force and effect and shall be binding upon
the Parties hereto.

m. Mutual Covenant of Best Efforts and Good Faith. The Parties
mutually covenant and agree with each other that they will use their best
efforts to consummate the transactions herein contemplated and that they will
act and deal with each other in good faith as to this Agreement and all matters
arising from or related to it.

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the date first above
written.

COMMUNITY BANCSHARES, INC.

By:/s/ Terrell A. Adams
-----------------------------------------
Name: TERRELL A. ADAMS
Attest: Title: PRESIDENT & CEO

/S/ William R. Allison,, Sr.
- ------------------------------
WILLIAM R. ALLISON, SR.
SENIOR VICE-PRESIDENT

A-19
<PAGE> 112
HANCOCK HOLDING COMPANY

By:/s/ Leo W. Seal, Jr.
------------------------------------------
Name: LEO W. SEAL, JR.
Title: PRESIDENT & CEO
Attest:

/s/ George A. Schloegel
- ------------------------------
GEORGE A. SCHLOEGEL
VICE CHAIRMAN

COMMUNITY STATE BANK

By:/s/ Terrell A. Adams
------------------------------------------
Name: TERRELL A. ADAMS
Title: PRESIDENT & CEO
Attest:

/s/ William A. Allison, Sr.
- ------------------------------
WILLIAM A. ALLISON, SR.
SENIOR VICE-PRESIDENT

HANCOCK BANK OF LOUISIANA

By:/s/ A. Bridger Eglin
------------------------------------------
Name: A. BRIDGER EGLIN
Title: PRESIDENT
Attest:

/a/ Robert E. Easterly
- ------------------------------

A-20
<PAGE> 113
EXHIBIT A

COMPANY MERGER AGREEMENT

This Company Merger Agreement is made and entered into as of the 19th
day of June, 1996, between Hancock Holding Company, Gulfport, Mississippi, a
Mississippi corporation ("HHC") and Community Bancshares, Inc., Independence,
Louisiana, a Louisiana corporation ("CBI") (the "Company Merger Agreement").

W I T N E S S E T H:

WHEREAS, HHC and CBI (collectively, the "Constituent Corporations") and
their respective Boards of Directors deem it advisable that CBI be merged into
HHC (the "Company Merger") pursuant to the provisions of the Louisiana Business
Corporation Law and upon the terms and conditions hereinafter set forth and in
the Plan (as hereinafter defined); and

WHEREAS, the Constituent Corporations have entered into an Agreement and
Plan of Reorganization dated as of the date hereof (the "Plan") (the defined
terms in which are used herein as defined therein) setting forth certain
representations, warranties, covenants and conditions relating to the Company
Merger;

NOW THEREFORE, the Constituent Corporations hereby make, adopt and
approve this Company Merger Agreement and prescribe the terms and conditions of
the Company Merger and the mode of carrying the Company Merger into effect as
follows:

ARTICLE ONE

The Company Merger

Upon the terms and subject to the conditions hereinafter set forth, on
the Effective Date (as defined in Article Two hereof) CBI shall be merged into
HHC and the separate existence of CBI shall cease.

ARTICLE TWO

Effective Date and Time

The Company Merger shall be effective as of the date and time when this
Company Merger Agreement, having been certified, signed and acknowledged in the
manner required by law, is filed in the office of the Secretary of State of
Louisiana (such time and date being herein referred to as the "Effective Time"
and the "Effective Date", respectively).

ARTICLE THREE

Conversion and Cancellation of Shares

Except for shares as to which dissenters' rights have been perfected and
not withdrawn or otherwise forfeited under Section 12:131 of the Louisiana
Business Corporation Law, on the Effective Date each issued and outstanding
share of CBI Common Stock, par value $5.00 shall be exchanged for and converted
into the right to receive 5.0721 shares of HHC Common Stock, par value $3.33,
and $61.7107 in cash, provided however, each holder of 25 or fewer shares of
CBI Common Stock shall not receive HHC Common Stock but rather shall be
entitled to receive $246.8428 for each share of CBI Common Stock. The exchange
of certificates representing HHC Common Stock for certificates formerly
representing CBI Common Stock shall be effected as provided in the Plan. No
fractional shares of HHC Common Stock representing such fractional shares will
be issued to the holders of CBI Common Stock. Instead, a shareholder otherwise
entitled to receive such fractional shares shall be entitled to a cash payment
(without interest) as provided in the Plan.

ARTICLE FOUR

Effects of Company Merger

The Company Merger shall have the effects set forth in Section 12:115 of
the Louisiana Business Corporation Law.

Aa-1
<PAGE> 114
ARTICLE FIVE

Filing of Company Merger Agreement

If this Company Merger Agreement is approved by the shareholders of CBI,
then the fact of such approval shall be certified hereon by the Secretary or
Assistant Secretary of CBI, and this Company Merger Agreement, as approved and
certified, shall be signed and acknowledged by the President or Vice President
of each of the Constituent Corporations. Thereafter, a multiple original of
this Company Merger Agreement, so certified, signed and acknowledged, shall be
delivered to the Secretary of State of Louisiana for filing and recordation in
the manner required by law; and thereafter, as soon as practicable (but not
later than the time required by law), a copy of the Certificate of Merger
issued by the Secretary of State of Louisiana shall be filed for record in the
office of the recorder of mortgages for the parishes of Tangipahoa and East
Baton Rouge and shall also be recorded in the conveyance records for the
parishes of Tangipahoa and East Baton Rouge and any other parish in which any
of the Constituent Corporations owns real property on the Effective Date of the
Company Merger.

ARTICLE SIX

Miscellaneous

The obligations of the Constituent Corporations to effect the Company
Merger shall be subject to all of the terms and conditions of the Plan. At any
time prior to the Effective Date, this Company Merger Agreement may be
terminated (a) by the mutual agreement of the Boards of Directors of the
Constituent Corporations or (b) pursuant to the terms and provisions of the
Plan.

IN WITNESS WHEREOF, this Company Merger Agreement is signed by a
majority of the Directors of each of the Constituent Corporations as of the day
first above written.

COMMUNITY BANCSHARES, INC.
By a Majority of its Board of Directors

/s/ Joseph J. Biundo, Jr.
----------------------------------------------------------

/s/ Guy Billups, III
----------------------------------------------------------

/s/ C. R. Genovese, M.D.
----------------------------------------------------------

/s/ Charles Anzalone, Jr.
----------------------------------------------------------

/s/ Richard S. Sanders
----------------------------------------------------------

/s/ Ann D. Biundo
----------------------------------------------------------

/s/ Rene J. C. Tricou, Jr.
----------------------------------------------------------

/s/ R. E. L. Stuart, Jr.
----------------------------------------------------------

/s/ Glenn F. Tycer, Jr.
----------------------------------------------------------

/s/ Terrell A. Adams
----------------------------------------------------------

/s/ Guy C. Billups, Jr.
----------------------------------------------------------

/s/ W. R. Allison
----------------------------------------------------------

(consisting of a majority of its Directors)
----------------------------------------------------------

Aa-2
<PAGE> 115

HANCOCK HOLDING COMPANY
By a Majority of its Board of Directors

---------------------------------------------------

/s/ Charles H. Johnson
---------------------------------------------------

/s/ Leo W. Seal, Jr.
---------------------------------------------------

/s/ L. A. Koenenn
---------------------------------------------------

/s/ George A. Schloegel
---------------------------------------------------

/s/ James B.Estabrook, Jr.
---------------------------------------------------

/s/ H. C. Moody, Jr.
---------------------------------------------------

/d/ Victor Mavar
---------------------------------------------------

(consisting of a majority of its Directors)
---------------------------------------------------

Aa-3
<PAGE> 116
EXHIBIT B

BANK MERGER AGREEMENT

This Bank Merger Agreement is made and entered into as of the 19th day
of June, 1996, between Hancock Bank of Louisiana, Baton Rouge, Louisiana, a
Louisiana banking corporation ("Hancock Bank") and Community State Bank,
Independence, Louisiana, a Louisiana banking corporation ("Bank") (the "Bank
Merger Agreement").

WITNESSETH:

WHEREAS, Hancock Bank and Bank (collectively, the "Constituent Banks")
and their respective Boards of Directors deem it advisable that Bank be merged
into Hancock Bank (the "Bank Merger") pursuant to the provisions of the
Louisiana Banking Laws and upon the terms and conditions hereinafter set forth
and in the Plan (as hereinafter defined); and;

NOW THEREFORE, the Constituent Banks hereby make, adopt and approve this
Merger Agreement and prescribe the terms and conditions of the Bank Merger and
the mode of carrying the Bank Merger into effect as follows:

ARTICLE ONE

The Bank Merger

Upon the terms and subject to the conditions hereinafter set forth, on
the Effective Date (as defined in Article Two hereof) Bank shall be merged into
Hancock Bank and the separate existence of Bank shall cease.

ARTICLE TWO

Effective Date and Time

The Bank Merger shall be effective no earlier than the latter of: (a)
the date and time specified or permitted by the Louisiana Office of Financial
Institutions ("OFI") in a Certificate of Merger or other written record issued
by the OFI; or (b) fifteen (15) days after the time specified in the
certificate to be issued by the Federal Deposit Insurance Corporation under its
seal approving the Bank Merger, such date to be determined by resolution of the
Board of Directors of Hancock Bank (such time and date being herein referred to
as the "Effective Time" and the "Effective Date", respectively).

ARTICLE THREE

Conversion and Cancellation of Shares

Except for shares as to which dissenters' rights have been perfected and
not withdrawn or otherwise forfeited under Section 6:376 of the Louisiana
Banking Laws, on the Effective Date each issued and outstanding share of Bank
Common Stock, par value $5.00, other than the Bank Common Stock held by
Community Bancshares, Inc., shall be exchanged for and converted into the
right to receive 6.2458 shares of HHC Common Stock, par value $3.33 and
$75.9904 in cash, provided however, each holder of 25 or fewer shares of Bank
Common Stock shall not receive HHC Common Stock but rather shall be entitled to
receive $303.9616 for each share of Bank Common Stock. The exchange of
certificates representing HHC Common Stock for certificates formerly
representing Bank Common Stock shall be effected as provided in the Plan. No
fractional shares of HHC Common Stock representing such fractional shares will
be issued to the holders of Bank Common Stock. Instead, a shareholder otherwise
entitled to receive such fractional shares shall be entitled to a cash payment
(without interest) as provided in the Plan.

Ab-1
<PAGE> 117
ARTICLE FOUR

Effects of Bank Merger

The Bank Merger shall have the effects set forth in Section 6:355 of the
Louisiana Banking Laws. Upon the Effective Date, each branch office maintained
by Bank as a branch office immediately before the Bank Merger becomes
effective, shall become a branch office of Hancock Bank.

ARTICLE FIVE

Filing of Merger Agreement

If this Merger Agreement is approved by the shareholders of Bank and
Hancock Bank, then the fact of such approval shall be certified hereon by the
Secretary or Assistant Secretary of the Constituent Banks, and this Merger
Agreement, as approved and certified, shall be signed and acknowledged by the
President or Vice President of each of the Constituent Banks. Thereafter, a
multiple original of this Merger Agreement, so certified, signed and
acknowledged, shall be delivered to the OFI for filing and recordation in the
manner required by law; and thereafter, as soon as practicable (but not later
than the time required by law), a copy of the Certificate of Merger issued by
the OFI shall be filed for record in the office of the recorder of mortgages
for the parishes of Tangipahoa and East Baton Rouge and shall also be recorded
in the conveyance records for the parishes of Tangipahoa and East Baton Rouge
and any other parish in which any of the Constituent Banks owns real property
on the Effective Date of the Bank Merger.

ARTICLE SIX

Miscellaneous

The obligations of the Constituent Banks to effect the Bank Merger shall
be subject to all of the terms and conditions of the Plan. At any time prior to
the Effective Date, this Bank Merger Agreement may be terminated (a) by the
mutual agreement of the Boards of Directors of the Constituent Banks or (b)
pursuant to the terms and provisions of the Plan.

IN WITNESS WHEREOF, this Bank Merger Agreement is signed by a majority
of the Directors of each of the Constituent Banks as of the day first above
written.

HANCOCK BANK OF LOUISIANA
BY A MAJORITY OF ITS BOARD OF DIRECTORS

/s/ Richard M. Hill
--------------------------------------------

/s/ J. B. Olinde
--------------------------------------------

/s/ J. R. Tarajano, Sr.
--------------------------------------------

/s/ Bruce Easterly
--------------------------------------------

/s/ John H. Pace
--------------------------------------------

/s/ George A. Schloegel
--------------------------------------------

/s/ Charles A. Webb, Jr.
--------------------------------------------

/s/ A. Bridger Eglin
--------------------------------------------

(consisting of a majority of its Directors)
--------------------------------------------

Ab-2
<PAGE> 118

COMMUNITY STATE BANK
BY A MAJORITY OF ITS BOARD OF DIRECTORS

/s/ Joseph J. Biundo, Jr.
--------------------------------------------

/s/ Guy Billups, III
--------------------------------------------

/s/ Charles R. Genovese, M.D.
--------------------------------------------

/s/ Charles Anzalone, Jr.
--------------------------------------------

/s/ Richard S. Sanders
--------------------------------------------

/s/ Ann D. Biundo
--------------------------------------------

/s/ Rene J. C. Tricou, Jr.
--------------------------------------------

/s/ R. E. L. Stuart, Jr.
--------------------------------------------

/s/ Glenn F. Tycer, Jr.
--------------------------------------------

/s/ Terrell A. Adams
--------------------------------------------

/s/ Guy C. Billups, Jr.
--------------------------------------------

/s/ W. R. Allison.
--------------------------------------------

consisting of a majority of its Directors)
--------------------------------------------

Ab-3
<PAGE> 119
EXHIBIT C

AFFILIATES AGREEMENT

DATE

Hancock Holding Company
One Hancock Plaza
Gulfport, Mississippi 39502

Gentlemen:

This letter agreement is given in connection with the closing of the
proposed merger of Community Bancshares, Inc. ("CBI") (the "Mergers") with and
into Hancock Holding Company ("HHC") and the proposed merger of Community State
Bank ("Bank") with and into Hancock Bank of Louisiana ("Hancock Bank"). I am
aware and acknowledge that, as a member of the Board of Directors or an
executive officer or the beneficial owner of a substantial amount of the
outstanding common stock of CBI or its subsidiary, Bank, I may be an
"affiliate" of CBI as that term is defined in the Securities Act of 1933 (the
"Securities Act") and the rules and regulations thereunder.

I understand that resales or other dispositions of shares of the Common
Stock, $3.33 par value, of HHC (the "HHC Common Stock") to be acquired by me as
a result of the Mergers may be governed by Rules 144 and 145 promulgated under
the Securities Act.

I have no plan or intention to sell, exchange, transfer by gift or
otherwise dispose of a number of said securities to be received in the Mergers
that would reduce CBI stockholders' ownership of the HHC Common Stock to a
number of shares having a value, as of the date of the Mergers, of less than
50% of the value of all of the formerly outstandingCBI Common Stock as of the
same date.

I understand that the certificates for shares of HHC received pursuant
to the Mergers will bear a restrictive legend, to the effect that the shares
were received in a transaction to which Rule 145 applies, as follows:

"The shares represented by this certificate have been issued or
transferred to the registered holder as a result of a transaction to
which Rule 145 under the Securities Act of 1933 (the "Act") applies.
The shares represented by this certificate may not be sold, assigned or
otherwise disposed of, and the issuer shall not be required to give
effect to any attempted sale, transfer or assignment, except in
accordance with the requirements of the Act and the other conditions
specified in that certain Affiliates Agreement, dated as of
_________________________, 1996 between the issuer and the shareholder,
a copy of which Agreement will be furnished, without charge, by Hancock
Holding Company to the holder of this certificate upon written request
therefor."

On the basis of the foregoing, and in consideration of the delivery to
me of the HHC Common Stock into which my CBI Common Stock will be converted, I
agree that I will not, directly or indirectly, sell, exchange, transfer by gift
or otherwise dispose of any of the HHC Common Stock held by me in violation of
the Securities Act or the rules or regulations promulgated thereunder.

Sincerely,

Ac-1
<PAGE> 120
EXHIBIT D

TAX CERTIFICATE

CERTIFICATE OF HANCOCK HOLDING COMPANY AND
COMMUNITY BANCSHARES, INC.
RELATING TO SECTION 368 OPINION ON THE COMPANY MERGER

This Certificate has been requested by the law firm of Watkins Ludlam &
Stennis, P.A. in connection with the rendering of its opinion as to certain
federal income tax consequences relating to the merger of Community Bancshares,
Inc. ("CBI") with and into Hancock Holding Company ("HHC") (the "Company
Merger") as such transaction is described in that certain Agreement and Plan of
Reorganization by and between CBI, Community State Bank ("Bank") Hancock Bank
of Louisiana ("Hancock Bank") and HHC, dated as of June 19, 1996 (the "Merger
Agreement"). Watkins Ludlam & Stennis, P.A. will rely on the representations
stated hereinafter, as well as on other facts, assumptions, and representations
described in its opinion letter dated [____________, 1996 (date of closing)]
(the "WL&S Tax Opinion") in opining on the federal income tax issues stated
therein. Accordingly, this Certificate is an integral part of the WL&S Tax
Opinion. Unless otherwise noted, all defined or capitalized terms used in this
Certificate have the same meaning ascribed to such terms in the Merger
Agreement or in the WL&S Tax Opinion.

The following representations numbered 1, 7, 8, 11, 12, 13 and 15 are
being made jointly by HHC and CBI in connection with the Company Merger; the
following representations numbered 3, 4, 6, 9, and 14 are being made
individually by HHC; and the following representations numbered 2, 5, 9, and 10
are being made individually by CBI:

1. The fair market value of the HHC Common Stock and cash (or, where the
CBI shareholder is entitled to receive cash only, the cash) received in the
merger exchange by each CBI shareholder will be approximately equal to the fair
market value of the CBI common stock (the "CBI Common Stock") surrendered in
the exchange.

2. To the best of the knowledge of management of CBI, there is no plan
or intention on the part of any of the shareholders of CBI who own one percent
(1%) or more of the CBI Common Stock, and to the best of the knowledge of
management of CBI, there is no plan or intention on the part of the remaining
shareholders of CBI, to sell, exchange, or otherwise dispose of, including
through any put arrangement, a number of shares of HHC Common Stock received in
the Company Merger that would reduce the CBI shareholders' ownership of HHC
Common Stock to a number of shares having a value, as of the date of the
Company Merger, of less than fifty percent (50%) of the value of all of the
formerly outstanding stock of CBI as of the same date. For purposes of this
representation, shares of CBI Common Stock exchanged for cash in lieu of
fractional shares of HHC Common Stock, exchanged for cash or other property, or
surrendered by dissenters will be treated as outstanding shares of CBI Common
Stock on the date of the Company Merger. Moreover, shares of CBI Common Stock
and shares of HHC Common Stock held by CBI shareholders and otherwise sold,
redeemed, or disposed of prior or subsequent to the Company Merger will be
considered as part of this representation.

3. HHC has no plan or intention to reacquire any of its stock issued in
the Company Merger.

4. HHC has no plan or intention to sell or otherwise dispose of any of
the assets of CBI acquired in the Company Merger, except for dispositions made
in the ordinary course of business, or transfers described in section
368(a)(2)(C) of the Code.

5. The liabilities of CBI assumed by HHC and the liabilities, if any, to
which the transferred assets of CBI are subject, were incurred by CBI in the
ordinary course of its business.

6. Following the Company Merger, HHC will continue the historic business
of CBI or use a significant portion of CBI' historic business assets in a
business.

7. HHC, CBI, and the shareholders of CBI will pay their respective
expenses, if any, incurred in connection with the Company Merger (subject to
representation 14 below).

8. There is no intercorporate indebtedness existing between HHC and CBI
that was issued, acquired, or that will be settled at a discount.

Ad-1
<PAGE> 121
9. Neither HHC nor CBI is an investment company as defined in Code
section 368(a)(2)(F)(iii) and (iv).

10. CBI is not under the jurisdiction of a court in a Title 11 or
similar case within the meaning of section 368(a)(3)(A) of the Code.

11. The fair market value of the assets of CBI transferred to HHC will
equal or exceed the sum of the liabilities assumed by HHC, plus the amount of
the liabilities, if any, to which the transferred assets are subject.

12. The payment of cash in lieu of fractional shares of HHC Common Stock
is solely for the purpose of avoiding the expense and inconvenience to HHC of
issuing fractional shares and does not represent separately bargained- for
consideration. The total cash consideration that will be paid in the Company
Merger to the CBI shareholders instead of issuing fractional shares of HHC
Common Stock will not exceed one percent (1%) of the total consideration that
will be issued in the Company Merger to the CBI shareholders in exchange for
their shares of CBI Common Stock. The fractional share interests of each CBI
shareholder will be aggregated, and no CBI shareholder will receive cash (in
payment for fractional share interests) in an amount equal to or greater than
the value of one (1) full share of HHC Common Stock.

13. None of the compensation received by any shareholder-employee of CBI
pursuant to any employment, consulting or similar arrangement is or will be
separate consideration for, or allocable to, any of his shares of CBI Common
Stock; none of the shares of HHC Common Stock received by any
shareholder-employee of CBI pursuant to the Company Merger will be separate
consideration for, or allocable to, any employment agreement; and the
compensation paid to any shareholder-employee of CBI pursuant to any
employment, consulting or similar arrangement is or will be for services
actually rendered and will be commensurate with amounts paid to third parties
bargaining at arm's-length for similar services.

14. HHC will pay or assume only those expenses of CBI that are solely
and directly related to the Company Merger in accordance with the guidelines
established in Rev. Rul. 73-54, 1973-1 C.B. 187.

15. The information in the "Background Facts Concerning Corporate
Parties" relative to HHC and CBI as set forth in Part I of the WL&S Tax Opinion
is true and accurate as of the date of this Certificate.

HHC and CBI hereby certify that the noted officer of each corporation
executing this Certificate has knowledge of the pertinent information set forth
herein and that he has examined the foregoing representations and, to the best
of such officer's knowledge and belief, the representations made are true,
complete and correct as of the effective date, ________________, 1996, of this
Certificate, and he further certifies that he is duly authorized and empowered
to execute and deliver this Certificate.

HANCOCK HOLDING COMPANY

By:
----------------------------------------------
Title:
-------------------------------------------

COMMUNITY BANCSHARES, INC.

By:
----------------------------------------------
Title:
-------------------------------------------

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CERTIFICATE OF COMMUNITY STATE BANK
RELATING TO SECTION 368 OPINION ON THE BANK MERGER

This Certificate has been requested by the law firm of Watkins Ludlam &
Stennis, P.A. in connection with the rendering of its opinion as to certain
federal income tax consequences relating to the merger of Community State Bank
("Bank") with and into Hancock Bank of Louisiana ("Hancock Bank") (the "Bank
Merger") as such transaction is described in that certain Agreement and Plan of
Reorganization by and between Community Bancshares, Inc. ("CBI"), Bank, Hancock
Holding Company ("HHC"), and Hancock Bank dated as of June 19, 1996 (the
"Merger Agreement"). Watkins Ludlam & Stennis, P.A. will rely on the
representations stated hereinafter, as well as on other facts, assumptions, and
representations described in its opinion letter dated [____________________,
1996 (date of closing)] (the "WL&S Tax Opinion") in opining on the federal
income tax issues stated therein. Accordingly, this Certificate is an integral
part of the WL&S Tax Opinion. Unless otherwise noted, all defined or
capitalized terms used in this Certificate have the same meaning ascribed to
such terms in the Merger Agreement or in the WL&S Tax Opinion.

The following representations are being made in connection with the Bank
Merger:

1. The fair market value of the HHC Common Stock and cash (or, where a
Bank shareholder is entitled to receive cash only, the cash) received in the
Bank Merger exchange by each Bank shareholder (collectively, the "HHC
Consideration") will be approximately equal to the fair market value of the
Bank Common Stock surrendered in the exchange.

2. The aggregate fair market value of the HHC Common Stock portion of
the HHC Consideration will, on the Effective Date of the Bank Merger,
constitute at least fifty-one percent (51%) of the total fair market value of
the HHC Consideration exchanged in the Bank Merger.

3. To the best of the knowledge of management of Bank, there is no plan
or intention by the shareholders of Bank who own one percent (1%) or more of
the Bank Common Stock, and to the best of the knowledge of management of Bank
there is no plan or intention on the part of the remaining shareholders of
Bank, to sell, exchange, or otherwise dispose of a number of shares of HHC
Common Stock received in the Bank Merger that would collectively reduce the
Bank shareholders' ownership of HHC Common Stock to a number of shares having a
value, as of the date of the Bank Merger, of less than fifty percent (50%) of
the value of all of the formerly outstanding stock of Bank as of the same date.
For purposes of this representation, shares of Bank Common Stock exchanged for
cash in lieu of fractional shares of HHC Common Stock, exchanged for cash or
other property, or surrendered by dissenters will be treated as outstanding
shares of Bank Common Stock on the date of the Bank Merger. Moreover, shares
of Bank Common Stock and shares of HHC Common Stock held by Bank shareholders
and otherwise sold, redeemed, or disposed of prior or subsequent to the Bank
Merger will be considered as part of this representation.

4. Bank will transfer and Hancock Bank will acquire at least 90 percent
of the fair market value of the net assets and at least 70 percent of the fair
market value of the gross assets held by Bank immediately prior to the Bank
Merger. For purposes of this representation, amounts paid by Bank to
dissenters, assets used by Bank to pay its reorganization expenses, amounts
paid by Bank to shareholders who receive cash or other property in connection
with the Bank Merger, and all redemptions and distributions (except for
regular, normal dividends) made by Bank immediately preceding the Bank Merger,
are included as assets of Bank held immediately prior to the Bank Merger.

5. The liabilities of Bank assumed by Hancock Bank and the liabilities,
if any, to which the transferred assets of Bank are subject, were incurred by
Bank in the ordinary course of its business.

6. Bank and the shareholders of Bank will pay their respective expenses,
if any, incurred in connection with the Bank Merger (subject to representation
14 below).

7. There is no intercorporate indebtedness existing between HHC and Bank
or between Hancock Bank and Bank that was issued, acquired, or will be settled
at a discount.

8. Bank is not an investment company as defined in Code section
368(a)(2)(F)(iii) and (iv).

9. Bank is not under the jurisdiction of a court in a Title 11 or
similar case within the meaning of section 368(a)(3)(A) of the Code.

10. The fair market value of the assets of Bank transferred to Hancock
Bank will equal or exceed the sum of the liabilities assumed by Hancock Bank,
plus the amount of the liabilities, if any, to which the transferred assets are
subject.

11. No stock of Hancock Bank will be issued in the Bank Merger.

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12. The payment of cash in lieu of fractional shares of HHC Common Stock
is solely for the purpose of avoiding the expense and inconvenience to HHC of
issuing fractional shares and does not represent separately bargained- for
consideration. The total cash consideration that will be paid in the Bank
Merger to the Bank shareholders instead of issuing fractional shares of HHC
Common Stock will not exceed one percent (1%) of the total consideration that
will be issued in the Bank Merger to the Bank shareholders in exchange for
their shares of Bank Common Stock. The fractional share interests of each Bank
shareholder will be aggregated, and no Bank shareholder will receive cash (in
payment for fractional share interests) in an amount equal to or greater than
the value of one (1) full share of HHC Common Stock.

13. None of the compensation received by any shareholder-employee of
Bank pursuant to any employment, consulting or similar arrangement is or will
be separate consideration for, or allocable to, any of his shares of Bank
Common Stock; none of the shares of HHC Common Stock received by any
shareholder-employee of Bank pursuant to the Bank Merger will be separate
consideration for, or allocable to, any employment agreement; and the
compensation paid to any shareholder-employee of Bank pursuant to any
employment, consulting or similar arrangement is or will be for services
actually rendered and will be commensurate with amounts paid to third parties
bargaining at arm's-length for similar services.

14. Hancock Bank will pay or assume only those expenses of Bank that are
solely and directly related to the Bank Merger in accordance with the
guidelines established in Rev. Rul. 73-54, 1973-1 C.B. 187.

15. The information in the "Background Facts Concerning Corporate
Parties" relative to Bank as set forth in Part I of the WL&S Tax Opinion is
true and accurate as of the date of this Certificate.

Bank hereby certifies that the officer of the corporation executing this
Certificate has knowledge of the pertinent information set forth herein and
that he has examined the foregoing representations and, to the best of such
officer's knowledge and belief, the representations made are true, complete and
correct as of the date, ______________, 1996, of this Certificate, and he
further certifies that he is duly authorized and empowered to execute and
deliver this Certificate.

COMMUNITY STATE BANK

By:
----------------------------------------------
Title:
-------------------------------------------

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CERTIFICATE OF HANCOCK HOLDING COMPANY AND
HANCOCK BANK OF LOUISIANA RELATING TO
SECTION 368 OPINION ON THE BANK MERGER

This Certificate has been requested by the law firm of Watkins Ludlam &
Stennis, P.A. in connection with the rendering of its opinion as to certain
federal income tax consequences relating to the merger of Community State Bank
("Bank") with and into Hancock Bank of Louisiana ("Hancock Bank") (the "Bank
Merger") as such transaction is described in that certain Agreement and Plan of
Reorganization by and between Community Bancshares, Inc. ("CBI"), Bank, Hancock
Holding Company ("HHC"), and Hancock Bank dated as of June 19, 1996 (the
"Merger Agreement"). Watkins Ludlam & Stennis, P. A. will rely on the
representations stated hereinafter, as well as on other facts, assumptions, and
representations described in its opinion letter dated [____________________,
1996 (date of closing)] (the "WL&S Tax Opinion") in opining on the federal
income tax issues stated therein. Accordingly, this Certificate is an integral
part of the WL&S Tax Opinion. Unless otherwise noted, all defined or
capitalized terms used in this Certificate have the same meaning ascribed to
such terms in the Merger Agreement or in the WL&S Tax Opinion.

The following representations are being made in connection with the Bank
Merger:

1. Prior to the Bank Merger, HHC will be in control of Hancock Bank
within the meaning of section 368(c)(1) of the Code.

2. Following the Bank Merger, Hancock Bank will not issue additional
shares of its stock that would result in HHC losing control of Hancock Bank
within the meaning of section 368(c)(1) of the Code.

3. HHC has no plan or intention to reacquire any of the HHC Common Stock
issued in the Bank Merger.

4. HHC has no plan or intention to liquidate Hancock Bank; to merge
Hancock Bank with and into another corporation; to sell or otherwise dispose of
the stock of Hancock Bank; or to cause Hancock Bank to sell or otherwise
dispose of any of the assets of Bank acquired in the Bank Merger, except for
dispositions made in the ordinary course of business or transfers described in
section 368(a)(2)(C) of the Code.

5. Following the Bank Merger, Hancock Bank will continue the historic
business of Bank or use a significant portion of Bank's historic business
assets in a business.

6. HHC, Hancock Bank, Bank, and the shareholders of Bank will pay their
respective expenses, if any, incurred in connection with the Bank Merger
(subject to representation 9 below).

7. There is no intercorporate indebtedness existing between HHC and Bank
or between Hancock Bank and Bank that was issued, acquired, or will be settled
at a discount.

8. Neither HHC nor Hancock Bank is an investment company as defined in
Code section 368(a)(2)(F)(iii) and (iv).

9. Hancock Bank will pay or assume only those expenses of Bank that are
solely and directly related to the Bank Merger in accordance with the
guidelines established in Rev. Rul. 73-54, 1973-1 C.B. 187.

10. No stock of Hancock Bank will be issued in the Bank Merger.

11. The payment of cash in lieu of fractional shares of HHC Common Stock
is solely for the purpose of avoiding the expense and inconvenience to HHC of
issuing fractional shares and does not represent separately bargained- for
consideration. The total cash consideration that will be paid in the Bank
Merger to certain of the Bank shareholders instead of issuing fractional shares
of HHC Common Stock will not exceed one percent (1%) of the total consideration
that will be issued in the Bank Merger to the Bank shareholders in exchange for
their shares of Bank Common Stock. The fractional share interests of each Bank
shareholder of record will be aggregated, and no Bank shareholder, will receive
cash (in payment of fractional share interests) in an amount equal to or
greater than the value of one (1) full share of HHC Common Stock.

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<PAGE> 125
12. The fair market value of the HHC Common Stock portion of the total
consideration paid by HHC in the Bank Merger will, on the Effective Date of the
Bank Merger, constitute at least fifty-one percent (51%) of the fair market
value of the total consideration paid by HHC in the Bank Merger.

13. The information in the "Background Facts Concerning Corporate
Parties" relative to HHC and Hancock Bank as set forth in Part I of the WL&S
Tax Opinion is true and accurate as of the date of this Certificate.

HHC and Hancock Bank hereby certify that the officer of the corporation
executing this Certificate has knowledge of the pertinent information set forth
herein and that he has examined the foregoing representations and, to the best
of such officer's knowledge and belief, the representations made are true,
complete and correct as of the date, ________________, 1996, of this
Certificate, and he further certifies that he is duly authorized and empowered
to execute and deliver this Certificate.

HANCOCK HOLDING COMPANY

By:
----------------------------------------------
Title:
-------------------------------------------

HANCOCK BANK OF LOUISIANA

By:
----------------------------------------------
Title:
-------------------------------------------

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<PAGE> 126
EXHIBIT E

FORM OF JOINDER OF SHAREHOLDERS

The undersigned shareholder of Community Bancshares, Inc. ("CBI"), in
consideration of the benefits to be derived by CBI and its shareholders
pursuant to an Agreement and Plan of Reorganization dated June 19th, 1996 (the
"Agreement") by and between CBI, Community State Bank ("Bank"), Hancock Holding
Company ("HHC") and Hancock Bank of Louisiana ("Hancock Bank") (the defined
terms in which are used herein as defined therein) and the expenses to be
incurred by HHC in connection therewith, hereby agrees with HHC as follows:

1. Such shareholder, acting solely in such shareholder's capacity as
such, agrees and undertakes to vote or cause to be voted all shares of CBI
Common Stock as to which such shareholder has voting power at any meeting or
meetings (including any and all adjournments thereof) before which the
Agreement or any similar agreement may come for consideration by CBI
shareholders, in favor of the approval of the Agreement and the Merger
Agreements, and against any similar agreement, unless HHC then is in breach or
default in any material respect with respect to any covenant, representation or
warranty as to it contained in the Agreement to an extent that would permit CBI
to terminate the Agreement pursuant to Section 12.1 of the Agreement. Such
shareholder further agrees not to transfer any of the shares of CBI Common
Stock over which such shareholder has dispositive power or grant any proxy
thereto (except any such proxy approved by HHC) until the earlier of the
Effective Date or the date that the Agreement has been terminated pursuant to
its provisions, except (i) for transfers by operation of law and (ii) for
transfers in connection with which the transferee shall agree in writing with
HHC to be bound by this Joinder as fully as the undersigned. In the case of any
transfer by operation of law, the provisions of this Joinder of Shareholders
are intended to be binding upon and to inure to the benefit of such transferee,
and such transferee shall be bound thereby.

2. The provisions of this Joinder of Shareholders shall be enforceable
through an action by HHC for damages at law or a suit for specific performance
or other appropriate extraordinary relief, the signatory shareholder
acknowledging that remedies at law for breach or default under this Joinder of
Shareholders might be or become inadequate.

All provisions hereof shall survive the Effective Date of the Merger.

This Joinder of Shareholders is dated ___________________, 1996.

----------------------------------------

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EXHIBIT F

CASHIER'S CERTIFICATE

I certify that I am the Cashier of Hancock Bank of Louisiana ("Hancock
Bank") located in Baton Rouge, Louisiana, and that I have been appointed and
that I am presently serving in that capacity in accordance with the Bylaws of
Hancock Bank.

I further certify that the Agreement and Plan of Reorganization dated as
of June 19, 1996 (the "Agreement") by and among Community Bancshares, Inc.,
Independence, Louisiana; Community State Bank, Independence, Louisiana; Hancock
Holding Company, Gulfport, Mississippi; and Hancock Bank of Louisiana, Baton
Rouge, Louisiana, a wholly owned subsidiary of Hancock Holding Company, does
not amend the Articles of Incorporation of Hancock Bank of Louisiana as the
surviving bank, and the shares of Hancock Holding Company common stock to be
issued under the Agreement do not exceed fifteen percent (15%) of the shares of
Hancock Holding Company or Hancock Bank of Louisiana outstanding immediately
prior to effectiveness of the Merger, and thus pursuant to Louisiana Revised
Statutes 6:352(6), the approval of the Agreement by Hancock Holding Company's
stockholders or Hancock Bank's stockholders is not required.

IN WITNESS WHEREOF, I have hereupon set the seal of this Bank, this the
7 day of August, 1996.

HANCOCK BANK OF LOUISIANA

By:/s/ Charles Ray Pourciau
-----------------------------------------
Vice-President , Cashier
-----------------------------------

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APPENDIX B

PROVISIONS OF THE LOUISIANA BUSINESS CORPORATION LAW
RELATING TO RIGHTS OF DISSENTING SHAREHOLDERS

(EXTRACT FROM LOUISIANA REVISED STATUTES,
TITLE 12, SECTION 131)

A. Except as provided in subsection B of this section, if a
corporation has, by vote of its shareholders, authorized a sale, lease or
exchange of all of its assets, or has, by vote of its shareholders, become a
party to a merger or consolidation, then, unless such authorization or action
shall have been given or approved by at least eighty percent of the total
voting power, a shareholder who voted against such corporate action shall have
the right to dissent. If a corporation has become a party to a merger pursuant
to R.S. 12:112(H), the shareholders of any subsidiaries party to the merger
shall have the right to dissent without regard to the proportion of the voting
power which approved the merger and despite the fact that the merger was not
approved by vote of the shareholders of any of the corporations involved.

B. The right to dissent provided by this Section shall not exist in the
case of:

(1) A sale pursuant to an order of a court having jurisdiction
in the premises.

(2) A sale for cash on terms requiring distribution of all or
substantially all of net proceeds to the shareholders in accordance with their
respective interests within one year after the date of the sale.

(3) Shareholders holding shares of any class of stock which, at
the record date fixed to determine shareholders entitled to receive notice of
and to vote at the meeting of shareholders at which a merger or consolidation
was acted on, were listed on a national securities exchange, unless the
articles of the corporation issuing such stock provide otherwise or the shares
of such shareholders were not converted by the merger or consolidation solely
into shares of the surviving or new corporation.

C. Except as provided in the last sentence of this subsection, any
shareholder electing to exercise such right of dissent shall file with the
corporation, prior to or at the meeting of shareholders at which such proposed
corporate action is submitted to a vote, a written objection to such proposed
corporate action, and shall vote his shares against such action. If such
proposed corporate action be taken by the required vote, but by less than
eighty percent of the total voting power, and the merger, consolidation or
sale, lease or exchange of assets authorized thereby be effected, the
corporation shall promptly thereafter give written notice thereof, by
registered mail, to each shareholder who filed such written objection to, and
voted his shares against, such action, at such shareholder's last address on
the corporation's records. Each such shareholder may, within twenty days after
the mailing of such notice to him, but not thereafter, file with the
corporation a demand in writing for the fair cash value of his shares as of the
day before such vote was taken; provided that he state in such demand the value
demanded, and a post office address to which the reply of the corporation may
be sent, and at the same time deposit in escrow in a chartered bank or trust
company located in the parish of the registered office of the corporation, the
certificates representing his shares, duly endorsed and transferred to the
corporation upon the sole condition that said certificates shall be delivered
to the corporation upon payment of the value of the shares determined in
accordance with the provisions of this section. With his demand the
shareholder shall deliver to the corporation, the written acknowledgment of
such bank or trust company that it so holds his certificates of stock. Unless
the objection, demand and acknowledgment aforesaid be made and delivered by the
shareholder within the period above limited, he shall conclusively be presumed
to have acquiesced in the corporate action proposed or taken. In the case of a
merger pursuant to R.S. 12:112(H), the dissenting shareholder need not file an
objection with the corporation nor vote against the merger, but need only file
with the corporation, within twenty days after a copy of the merger certificate
was mailed to him, a demand in writing for the cash value of his shares as of
the day before the certificate was filed with the secretary of state, state in
such demand the value demanded and a post office address to which the
corporation's reply may be sent, deposit the certificates representing his
shares in escrow as hereinabove provided, and deliver to the corporation with
his demand the acknowledgment of the escrow bank or trust company as
herein-above prescribed.

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D. If the corporation does not agree to the value so stated and
demanded, or does not agree that a payment is due, it shall, within twenty days
after receipt of such demand and acknowledgment, notify in writing the
shareholder, at the designated post office address, of its disagreement, and
shall state in such notice the value it will agree to pay if any payment should
be held to be due; otherwise it shall be liable for, and shall pay to the
dissatisfied shareholder, the value demanded by him for his shares.

E. In case of disagreement as to such fair cash value, or as to whether
any payment is due, after compliance by the parties with the provisions of
subsections C and D of this section, the dissatisfied shareholder, within sixty
days after receipt of notice in writing of the corporation's disagreement, but
not thereafter, may file suit against the corporation, or the merged or
consolidated corporation, as the may be, in the district court of the parish in
which the corporation or the merged or consolidated corporation, as the case
may be, has its registered office, praying the court to fix and decree the fair
cash value of the dissatisfied shareholder's shares as of the day before such
corporate action complained of was taken, and the court shall, on such evidence
as may be adduced in relation thereto, determine summarily whether any payment
is due, and, if so, such cash value, and render judgment accordingly. Any
shareholder entitled to file such suit may, within such sixty-day period but
not thereafter, intervene as a plaintiff in such suit filed by another
shareholder, and recover therein judgment against the corporation for the fair
cash value of his shares. No order or decree shall be made by the court
staying the proposed corporate action, and any such corporate action may be
carried to completion notwithstanding any such suit. Failure of the
shareholder to bring suit, or to intervene in such a suit, within sixty days
after receipt of notice of disagreement by the corporation shall conclusively
bind the shareholder (1) by the corporation's statement that no payment is due,
or (2) if the corporation does not contend that no payment is due to accept the
value of his shares as fixed by the corporation in its notice of disagreement.

F. When the fair value of the shares has been agreed upon between the
shareholder and the corporation, or when the corporation has become liable for
the value demanded by the shareholder because of failure to give notice of
disagreement and of the value it will pay, or when the shareholder has become
bound to accept the value the corporation agrees is due because of his failure
to bring suit within sixty days after receipt of notice of the corporation's
disagreement, the action of the shareholder to recover such value must be
brought within five years from the date the value was agreed upon, or the
liability of the corporation became fixed.

G. If the corporation or the merged or consolidated corporation, as the
case may be, shall, in its notice of disagreement, have offered to pay to the
dissatisfied shareholder on demand an amount in cash deemed by it to be the
fair cash value of his shares, and if, on the institution of a suit by the
dissatisfied shareholder claiming an amount in excess of the amount so offered,
the corporation, or the merged or consolidated corporation, as the case may be,
shall deposit in the registry of the court, there to remain until the final
determination of the cause, the amount so offered, then, if the amount finally
awarded such shareholder, exclusive of interest and costs, be more than the
amount offered and deposited as aforesaid, the costs of the proceeding shall be
taxed against the corporation, or the merged or consolidated corporation, as
the case may be; otherwise the costs of the proceeding shall be taxed against
the corporation, or the merged or consolidated corporation, as the case may be;
otherwise the costs of the proceeding shall be taxed against such shareholder.

H. Upon filing a demand for the value of his shares, the shareholder
shall cease to have any of the rights of a shareholder except the rights
accorded by this section. Such a demand may be withdrawn by the shareholder at
any time before the corporation gives notice of disagreement, as provided in
subsection D of this section. After such notice of disagreement is given,
withdrawal of a notice of election shall require the written consent of the
corporation. If a notice of election is withdrawn, or the proposed corporate
action is abandoned or rescinded, or a court shall determine that the
shareholder is not entitled to receive payment for his shares, or the
shareholder shall otherwise lose his dissenter's rights, he shall not have the
right to receive payment for his shares, his share certificates shall be
returned to him (and, on his request, new certificates shall be issued to him
in exchange for the old ones endorsed to the corporation), and he shall be
reinstated to all his rights as a shareholder as of the filing of his demand
for value, including any intervening preemptive rights, and the right to
payment of any intervening dividend or other distribution, or, if any such
rights have expired or any such dividend or distribution other than in cash has
been completed, in lieu thereof, at the election of the corporation, the fair
value thereof in cash as determined by the board as of the time of such
expiration or completion, but without prejudice otherwise to any corporate
proceedings that may have been taken in the interim.

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APPENDIX C

PROVISIONS OF THE LOUISIANA BANKING LAWS
RELATING TO RIGHTS OF DISSENTING STOCKHOLDERS
(EXTRACT FROM LOUISIANA REVISED STATUTES,
TITLE 6, SECTION 376)

RIGHTS OF DISSENTING STOCKHOLDERS

A. Except as provided in Subsection B of this Section, if a state
bank has, by vote of its stockholders, authorized a sale, lease or exchange of
all or substantially all of its assets, or become a party to a merger or
consolidation, or authorized a conversion into a national bank, or authorized a
voluntary liquidation, then, unless such authorization or action shall have
been given or approved by at least eighty percent of the total voting power, a
stockholder who voted against such action shall have the right to dissent.

B. The right to dissent provided by this Section shall not exist in
the case of stockholders holding shares of any class of stock which, at the
record date fixed to determine stockholders entitled to receive notice of and
to vote at the meeting of stockholders at which a merger or consolidation was
acted on, were listed on a national securities exchange, unless the articles of
the bank issuing such stock provide otherwise or the shares of such
stockholders were not converted by the merger or consolidation solely into
shares of the surviving or new bank.

C. (1) Except as provided in the last sentence of this Subsection, any
stockholder electing to exercise such right of dissent shall file with the
bank, prior to or at the meeting of stockholders at which such proposed
action is submitted to a vote, a written objection to such proposed action
and shall vote his shares against such action.

(2) If such proposed action be taken by the required vote but by less
than eighty percent of the total voting power, and the merger,
consolidation, sale, liquidation, or conversion authorized thereby be
effected, the bank shall promptly thereafter give written notice thereof,
by registered mail, to each stockholder who filed such written objection to
and voted his shares against such action at such stockholder's last address
on the bank's records.

(3) Each such stockholder may, within twenty days after the mailing
of such notice to him but not thereafter, file with the bank a demand in
writing for the fair cash value of his shares as of the day before such
vote was taken, provided that he state in such demand the value demanded
and a post office address to which the reply of the bank may be sent and at
the same time deposit in escrow in a bank or trust company located in the
parish of the domicile of the bank the certificates representing his shares
duly endorsed and transferred to the escrow bank upon the sole condition
that said certificates shall be delivered to the bank upon payment of the
value of the shares determined in accordance with the provisions of this
Section. With his demand the stockholder shall deliver to the bank the
written acknowledgment of such escrow bank or trust company with which such
certificates have been deposited that it so holds his certificates of
stock.

(4) Unless the objection, demand, and acknowledgment aforesaid be
made and delivered by the stockholder within the period described in this
Subsection, he shall conclusively be presumed to have acquiesced in the
action proposed or taken.

D. If the bank does not agree to the value so stated and demanded or does
not agree that a payment is due, it shall, within twenty days after receipt of
such demand and acknowledgment notify in writing the stockholder, at the
designated post office address of its disagreement and shall state in such
notice the value it will agree to pay if any payment should be held to be due;
otherwise, it shall be liable for and shall pay to the dissatisfied stockholder
the value demanded by him for his shares.

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E. (1) In case of disagreement as to such fair cash value or as to
whether any payment is due after compliance by the parties with the provisions
of Subsections C and D of this Section, the dissatisfied stockholder within
sixty days after receipt of notice in writing of the bank's disagreement but
not thereafter may file suit against the bank or the merged or consolidated
bank as the case may be, in the district court of the parish in which the bank
or the merged or consolidated bank, as the case may be, is domiciled praying
the court to fix and decree the fair cash value of the dissatisfied
stockholder's shares as of the day before the action complained of was taken,
and the court shall, on such evidence as may be adduced in relation thereto,
determine summarily whether any payment is due and, if so, such cash value, and
render judgment accordingly.

(2) Any stockholder entitled to file such a suit may, within such
sixty-day period, but not thereafter, intervene as a plaintiff in such a
suit filed by another stockholder and recover therein judgment against the
bank for the fair cash value of his shares. No order or decree shall be
made by the court staying tile proposed action, and any such action may be
carried to completion notwithstanding any such a suit.

(3) Failure of the stockholder to bring suit, or to intervene in such
a suit within sixty days after receipt of notice of disagreement by the
bank shall conclusively bind the stockholder:

(a) By the bank's statement that no payment is due or

(b) If the bank does not contend that no payment is due, to
accept the value of his shares as fixed by the bank in its notice of
disagreement.

F. When the fair value of the shares has been agreed upon between the
stockholder and the bank or when the bank has become liable for the value
demanded by the stockholder because of failure to give notice of disagreement
and of the value it will pay or when the stockholder has become bound to accept
the value the bank agrees is due because of his failure to bring suit within
sixty days after receipt of notice of bank's disagreement, the action of the
stockholder to recover such value must be brought within five years from the
date the value was agreed upon or the liability of the bank became fixed.

G. If the bank or the merged or consolidated bank, as the case may be,
shall, in its notice of disagreement, have offered to pay the dissatisfied
stockholder on demand an amount in cash deemed by it to be fair cash value of
his shares, and if, on the institution of a suit by the dissatisfied
stockholder claiming an amount in excess of the amount offered, the bank or the
merged or consolidated bank, as the case may be, shall deposit in the registry
of the court, there to remain until the final determination of the cause, the
amount so offered; then, if the amount finally awarded such stockholder,
exclusive of interest and costs, be more than the amount offered and deposited
as aforesaid, the costs of the proceeding shall be taxed against the bank or
the merged or consolidated bank, as the case may be, and judicial interest may
be awarded against such bank only on the amount of the award in excess of the
amount deposited in the registry of the court; otherwise, the costs of the
proceeding shall be taxed against such stockholder.

H. Upon filing a demand for the value of his shares, the stockholder shall
cease to have any of the rights of a stockholder except the rights accorded by
this Section. Such a demand may be withdrawn by the stockholder at any time
before the bank gives notice of disagreement as provided in Subsection D of
this Section. After such notice of disagreement is given, withdrawal of a
notice of election shall require the written consent of the bank. If a notice
of election is withdrawn, or the proposed corporate action is abandoned or
rescinded or a court should determine that the stockholder is not entitled to
receive payment for his shares, or the stockholder should otherwise lose his
dissenter's rights:

(1) He shall not have the right to receive a payment for his shares;

(2) His share certificates shall be returned to him and, on his
request, new certificates shall be issued to him in exchange for the old
ones endorsed to the bank, and

C-2
<PAGE> 132
(3) He shall be reinstated to all his rights as a stockholder as of
the filing of his demand for value, including any intervening preemptive
rights and the right to payment of any intervening dividend or other
distribution, or, if any rights have expired or any such dividend or
distribution other than in cash has been completed in lieu thereof, at the
election of the bank he shall receive the fair value thereof in cash as
determined by the board as of the time of such expiration or completion but
without prejudice otherwise to any proceeding that may have been taken in
the interim.

C-3
<PAGE> 133
PART II

INFORMATION NOT REQUIRED IN PROSPECTUS/JOINT PROXY STATEMENT

ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Registrant's Articles of Incorporation provide for indemnification
to the fullest extent allowed by law. The Articles of the Registrant provide
in Article Sixth certain provisions regarding the extent to which the
Registrant will provide indemnification and advancement of expenses to its
directors, officers, employees and agents as well as persons serving at the
request of the Registrant as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise (collectively referred as "Eligible Persons").

The Registrant's Bylaws currently contain a provision requiring the
Registrant to indemnify any director, officer, employee or agent who is made a
party or threatened to be made a party to any threatened, pending or completed
claim, action, suit or proceeding, other than an action by or in the right of
the Registrant, by reason of the fact that such person is or was a director,
officer, employee or agent of the Registrant, or is or was serving at the
request of the Registrant as director, officer, partner, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against reasonably incurred expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement, but only if such person acted in good
faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the Registrant, and, in criminal actions, he had no
reasonable cause to believe his conduct was unlawful.

Unless limited by its Articles of Incorporation the Mississippi Business
Corporation Act ("MBCA") mandates that the Registrant indemnify any director
who is successful, on the merits or otherwise, in the defense of any proceeding
to which he was a party, against reasonable expenses incurred by him in
connection with such proceeding (the "Mandatory Provision"). The MBCA permits
the Registrant to indemnify a director who is made a party to a proceeding
against liability (including reasonable expenses) incurred in connection with
such proceeding provided (1) the director's conduct was in good faith, (2) in
the case of conduct in his official capacity, the director reasonably believed
his conduct was in the best interests of the Registrant, (3) in the case of
conduct not in his official capacity, the director reasonably believed his
conduct was not opposed to the best interests of the Registrant, (4) in the
case of any criminal proceeding, the director had no reasonable cause to
believe that his conduct was unlawful, (5) in the case of claims by or in the
right of the Registrant, the director is not adjudged liable to the Registrant,
and (6) in the case of third-party claims, the director is not adjudged liable
on the basis that he derived an improper personal benefit (the "Permissive
Provision"). Statutory indemnification is permitted under the Permissive
Provision, however, only if indemnification is authorized in a specific case
after a determination is made by the Board of Directors (by majority vote of a
quorum consisting of directors not at the time parties to the proceeding), by a
majority of a special committee of disinterested directors (if such quorum of
directors is unobtainable), by special legal counsel or by the shareholders (a
"Disinterested Party"), that the director has met the applicable standard of
conduct. The MBCA also provides that unless the Registrant's Articles of
Incorporation provide otherwise, a court may order indemnification of a
director even if it finds he has not met the applicable standard of conduct, or
in the case of third-party claims, involving action where the director acted
within or without of his official capacity, the director is adjudged liable on
the basis that he derived an improper personal benefit, the director was
adjudged liable to the Registrant in a proceeding by or in the right of the
Registrant, if the court determines that the director is reasonably entitled to
indemnification in view of all the relevant circumstances; provided, however,
that if the director was adjudged liable to the Registrant, his indemnification
is limited to reasonable expenses. The MBCA permits the Registrant to pay for
or reimburse the reasonable expenses incurred by a director in advance of final
disposition of the proceeding, provided the director affirms that he reasonably
believes he has met the applicable standard of conduct, the director agrees to
repay the advance if it is ultimately determined that he did not meet the
standard of conduct, and a determination is made by a Disinterested Party that
the facts then known to the person(s) making the determination would not
preclude indemnification. The MBCA also permits the Registrant to indemnify
officers, employees and agents of the Registrant to the same extent permitted
for directors. Finally, the MBCA allows indemnification beyond the scope of
the Amended and Restated Mandatory and Permissive Provisions.

Article Sixth of the Registrant's Articles of Incorporation does not
limit the applicability of the indemnification provisions contained in the MBCA
and, as permitted by the MBCA, requires the Registrant to indemnify Eligible
Persons beyond the scope of such provisions. The Registrant must indemnify an
Eligible Person, despite the fact that such person has not met

II-1
<PAGE> 134
the standard of conduct set forth in the Permissive Provision or would be
disqualified for indemnification under the Permissive Provision because such
person was either found liable to the Registrant in a suit brought by or in the
right of the Registrant or was found liable in a third-party action on the
basis that he received an improper personal benefit, if a determination is made
by a Disinterested Party, or a court, that the act or omissions of the person
seeking indemnification did not constitute gross negligence or willful
misconduct. Article Sixth also provides for mandatory advancement of
reasonable expenses to a person seeking indemnification, without an affirmation
by such person that he believes he has met the applicable standard of conduct,
as long as he agrees to repay the advance if it is ultimately determined that
he has not met the standard of conduct and a Disinterested Party determines
that the facts then known to such Disinterested Party would not preclude
indemnification.

Article Sixth further provides that no amendment or repeal of its
provisions may be applied retroactively with respect to any event that occurred
prior to such amendment or appeal. The effect of such provision is that the
protection of Article Sixth may not be taken away or diminished by an amendment
in the event of a change in control of the Registrant.

In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid by a
director, officer, or controlling person of the Registrant in the successful
defense of any such action, suit or proceeding) is asserted by such director,
officer, or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.

ITEM 21. EXHIBITS

<TABLE>
<S> <C>
2* Agreement and Plan of Reorganization dated June 19, 1996 among Hancock
Holding Company, Community Bancshares, Inc., Hancock Bank of Louisiana,
and Community State Bank (included as Appendix A to the
Prospectus/Joint Proxy Statement).
3.1 Amended and Restated Articles of Incorporation dated November 8, 1990
(filed as Exhibit 3.1 to the Registrant's Registration Statement on
Form S-8 (No. 333-11831), and incorporated herein by reference).
3.2 Bylaws of Hancock Holding Company restated through November 8, 1990
(filed as Exhibit 3.2 to the Registrant's Registration Statement on
Form S-8 (No. 333-11831), and incorporated herein by reference).
3.3 Articles of Amendment to the Articles of Incorporation of Hancock
Holding Company, dated October 16, 1991 (filed as Exhibit 4.1 to the
Registrant's Form 10-Q for the quarter ended September 30, 1991, and
incorporated herein by reference).
3.4 Articles of Correction, filed with Mississippi Secretary of State on
November 15, 1991 (filed as Exhibit 4.2 to the Registrant's Form 10-Q
for the quarter ended September 30, 1991, and incorporated herein by
reference).
3.5 Articles of Amendment to the Articles of Incorporation of Hancock
Holding Company, adopted February 13, 1992 (filed as Exhibit 3.5 to the
Registrant's Form 10-K for the year ended December 31, 1992, and
incorporated herein by reference).
3.6 Articles of Correction, filed with the Mississippi Secretary of State
on March 2, 1992 (filed as Exhibit 3.6 to the Registrant's Form 10-K
for the year ended December 31, 1992, and incorporated herein by
reference).
4.1 Specimen stock certificate (reflecting change in par value from $10.00
to $3.33, effective March 6, 1989)(filed as Exhibit 4.1 to the
Registrant's Registration Statement on Form S-8 (No. 333-11831), and
incorporated herein by reference).
5 Opinion of Watkins Ludlam & Stennis, P.A. as to the legality of the
shares being registered.
8 Opinion of Watkins Ludlam & Stennis, P.A. regarding certain tax
matters.
21 Subsidiaries of the Registrant (filed as Exhibit 22 to the Registrant's
Form 10-K for the year ended December 31, 1993, and incorporated herein
by reference).
23.1* Consent of Deloitte & Touche LLP.
23.2* Consent of Taylor, Powell, Wilson & Hartford, P.A.
23.3 Consent of Watkins Ludlam & Stennis, P.A. (included in Exhibits 5 and
8).
24* Power of Attorney (included on the signature page of the Registration
Statement).
27 Financial Data Schedule.
99.1 Form of Proxy for Community Bancshares, Inc.
99.2 Form of Proxy for Community State Bank.
</TABLE>

* Previously filed.

II-2
<PAGE> 135
ITEM 22. UNDERTAKINGS.

(a) The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:

(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1993;

(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement;

(iii) To include any material information with respect to the
plan or distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement;

(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof;

(3) To remove from registration by means of post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.

(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, when applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act
of 1934) that is incorporated by reference in the Registration Statement shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

(c) (1) The undersigned Registrant hereby undertakes as follows: that
prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this
Registration Statement, by any person or party who is deemed to
be an underwriter within the meaning of Rule 145(c), the issuer
undertakes that such reoffering prospectus will contain the
information called for by the applicable registration form with
respect to reofferings by persons who may be deemed underwriters,
in addition to the information called for by the other items of
the applicable form.

(2) The Registrant undertakes that every prospectus (i) that is filed
pursuant to paragraph (1) immediately preceding, or (ii) that
purports to meet the requirements of Section 10(a)(3) of the Act
and is used in connection with an offering of securities subject
to Rule 415, will be filed as a part of an amendment to the
Registration Statement and will not be used until such amendment
is effective, and that, for purposes of determining any liability
under the Securities Act of 1933, each such post- effective
amendment shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.

II-3
<PAGE> 136
(d) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.

(e) The undersigned Registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11, or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the Registration Statement through
the date of responding to the request.

(f) The undersigned Registrant hereby undertakes to supply by means of
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the Registration Statement when it became effective.

II-4
<PAGE> 137
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Amendment No. 1 to Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Gulfport, State of Mississippi, this 1st day of October, 1996.

HANCOCK HOLDING COMPANY
(Registrant)

By: /s/ LEO W. SEAL, JR.
-----------------------------------------------------------
Leo W. Seal, Jr.,
President and Chief Executive Officer

By: /s/ C. STANLEY BAILEY
-----------------------------------------------------------
C. Stanley Bailey
Executive Vice President and Chief Financial Officer

Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 1 to Registration Statement has been signed by the following
persons in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
By: /s/ JOSEPH F. BOARDMAN, JR. Chairman of the October 1, 1996
---------------------------------------- Board and Director
Joseph F. Boardman, Jr.

By: Director October _, 1996
----------------------------------------
Thomas W. Milner, Jr.

By: /s/ DR. HOMER C. MOODY, JR. Director October 1, 1996
----------------------------------------
Dr. Homer C. Moody, Jr.

By: Director October _, 1996
----------------------------------------
James B. Estabrook, Jr.

By: Director October _, 1996
----------------------------------------
Victor Mavar

By: /s/ CHARLES H. JOHNSON Director October 1, 1996
----------------------------------------
Charles H. Johnson

By: Director October _, 1996
----------------------------------------
L. A. Koenenn, Jr.
</TABLE>

<PAGE> 138

By: /s/ LEO W. SEAL, JR. President, Chief Executive October 1, 1996
---------------------------------------- Officer and Director
Leo W. Seal, Jr.

By: /s/ GEORGE A. SCHLOEGEL Vice Chairman of the October 1, 1996
---------------------------------------- Board and Director
George A. Schloegel
</TABLE>

<PAGE> 139
INDEX TO EXHIBITS

EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
2* Agreement and Plan of Reorganization dated June 19, 1996 among Hancock Holding Company, Community Bancshares,
Inc., Hancock Bank of Louisiana, and Community State Bank (included as Appendix A to the Prospectus/Joint Proxy
Statement). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.1 Amended and Restated Articles of Incorporation dated November 8, 1990 (filed as Exhibit 3.1 to the Registrant's
Registration Statement on Form S-8 (No. 333-11831), and incorporated herein by
reference) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.2 Bylaws of Hancock Holding Company restated through November 8, 1990 (filed as Exhibit 3.2 to the Registrant's
Registration Statement on Form S-8 (No. 333-11831), and incorporated herein by reference) . . . . . . . . . . . .
3.3 Articles of Amendment to the Articles of Incorporation of Hancock Holding Company, dated October 16, 1991
(filed as Exhibit 4.1 to the Registrant's Form 10-Q for the quarter ended September 30, 1991, and incorporated
herein by reference). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.4 Articles of Correction, filed with Mississippi Secretary of State on November 15, 1991 (filed as Exhibit 4.2 to
the Registrant's Form 10-Q for the quarter ended September 30, 1991, and incorporated herein by reference) . . .
3.5 Articles of Amendment to the Articles of Incorporation of Hancock Holding Company, adopted February 13, 1992
(filed as Exhibit 3.5 to the Registrant's Form 10-K for the year ended December 31, 1992, and incorporated
herein by reference) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.6 Articles of Correction, filed with the Mississippi Secretary of State on March 2, 1992 (filed as Exhibit 3.6 to
the Registrant's Form 10-K for the year ended December 31, 1992, and incorporated herein by reference) . . . . .
4.1 Specimen stock certificate (reflecting change in par value from $10.00 to $3.33, effective March 6, 1989)(filed
as Exhibit 4.1 to the Registrant's Registration Statement on Form S-8 (No. 333-11831), and incorporated herein by
reference). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5 Opinion of Watkins Ludlam & Stennis, P.A. as to the legality of the shares being registered . . . . . . . . . .
8 Opinion of Watkins Ludlam & Stennis, P.A. regarding certain tax matters . . . . . . . . . . . . . . . . . . . .
23.1* Consent of Deloitte & Touche LLP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
23.2* Consent of Taylor, Powell, Wilson & Hartford, P.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
23.3 Consent of Watkins Ludlam & Stennis, P.A. (included in Exhibits 5 and 8). . . . . . . . . . . . . . . . . . . .
24* Power of Attorney (included on the signature page of the Registration Statement) . . . . . . . . . . . . . . . .
27 Financial Data Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
99.1 Form of Proxy for Community Bancshares, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
99.2 Form of Proxy for Community State Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
</TABLE>

* Previously filed.

<PAGE> 140

EXHIBIT 23.1

INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in this Registration Statement of
Hancock Holding Company on Form S-4 of our report dated January 12, 1996,
incorporated by reference in the Annual Report on Form 10-K of Hancock Holding
Company for the year ended December 31, 1995 and to the reference to us under
the heading "Experts" in the Prospectus/Joint Proxy Statement, which is a part
of this Registration Statement.

DELOITTE & TOUCHE LLP
New Orleans, Louisiana
September 6, 1996

II-8
<PAGE> 141
EXHIBIT 23.2

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the caption "Experts" and to the
use of our report dated January 19, 1996, with respect to the consolidated
financial statements of Community Bancshares, Inc., and Subsidiary included in
this Registration Statement (Form S-4) and related Prospectus of Hancock
Holding Company for the registration of its common stock.

/s/ TAYLOR, POWELL, WILSON & HARTFORD, P.A.

September 6, 1996

II-9
<PAGE> 142
[ARTICLE] 9
[MULTIPLIER] 1,000
<TABLE>
<S> <C>
[PERIOD-TYPE] 6-MOS
[FISCAL-YEAR-END] DEC-31-1996
[PERIOD-START] JAN-01-1996
[PERIOD-END] JUN-30-1996
[CASH] 145,223
[INT-BEARING-DEPOSITS] 2,945
[FED-FUNDS-SOLD] 72,175
[TRADING-ASSETS] 0
[INVESTMENTS-HELD-FOR-SALE] 108,169
[INVESTMENTS-CARRYING] 807,932
[INVESTMENTS-MARKET] 804,416
[LOANS] 1,070,561
[ALLOWANCE] (17,698)
[TOTAL-ASSETS] 2,276,357
[DEPOSITS] 1,939,115
[SHORT-TERM] 82,732
[LIABILITIES-OTHER] 19,028
[LONG-TERM] 2,035
[COMMON] 30,043
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[OTHER-SE] 204,404
[TOTAL-LIABILITIES-AND-EQUITY] 2,276,357
[INTEREST-LOAN] 51,858
[INTEREST-INVEST] 29,536
[INTEREST-OTHER] 3,358
[INTEREST-TOTAL] 84,752
[INTEREST-DEPOSIT] 30,276
[INTEREST-EXPENSE] 32,256
[INTEREST-INCOME-NET] 52,496
[LOAN-LOSSES] 1,801
[SECURITIES-GAINS] (34)
[EXPENSE-OTHER] 39,410
[INCOME-PRETAX] 23,557
[INCOME-PRE-EXTRAORDINARY] 23,557
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] 15,800
[EPS-PRIMARY] 1.78
[EPS-DILUTED] 1.78
[YIELD-ACTUAL] 5.12
[LOANS-NON] 5,177
[LOANS-PAST] 4,073
[LOANS-TROUBLED] 0
[LOANS-PROBLEM] 0
[ALLOWANCE-OPEN] 17,391
[CHARGE-OFFS] 2,630
[RECOVERIES] 1,136
[ALLOWANCE-CLOSE] 17,698
[ALLOWANCE-DOMESTIC] 17,698
[ALLOWANCE-FOREIGN] 0
[ALLOWANCE-UNALLOCATED] 0
</TABLE>

<PAGE> 1
EXHIBIT 5

[WATKINS LUDLAM & STENNIS. P.A. LETTERHEAD]
October 4, 1996

Board of Directors
Hancock Holding Company
One Hancock Plaza
2510 14th Street
Gulfport, Mississippi 39501

Gentlemen:

We have acted as counsel to Hancock Holding Company in connection with
the preparation of its Registration Statement on Form S-4 for registration of
450,330 shares of Common Stock, $3.33 par value, under the Securities Act of
1933. Such shares are to be issued pursuant to the Agreement and Plan of
Reorganization (the "Merger Agreement"), dated as of June 19, 1996, by and
among Hancock Holding Company, Hancock Bank of Louisiana, Community Bancshares,
Inc. and Community State Bank.

We have examined the Merger Agreement, the Articles of Incorporation
and the amendments thereto of Hancock Holding Company, and such other documents
as we deemed relevant.

Based on the foregoing, it is our opinion that the 450,330 shares of
Common Stock of Hancock Holding Company to be registered under the Securities
Act of 1933, when issued pursuant to the Merger Agreement will be legally
issued, fully paid and non-assessable shares of Common Stock of Hancock Holding
Company

We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name under the heading "Legal
Opinion" in the Proxy Statement comprising Part I of the Registration
Statement.

Sincerely,

WATKINS LUDLAM & STENNIS, P.A.

<PAGE> 1

Exhibit 8

[Watkins Ludlam & Stennis, P.A. Letterhead]

[Date of Closing]

Board of Directors Board of Directors
Community Bancshares, Inc. Hancock Holding Company
203 N. Railroad Avenue Post Office Box 4019
Independence, LA 70443-9101 Gulfport, MS 39502

RE: THE FEDERAL INCOME TAX CONSEQUENCES OF CERTAIN MATTERS ARISING
UNDER THE CORPORATE REORGANIZATION PROVISIONS OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED.

Gentlemen:

We have acted as special counsel to Hancock Holding Company, a
Mississippi corporation ("HHC"), and Hancock Bank of Louisiana, a Louisiana
state bank ("Hancock Bank"), in connection with certain federal income tax
matters relating to the transactions described in: (a) that certain Agreement
and Plan of Reorganization, dated as of June 19, 1996 (the "Merger Agreement"),
by and between Community Bancshares, Inc., a Louisiana corporation ("CBI"),
Community State Bank ("Bank"), a Louisiana state bank, Hancock Bank, and HHC,
(b) that certain Company Merger Agreement between CBI and HHC, dated as of June
19, 1996, and (c) that certain Bank Merger Agreement between Bank and Hancock
Bank, dated as of June, 1996. This opinion is furnished to you pursuant to
Section 8.2(e) of the Merger Agreement. Except as otherwise defined herein,
all capitalized terms herein have the meanings set forth in the Merger
Agreement.

In connection with this opinion, we have examined and are familiar with
originals or copies, certified or otherwise identified to our satisfaction, of
the Merger Agreement and such other documents as we have deemed necessary or
appropriate in order to enable us to render the opinion below. In our
examination, we have assumed the genuineness of all signatures, the legal
capacity of all natural persons, the authenticity of all documents submitted to
us as originals, the conformity to original documents of all documents
submitted to us as certified, conformed or photostatic copies and the
authenticity of the originals of such copies. In rendering the opinion set
forth below, we

<PAGE> 2

Board of Directors
Community Bancshares, Inc.
Hancock Holding Company
[Date of Closing]
Page 2

have relied upon certain written representations and covenants of the parties
to the Company Merger and the Bank Merger set forth in the Certificates which
are attached hereto as Exhibits "A," "B," and "C."

In rendering our opinion, we have considered the applicable provisions
of the Internal Revenue Code of 1986, as amended (the "Code"), Treasury
Regulations, pertinent judicial authorities, interpretive rulings of the
Internal Revenue Service (the "Service") and such other authorities as we have
considered relevant.

I. DESCRIPTION OF PROPOSED COMPANY MERGER

The proposed Company Merger will be structured in accordance with the
Merger Agreement, the Company Merger Agreement, the laws of the State of
Louisiana, applicable federal law, the statements and representations of the
parties to the transactions, and the following descriptions:

(1) On the Effective Date, CBI will be merged with and into HHC on
the terms and subject to the conditions set forth in the Merger
Agreement and the Company Merger Agreement, some of which are
further described below. HHC will acquire all of the assets and
assume all of the liabilities of CBI. HHC will continue in
existence as the surviving corporation. CBI will cease to exist
at the Effective Date of the Company Merger.

(2) Except for shares as to which dissenters' rights, if any, have
been perfected and not withdrawn or otherwise forfeited under
applicable Louisiana law, and except for shares held by certain
"Small Shareholders" as described below, on the Effective Date
(pursuant to Section 3.1(b) of the Merger Agreement), the issued
and outstanding shares of CBI Common Stock shall automatically be
exchanged for and converted into the right to receive a fixed
number of shares of HHC Common Stock and a fixed amount of cash
(collectively the "CBI Exchange Ratio"). Each holder of 25 or
fewer shares of CBI Common Stock (a "Small Shareholder"), shall
not receive HHC Common Stock, but rather shall be entitled to
receive as consideration a fixed cash amount for each share of
CBI Common Stock held.

(3) If after calculation of the CBI Exchange Ratio, a holder of
shares of CBI Common Stock is entitled to receive a fraction of a
share of HHC's Common Stock, no such fractional share will be
issued. In lieu thereof, cash will be paid to such shareholder
in an amount equal to such fractional part of a share of HHC
Common Stock multiplied by $36.50.

<PAGE> 3

Board of Directors
Community Bancshares, Inc.
Hancock Holding Company
[Date of Closing]
Page 3

(4) As a result of the Company Merger, the CBI shareholders (other
than the Small Shareholders and those CBI shareholders who
perfect any applicable dissenters' rights) will become
shareholders of HHC.

(5) After the Company Merger, HHC will continue its historical
business in a substantially unchanged manner.

II. DESCRIPTION OF PROPOSED BANK MERGER

The proposed Bank Merger will be structured in accordance with the
Merger Agreement, the Bank Merger Agreement, the laws of the State of
Louisiana, the statements and representations of the parties to the
transactions, and the following descriptions:

(1) Immediately after the Company Merger on the Effective Date, Bank
will be merged with and into Hancock Bank on the terms and
subject to the conditions set forth in the Merger Agreement and
the Bank Merger Agreement, some of which are further described
below. Hancock Bank will acquire all of the assets and assume
all of the liabilities of Bank. Hancock Bank will continue in
existence as the surviving corporation. Bank will cease to exist
at the Effective Date of the Bank Merger.

(2) Except for (a) shares as to which dissenters' rights, if any,
have been perfected and not withdrawn or otherwise forfeited
under applicable Louisiana law, (b) shares held by certain "Small
Bank Shareholders" as described below, and (c) shares held by
CBI, on the Effective Date (pursuant to Section 3.1(c) of the
Merger Agreement), the issued and outstanding shares of Bank
Common Stock shall automatically be exchanged for and converted
into the right to receive from HHC, a fixed number of shares of
HHC Common Stock and a fixed amount of cash (collectively the
"Bank Exchange Ratio"). (The holders of such remaining issued
and outstanding Bank Common Stock are hereinafter referred to as
the "Bank Minority Shareholders.")

(3) Each holder of 25 or fewer shares of Bank Common Stock (a "Small
Bank Shareholder"), shall not receive HHC Common Stock, but
rather shall be entitled to receive as consideration from HHC, a
fixed cash amount for each share of Bank Common Stock held. The
Bank Common Stock held by HHC immediately after and as a result
of the Company Merger will be canceled or retired as a result of
the Bank Merger, and no additional Hancock Bank Common Stock will
be issued to HHC in connection with the Bank Merger.

<PAGE> 4

Board of Directors
Community Bancshares, Inc.
Hancock Holding Company
[Date of Closing]
Page 4

(4) If after calculation of the Bank Exchange Ratio, a Bank Minority
Shareholder is entitled to receive a fraction of a share of HHC
Common Stock, no such fractional share will be issued. In lieu
thereof, cash will be paid to such shareholder in an amount equal
to such fractional part of a share of HHC Common Stock multiplied
by $36.50.

(5) As a result of the Bank Merger, the Bank Minority Shareholders
(i.e., shareholders other than the Small Bank Shareholders and
those Bank shareholders who perfect any applicable dissenters'
rights) will become shareholders of HHC.

(6) No Hancock Bank Common Stock will be issued in the Bank Merger.

(7) The ownership structure between HHC and Hancock Bank will not
change as a result of the Bank Merger. After the Bank Merger,
Hancock Bank will continue its historical business in a
substantially unchanged manner.

III. OPINION

In reliance upon the foregoing facts and the representations of the
parties to the Merger transactions, and based upon our review of such documents
and consideration of such legal matters as we have deemed relevant and
sufficient to enable us to render an informed opinion, we are of the opinion
that the federal income tax consequences of the proposed Mergers will be as
follows:

A. With respect to the Company Merger:

1. Provided the proposed Company Merger of CBI with and into HHC
qualifies as a statutory merger under applicable state or federal
law, the acquisition by HHC of all of the assets of CBI in
exchange for the CBI Exchange Ratio, cash, and the assumption of
liabilities of CBI will constitute a reorganization within the
meaning of Code section 368(a)(1)(A).(1/) HHC and CBI will each be
"a party to a reorganization" within the meaning of section
368(b) of the Code.

2. No gain or loss will be recognized to CBI on the transfer of all
of its assets to HHC in exchange for the CBI Exchange Ratio and
cash (all of which will be distributed

- --------------------

_____1/Unless otherwise noted, hereafter all section references
are to the Code.

<PAGE> 5

Board of Directors
Community Bancshares, Inc.
Hancock Holding Company
[Date of Closing]
Page 5

to the CBI shareholders), and the assumption by HHC of the
liabilities of CBI (Code sections 361(b)(1)(A) and 357(a)).

3. No gain or loss will be recognized to HHC upon the receipt by HHC
of all of the assets of CBI in exchange for the CBI Exchange
Ratio and cash paid to the CBI shareholders and the assumption by
HHC of the liabilities of CBI and the liabilities to which the
transferred assets are subject (Rev. Rul 57-278, 1957-1 C.B.
124).

4. Gain, if any, will be realized by the CBI shareholders who
receive HHC Common Stock and cash (i.e., the CBI Exchange Ratio)
in exchange for their CBI Common Stock. Such gain will be
recognized, but not in excess, in each instance, of the sum of
such cash received (section 356(a)(1)). If the exchange has the
effect of the distribution of a dividend (determined with the
application of section 318(a)), then the amount of the gain
recognized that is not in excess of the CBI shareholder's ratable
share of undistributed earnings and profits of CBI will be
treated as a dividend (section 356(a)(2)). The determination of
whether the exchange has the effect of the distribution of a
dividend must be made on a shareholder by shareholder basis in
accordance with the principles set forth in Commissioner v.
Clark, 489 U.S. 726 (1989), Rev. Rul. 93-61, 1993-2 C.B. 118, and
United States v. Davis, 397 U.S. 301 (1970). The remainder, if
any, of the gain recognized will be treated as gain from the
exchange of property. No loss will be recognized on the exchange
of CBI Common Stock for the CBI Exchange Ratio (section 356(c)).

5. Where a dissenting CBI shareholder receives solely cash in
exchange for all of his or her CBI Common Stock, such cash will
be treated as having been received by the shareholder as a
distribution in redemption of his or her stock subject to the
provisions and limitations of section 302.

6. In the case of a Small Shareholder of CBI who receives solely
cash in exchange for all of his or her CBI Common Stock, such
cash will be treated as having been received by the shareholder
as a distribution in redemption of his or her stock subject to
the provisions and limitations of section 302.

7. The basis of the HHC Common Stock to be received by certain CBI
shareholders (including any fractional share interests to which
they may be entitled) will be, in each instance, the same as the
basis of the CBI Common Stock surrendered in exchange therefor,
decreased by the amount of cash received, and increased by (i)
the amount that is treated as a dividend, and (ii) any gain
recognized on the exchange

<PAGE> 6

Board of Directors
Community Bancshares, Inc.
Hancock Holding Company
[Date of Closing]
Page 6

(not including any portion of the gain that is treated as a
dividend) (Code section 358(a)(1)).

8. The holding period of the HHC Common Stock to be received by
certain CBI shareholders (including any fractional share
interests to which they may be entitled) will include, in each
case, the period during which the CBI Common Stock surrendered in
exchange therefor was held, provided that the CBI Common Stock is
held as a capital asset in the hands of the CBI shareholder on
the Effective Date of the Company Merger (Code section 1223(1)).

9. The basis of the assets of CBI in the hands of HHC will be, in
each instance, the same as the basis of those assets in the hands
of CBI immediately prior to the Company Merger (Code section
362(b)).

10. The holding period of CBI's assets in the hands of HHC will, in
each instance, include the period during which such assets were
held by CBI (Code section 1223(2)).

11. The payment of cash to CBI shareholders in lieu of fractional
shares of HHC Common Stock will be treated for federal income tax
purposes as if the fractional shares were distributed as part of
the reorganization exchange and then redeemed by HHC. The cash
payments will be treated as having been received as distributions
in redemption of such stock, subject to the provisions and
limitations of section 302 of the Code (Rev. Rul. 66-365, 1966-2
C.B. 116; Rev. Proc. 77-41, 1977-2 C.B. 574).

B. With respect to the Bank Merger:

1. Provided the proposed Merger of Bank with and into Hancock Bank
qualifies as a statutory merger under applicable Louisiana law,
the acquisition by Hancock Bank of substantially all of the
assets of Bank in exchange for the Bank Exchange Ratio, cash, and
the assumption of liabilities of Bank will constitute a
reorganization within the meaning of Code section 368(a)(1)(A)
and section 368(a)(2)(D).

For purposes of this opinion, "substantially all" means at least
90 percent of the fair market value of the net assets and at
least 70 percent of the fair market value of the gross assets of
Bank held immediately prior to the Bank Merger. HHC, Hancock
Bank, and Bank will each be "a party to a reorganization" within
the meaning of section 368(b) of the Code.

<PAGE> 7

Board of Directors
Community Bancshares, Inc.
Hancock Holding Company
[Date of Closing]
Page 7

2. No gain or loss will be recognized by Bank upon the transfer of
substantially all of it assets to Hancock Bank in exchange for
the Bank Exchange Ratio and cash (all of which will be
distributed to the Bank shareholders), and the assumption by
Hancock Bank of the liabilities of Bank (Code sections
361(b)(1)(A) and 357(a)).

3. No gain or loss will be recognized by either HHC or Hancock Bank
on the receipt by Hancock Bank of substantially all of the assets
of Bank in exchange for the Bank Exchange Ratio, cash, and the
assumption by Hancock Bank of the liabilities of Bank and the
liabilities to which the transferred assets are subject (Rev.
Rul. 57-278, 1957-1 C.B. 124).

4. The basis of the assets of Bank in the hands of Hancock Bank will
be, in each instance, the same as the basis of those assets in
the hands of Bank immediately prior to the Bank Merger (Code
section 362(b)).

5. The holding period of Bank's assets in the hands of Hancock Bank
will, in each instance, include the period during which such
assets were held by Bank (Code section 1223(2)).

6. Gain, if any, will be realized by the Bank Minority Shareholders
who receive Common Stock and cash (i.e., the Bank Exchange
Ratio) in exchange for their Bank Common Stock. Such gain will
be recognized, but not in excess, in each instance, of the sum
of such cash received (section 356(a)(1)). If the exchange has
the effect of the distribution of a dividend (determined with the
application of section 318(a)), then the amount of the gain
recognized that is not in excess of the Bank Minority
Shareholder's ratable share of undistributed earnings and profits
of Bank will be treated as a dividend (section 356(a)(2)). The
determination of whether the exchange has the effect of the
distribution of a dividend must be made on a shareholder by
shareholder basis in accordance with the principles set forth in
Commissioner v. Clark, 489 U.S. 726 (1989), Rev. Rul. 93-61,
1993-2 C.B. 118, and United States v. Davis, 397 U.S. 301 (1970).
The remainder, if any, of the gain recognized will be treated as
gain from the exchange of property. No loss will be recognized
on the exchange of Bank Common Stock for the Bank Exchange Ratio
(section 356(c)).

7. Where a dissenting Bank shareholder receives solely cash in
exchange for all of his or her Bank Common Stock, such cash will
be treated as having been received by the

<PAGE> 8

Board of Directors
Community Bancshares, Inc.
Hancock Holding Company
[Date of Closing]
Page 8

shareholder as a distribution in redemption of his or her stock
subject to the provisions and limitations of section 302.

8. In the case of a Small Bank Shareholder who receives solely cash
in exchange for all of his or her Bank Common Stock, such cash
will be treated as having been received by the shareholder as a
distribution in redemption of his or her stock subject to the
provisions and limitations of section 302.

9. The basis of the HHC Common Stock to be received by the Bank
Minority Shareholders (including any fractional share interests
to which they may be entitled) will be, in each instance, the
same as the basis of the Bank Common Stock surrendered in
exchange therefor, decreased by the amount of cash received, and
increased by (i) the amount that is treated as a dividend, and
(ii) any gain recognized on the exchange (not including any
portion of the gain that is treated as a dividend) (Code section
358(a)(1)).

10. The holding period of the HHC Common Stock to be received by the
Bank Minority Shareholders (including any fractional share
interests to which they may be entitled) will include, in each
case, the period during which the Bank Common Stock surrendered
in exchange therefor was held, provided that the Bank Common
Stock is held as a capital asset in the hands of the Bank
Minority Shareholder on the Effective Date of the Bank Merger
(Code section 1223(1)).

11. The payment of cash to Bank Minority Shareholders in lieu of
fractional shares of HHC Common Stock will be treated for federal
income tax purposes as if the fractional shares were distributed
as part of the reorganization exchange and then redeemed by HHC.
The cash payments will be treated as having been received as
distributions in redemption of such stock, subject to the
provisions and limitations of section 302 of the Code (Rev. Rul.
66-365, 1966-2 C.B. 116; Rev. Proc. 77-41, 1977-2 C.B. 574).

We have qualified our opinions by reference to the Code, the Treasury
Regulations promulgated thereunder, and existing judicial and administrative
interpretations thereof. In so opining, we have relied upon the foregoing
facts and representations and have reviewed such documents and have considered
such legal matters as we have deemed relevant and sufficient to enable us to
render an informed opinion. While we have not been requested nor have we
undertaken to make independent investigations to verify the representations and
statements described above or set forth in the Certificates attached as
Exhibits "A," "B," and "C," based upon our discussions with

<PAGE> 9

Board of Directors
Community Bancshares, Inc.
Hancock Holding Company
[Date of Closing]
Page 9

representatives of the parties and our limited review of certain background
material, we believe that it is reasonable for us to rely on such
representations and statements.

Our opinion is limited to the specific opinions expressed above, and no
other opinions are intended nor should they be inferred. An opinion of counsel
has no binding effect upon the Service and no assurances can be given that the
conclusions reached in any opinion will not be contested by the Service, or if
contested, will be sustained by a court.

The opinions we have expressed above are based on the facts and
representations outlined herein being correct in all material respects as of
the dates indicated or at the time of the proposed transactions as the case may
be. In the event that one or more of the facts or representations are
incorrect for any such time, our opinion would likely be substantially
different than that expressed above.

The opinion expressed herein is for the sole benefit of HHC, CBI, Bank,
and Hancock Bank, together with their respective shareholders for their use in
connection with the proposed Mergers, and is not to be used, delivered to or
relied upon by any other party for any other purpose, and may not be
circulated, quoted, or otherwise referred to for any other purpose without our
prior written consent.

Very truly yours,

/s/WATKINS LUDLAM & STENNIS, P.A.

<PAGE> 10

CERTIFICATE OF HANCOCK HOLDING COMPANY AND
COMMUNITY BANCSHARES, INC.
RELATING TO SECTION 368 OPINION ON THE COMPANY MERGER

The fair market value of the HHC Common Stock and cash (or, where the CBI
shareholder is entitled to receive cash only, the cash) received in the merger
exchange by each CBI shareholder will be approximately equal to the fair market
value of the CBI common stock (the "CBI Common Stock") surrendered in the
exchange.

1. To the best of the knowledge of management of CBI, there is no
plan or intention on the part of any of the shareholders of CBI
who own one percent (1%) or more of the CBI Common Stock, and to
the best of the knowledge of management of CBI, there is no plan
or intention on the part of the remaining shareholders of CBI, to
sell, exchange, or otherwise dispose of, including through any
put arrangement, a number of shares of HHC Common Stock received
in the Company Merger that would reduce the CBI shareholders'
ownership of HHC Common Stock to a number of shares having a
value, as of the date of the Company Merger, of less than fifty
percent (50%) of the value of all of the formerly outstanding
stock of CBI as of the same date. For purposes of this
representation, shares of CBI Common Stock exchanged for cash in
lieu of fractional shares of HHC Common Stock, exchanged for cash
or other property, or surrendered by dissenters will be treated
as outstanding shares of CBI Common Stock on the date of the
Company Merger. Moreover, shares of CBI Common Stock and shares
of HHC Common Stock held by CBI shareholders and otherwise sold,
redeemed, or disposed of prior or subsequent to the Company
Merger will be considered as part of this representation.

EXHIBIT "A" TO TAX OPINION

<PAGE> 11

2. HHC has no plan or intention to reacquire any of its stock issued
in the Company Merger.

3. HHC has no plan or intention to sell or otherwise dispose of any
of the assets of CBI acquired in the Company Merger, except for
dispositions made in the ordinary course of business, or
transfers described in section 368(a)(2)(C) of the Code.

4. The liabilities of CBI assumed by HHC and the liabilities, if
any, to which the transferred assets of CBI are subject, were
incurred by CBI in the ordinary course of its business.

5. Following the Company Merger, HHC will continue the historic
business of CBI or use a significant portion of CBI's historic
business assets in a business.

6. HHC, CBI, and the shareholders of CBI will pay their respective
expenses, if any, incurred in connection with the Company Merger
(subject to representation 14 below).

7. There is no intercorporate indebtedness existing between HHC and
CBI that was issued, acquired, or that will be settled at a
discount.

8. Neither HHC nor CBI is an investment company as defined in Code
section 368(a)(2)(F)(iii) and (iv).

9. CBI is not under the jurisdiction of a court in a Title 11 or
similar case within the meaning of section 368(a)(3)(A) of the
Code.

10. The fair market value of the assets of CBI transferred to HHC
will equal or exceed the sum of the liabilities assumed by HHC,
plus the amount of the liabilities, if any, to which the
transferred assets are subject.

11. The payment of cash in lieu of fractional shares of HHC Common
Stock is solely for the purpose of avoiding the expense and
inconvenience to HHC of issuing fractional shares and does not
represent separately bargained-for consideration. The total cash
consideration that will be paid in the Company Merger to the CBI
shareholders instead of issuing fractional shares of HHC Common
Stock will not exceed one percent (1%) of the total consideration
that will be issued in the Company Merger to the CBI shareholders
in exchange for their shares of CBI Common Stock. The fractional
share interests of each CBI shareholder will be aggregated, and
no CBI shareholder will receive cash (in payment for fractional
share interests) in an amount equal to or greater than the value
of one (1) full share of HHC Common Stock.

2
<PAGE> 12

12. None of the compensation received by any shareholder-employee of
CBI pursuant to any employment, consulting or similar arrangement
is or will be separate consideration for, or allocable to, any of
his shares of CBI Common Stock; none of the shares of HHC Common
Stock received by any shareholder-employee of CBI pursuant to the
Company Merger will be separate consideration for, or allocable
to, any employment agreement; and the compensation paid to any
shareholder-employee of CBI pursuant to any employment,
consulting or similar arrangement is or will be for services
actually rendered and will be commensurate with amounts paid to
third parties bargaining at arm's-length for similar services.

13. HHC will pay or assume only those expenses of CBI that are solely
and directly related to the Company Merger in accordance with the
guidelines established in Rev. Rul. 73-54, 1973-1 C.B. 187.

14. The information in the "Background Facts Concerning Corporate
Parties" relative to HHC and CBI as set forth in Part I of the
WL&S Tax Opinion is true and accurate as of the date of this
Certificate.

HANCOCK HOLDING COMPANY

By:
------------------------------------
Title:
----------------------------------

COMMUNITY BANCSHARES, INC.

By:
-------------------------------------
Title:
----------------------------------

3
<PAGE> 13

CERTIFICATE OF COMMUNITY STATE BANK
RELATING TO SECTION 368 OPINION ON THE BANK MERGER

This Certificate has been requested by the law firm of Watkins Ludlam
& Stennis, P.A. in connection with the rendering of its opinion as to certain
federal income tax consequences relating to the merger of Community State Bank
("Bank") with and into Hancock Bank of Louisiana ("Hancock Bank") (the "Bank
Merger") as such transaction is described in that certain Agreement and Plan of
Reorganization by and between Community Bancshares, Inc. ("CBI"), Bank, Hancock
Holding Company ("HHC"), and Hancock Bank dated as of June 19, 1996 (the
"Merger Agreement"). Watkins Ludlam & Stennis, P.A. will rely on the
representations stated hereinafter, as well as on other facts, assumptions, and
representations described in its opinion letter dated [____________________,
1996 (date of closing)] (the "WL&S Tax Opinion") in opining on the federal
income tax issues stated therein. Accordingly, this Certificate is an integral
part of the WL&S Tax Opinion. Unless otherwise noted, all defined or
capitalized terms used in this Certificate have the same meaning ascribed to
such terms in the Merger Agreement or in the WL&S Tax Opinion.

The following representations are being made in connection with the
Bank Merger:

1. The fair market value of the HHC Common Stock and cash (or,
where a Bank shareholder is entitled to receive cash only, the
cash) received in the Bank Merger exchange by each Bank
shareholder (collectively, the "HHC Consideration") will be
approximately equal to the fair market value of the Bank
Common Stock surrendered in the exchange.

2. The aggregate fair market value of the HHC Common Stock
portion of the HHC Consideration will, on the Effective Date
of the Bank Merger, constitute at least fifty-one percent
(51%) of the total fair market value of the HHC Consideration
exchanged in the Bank Merger.

3. To the best of the knowledge of management of Bank, there is
no plan or intention by the shareholders of Bank who own one
percent (1%) or more of the Bank Common Stock, and to the best
of the knowledge of management of Bank there is no plan or
intention on the part of the remaining shareholders of Bank,
to sell, exchange, or otherwise dispose of a number of shares
of HHC Common Stock received in the Bank Merger that would
collectively reduce the Bank shareholders' ownership of HHC
Common Stock to a number of shares having a value, as of the
date of the Bank Merger, of less than fifty percent (50%) of
the value of all of the formerly outstanding stock of Bank as
of the same date. For purposes of this representation, shares
of Bank Common Stock exchanged for cash in lieu of fractional
shares of HHC Common Stock, exchanged for cash or other
property, or surrendered by dissenters will be treated as
outstanding shares of Bank Common Stock on the date of the
Bank Merger. Moreover, shares of Bank Common Stock

EXHIBIT "B" TO TAX OPINION

<PAGE> 14

and shares of HHC Common Stock held by Bank shareholders and
otherwise sold, redeemed, or disposed of prior or subsequent
to the Bank Merger will be considered as part of this
representation.

4. Bank will transfer and Hancock Bank will acquire at least 90
percent of the fair market value of the net assets and at
least 70 percent of the fair market value of the gross assets
held by Bank immediately prior to the Bank Merger. For
purposes of this representation, amounts paid by Bank to
dissenters, assets used by Bank to pay its reorganization
expenses, amounts paid by Bank to shareholders who receive
cash or other property in connection with the Bank Merger, and
all redemptions and distributions (except for regular, normal
dividends) made by Bank immediately preceding the Bank Merger,
are included as assets of Bank held immediately prior to the
Bank Merger.

5. The liabilities of Bank assumed by Hancock Bank and the
liabilities, if any, to which the transferred assets of Bank
are subject, were incurred by Bank in the ordinary course of
its business.

6. Bank and the shareholders of Bank will pay their respective
expenses, if any, incurred in connection with the Bank Merger
(subject to representation 14 below).

7. There is no intercorporate indebtedness existing between HHC
and Bank or between Hancock Bank and Bank that was issued,
acquired, or will be settled at a discount.

8. Bank is not an investment company as defined in Code section
368(a)(2)(F)(iii) and (iv).

9. Bank is not under the jurisdiction of a court in a Title 11 or
similar case within the meaning of section 368(a)(3)(A) of the
Code.

10. The fair market value of the assets of Bank transferred to
Hancock Bank will equal or exceed the sum of the liabilities
assumed by Hancock Bank, plus the amount of the liabilities,
if any, to which the transferred assets are subject.

11. No stock of Hancock Bank will be issued in the Bank Merger.

12. The payment of cash in lieu of fractional shares of HHC Common
Stock is solely for the purpose of avoiding the expense and
inconvenience to HHC of issuing fractional shares and does not
represent separately bargained-for consideration. The total
cash consideration that will be paid in the Bank Merger to the
Bank shareholders instead of issuing fractional shares of HHC
Common Stock will not exceed one percent (1%) of the total
consideration that will be issued in the Bank Merger to the
Bank shareholders in exchange for their shares of Bank Common
Stock. The fractional share interests of each Bank
shareholder will be aggregated, and no Bank

2
<PAGE> 15

shareholder will receive cash (in payment for fractional share
interests) in an amount equal to or greater than the value of
one (1) full share of HHC Common Stock.

13. None of the compensation received by any shareholder-employee
of Bank pursuant to any employment, consulting or similar
arrangement is or will be separate consideration for, or
allocable to, any of his shares of Bank Common Stock; none of
the shares of HHC Common Stock received by any shareholder-
employee of Bank pursuant to the Bank Merger will be separate
consideration for, or allocable to, any employment agreement;
and the compensation paid to any shareholder-employee of Bank
pursuant to any employment, consulting or similar arrangement
is or will be for services actually rendered and will be
commensurate with amounts paid to third parties bargaining at
arm's-length for similar services.

14. Hancock Bank will pay or assume only those expenses of Bank
that are solely and directly related to the Bank Merger in
accordance with the guidelines established in Rev. Rul. 73-54,
1973-1 C.B. 187.

15. The information in the "Background Facts Concerning Corporate
Parties" relative to Bank as set forth in Part I of the WL&S
Tax Opinion is true and accurate as of the date of this
Certificate.

Bank hereby certifies that the officer of the corporation executing
this Certificate has knowledge of the pertinent information set forth herein
and that he has examined the foregoing representations and, to the best of such
officer's knowledge and belief, the representations made are true, complete and
correct as of the date, ______________, 1996, of this Certificate, and he
further certifies that he is duly authorized and empowered to execute and
deliver this Certificate.

COMMUNITY STATE BANK

By:
--------------------------------------

Title:
-----------------------------------

3
<PAGE> 16

CERTIFICATE OF HANCOCK HOLDING COMPANY AND
HANCOCK BANK OF LOUISIANA RELATING TO
SECTION 368 OPINION ON THE BANK MERGER

This Certificate has been requested by the law firm of Watkins Ludlam
& Stennis, P.A. in connection with the rendering of its opinion as to certain
federal income tax consequences relating to the merger of Community State Bank
("Bank") with and into Hancock Bank of Louisiana ("Hancock Bank") (the "Bank
Merger") as such transaction is described in that certain Agreement and Plan of
Reorganization by and between Community Bancshares, Inc. ("CBI"), Bank, Hancock
Holding Company ("HHC"), and Hancock Bank dated as of June 19, 1996 (the
"Merger Agreement"). Watkins Ludlam & Stennis, P. A. will rely on the
representations stated hereinafter, as well as on other facts, assumptions, and
representations described in its opinion letter dated [____________________,
1996 (date of closing)] (the "WL&S Tax Opinion") in opining on the federal
income tax issues stated therein. Accordingly, this Certificate is an integral
part of the WL&S Tax Opinion. Unless otherwise noted, all defined or
capitalized terms used in this Certificate have the same meaning ascribed to
such terms in the Merger Agreement or in the WL&S Tax Opinion.

The following representations are being made in connection with the
Bank Merger:

1. Prior to the Bank Merger, HHC will be in control of Hancock
Bank within the meaning of section 368(c)(1) of the Code.

2. Following the Bank Merger, Hancock Bank will not issue
additional shares of its stock that would result in HHC losing
control of Hancock Bank within the meaning of section
368(c)(1) of the Code.

3. HHC has no plan or intention to reacquire any of the HHC
Common Stock issued in the Bank Merger.

4. HHC has no plan or intention to liquidate Hancock Bank; to
merge Hancock Bank with and into another corporation; to sell
or otherwise dispose of the stock of Hancock Bank; or to cause
Hancock Bank to sell or otherwise dispose of any of the assets
of Bank acquired in the Bank Merger, except for dispositions
made in the ordinary course of business or transfers described
in section 368(a)(2)(C) of the Code.

5. Following the Bank Merger, Hancock Bank will continue the
historic business of Bank or use a significant portion of
Bank's historic business assets in a business.

6. HHC, Hancock Bank, Bank, and the shareholders of Bank will pay
their respective expenses, if any, incurred in connection with
the Bank Merger (subject to representation 9 below).

7. There is no intercorporate indebtedness existing between HHC
and Bank or between Hancock Bank and Bank that was issued,
acquired, or will be settled at a discount.

EXHIBIT C TO TAX OPINION

<PAGE> 17

8. Neither HHC nor Hancock Bank is an investment company as
defined in Code section 368(a)(2)(F)(iii) and (iv).

9. Hancock Bank will pay or assume only those expenses of Bank
that are solely and directly related to the Bank Merger in
accordance with the guidelines established in Rev. Rul. 73-54,
1973-1 C.B. 187.

10. No stock of Hancock Bank will be issued in the Bank Merger.

11. The payment of cash in lieu of fractional shares of HHC Common
Stock is solely for the purpose of avoiding the expense and
inconvenience to HHC of issuing fractional shares and does not
represent separately bargained-for consideration. The total
cash consideration that will be paid in the Bank Merger to
certain of the Bank shareholders instead of issuing fractional
shares of HHC Common Stock will not exceed one percent (1%) of
the total consideration that will be issued in the Bank Merger
to the Bank shareholders in exchange for their shares of Bank
Common Stock. The fractional share interests of each Bank
shareholder of record will be aggregated, and no Bank
shareholder, will receive cash (in payment of fractional share
interests) in an amount equal to or greater than the value of
one (1) full share of HHC Common Stock.

12. The fair market value of the HHC Common Stock portion of the
total consideration paid by HHC in the Bank Merger will, on
the Effective Date of the Bank Merger, constitute at least
fifty-one percent (51%) of the fair market value of the total
consideration paid by HHC in the Bank Merger.

13. The information in the "Background Facts Concerning Corporate
Parties" relative to HHC and Hancock Bank as set forth in Part
I of the WL&S Tax Opinion is true and accurate as of the date
of this Certificate.

HHC and Hancock Bank hereby certify that the officer of the
corporation executing this Certificate has knowledge of the pertinent
information set forth herein and that he has examined the foregoing
representations and, to the best of such officer's knowledge and belief, the
representations made are true, complete and correct as of the date,
________________, 1996, of this Certificate, and he further certifies that he
is duly authorized and empowered to execute and deliver this Certificate.

HANCOCK HOLDING COMPANY

By:
---------------------------------------
Title:
------------------------------------

HANCOCK BANK OF LOUISIANA

By:
---------------------------------------
Title:
------------------------------------

<ARTICLE> 9
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 145,223
<INT-BEARING-DEPOSITS> 2,945
<FED-FUNDS-SOLD> 72,175
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 108,169
<INVESTMENTS-CARRYING> 807,932
<INVESTMENTS-MARKET> 804,416
<LOANS> 1,070,561
<ALLOWANCE> (17,698)
<TOTAL-ASSETS> 2,276,357
<DEPOSITS> 1,939,115
<SHORT-TERM> 82,732
<LIABILITIES-OTHER> 19,028
<LONG-TERM> 2,035
<COMMON> 30,043
0
0
<OTHER-SE> 204,404
<TOTAL-LIABILITIES-AND-EQUITY> 2,276,357
<INTEREST-LOAN> 51,858
<INTEREST-INVEST> 29,536
<INTEREST-OTHER> 3,358
<INTEREST-TOTAL> 84,752
<INTEREST-DEPOSIT> 30,276
<INTEREST-EXPENSE> 32,256
<INTEREST-INCOME-NET> 52,496
<LOAN-LOSSES> 1,801
<SECURITIES-GAINS> (34)
<EXPENSE-OTHER> 39,410
<INCOME-PRETAX> 23,557
<INCOME-PRE-EXTRAORDINARY> 23,557
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 15,800
<EPS-PRIMARY> 1.78
<EPS-DILUTED> 1.78
<YIELD-ACTUAL> 5.12
<LOANS-NON> 5,177
<LOANS-PAST> 4,073
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 17,391
<CHARGE-OFFS> 2,630
<RECOVERIES> 1,136
<ALLOWANCE-CLOSE> 17,698
<ALLOWANCE-DOMESTIC> 17,698
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0

</TABLE>

<PAGE> 1
EXHIBIT 99.1

COMMUNITY BANCSHARES, INC.
583 W. Railroad Avenue
Independence, Louisiana 70443

PROXY

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.

The undersigned hereby appoints Guy C. Billups, Jr., W. R. Allison and Terrell
A. Adams, or any of them (with full power to act alone and to appoint a
substitute), as Proxies, and hereby authorizes them to represent and to vote
all the shares of common stock of Community Bancshares, Inc. ("CBI") held of
record by the undersigned on October 1, 1996, at the special joint meeting of
shareholders to be held on Wednesday, November 13, 1996, at 1:00 p.m., local
time, and at any and all adjournments thereof as follows:

1. The proposal to approve and adopt the Agreement and Plan of
Reorganization and related Company Merger Agreement by and
among Hancock Holding Company and CBI whereby CBI will be
merged with and into Hancock Holding Company and Community
State Bank will be merged with and into Hancock Bank of
Louisiana.

FOR ________ AGAINST _________ ABSTAIN ________

2. In their discretion, the Proxies are authorized to vote upon
such other business as may properly come before the Special
Joint Meeting or any adjournment thereof.

The Board of Directors recommends a vote "FOR" Proposal 1.

***************************************************************************
* *
* THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE *
* SPECIFIED, THIS PROXY WILL BE VOTED FOR PROPOSAL 1. IF ANY OTHER *
* BUSINESS IS PRESENTED AT SUCH MEETING, THIS PROXY WILL BE VOTED BY *
* THOSE NAMED IN THIS PROXY IN THEIR DISCRETION. *
* *
***************************************************************************

Please sign exactly as your name appears on certificate(s)
representing shares to be voted by this proxy. When signing as attorney,
executor, administrator, trustee, or guardian, please give your full title. If
a corporation, please sign in full corporate name by the president or other
authorized officer. If a partnership, please sign in full partnership name by
an authorized person. If shares are held as joint tenants, each holder should
sign.

Dated October 10, 1996

- ------------------------------- --------------------------------
PRINT NAME OF SHAREHOLDER PRINT NAME OF SHAREHOLDER

- ------------------------------- --------------------------------
SIGNATURE OF SHAREHOLDER SIGNATURE OF SHAREHOLDER

***************************************************************************
* *
* PLEASE PROMPTLY COMPLETE, DATE, SIGN AND MAIL THIS PROXY IN THE *
* ENCLOSED POSTAGE-PAID ENVELOPE *
* *
***************************************************************************

<PAGE> 1
EXHIBIT 99.2

COMMUNITY STATE BANK
583 W. Railroad Avenue
Independence, Louisiana 70443

PROXY

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.

The undersigned hereby appoints Guy C. Billups, Jr., W. R. Allison and Terrell
A. Adams, or any of them (with full power to act alone and to appoint a
substitute), as Proxies, and hereby authorizes them to represent and to vote
all the shares of common stock of Community State Bank ("Bank") held of record
by the undersigned on October 1, 1996, at the special joint meeting of
shareholders to be held on Wednesday, November 13, 1996, at 1:00 p.m., local
time, and at any and all adjournments thereof as follows:

1. The proposal to approve and adopt the Agreement and Plan of
Reorganization and related Bank Merger Agreement by and among
Hancock Holding Company, Community Bancshares, Inc. ("CBI"),
Bank and Hancock Bank of Louisiana whereby CBI will be merged
with and into Hancock Holding Company and Bank will be merged
with and into Hancock Bank of Louisiana.

FOR ________ AGAINST _________ ABSTAIN ________

2. In their discretion, the Proxies are authorized to vote upon
such other business as may properly come before the Special
Joint Meeting or any adjournment thereof.

The Board of Directors recommends a vote "FOR" Proposal 1.

Please sign exactly as your name appears on certificate(s) representing
shares to be voted by this proxy. When signing as attorney, executor,
administrator, trustee, or guardian, please give your full title. If a
corporation, please sign in full corporate name by the president or other
authorized officer. If a partnership, please sign in full partnership name by
an authorized person. If shares are held as joint tenants, each holder should
sign.

Dated October 10, 1996

- ------------------------------- --------------------------------
PRINT NAME OF SHAREHOLDER PRINT NAME OF SHAREHOLDER

- ------------------------------- --------------------------------
SIGNATURE OF SHAREHOLDER SIGNATURE OF SHAREHOLDER