BancorpSouth Announces Second Quarter 2017 Financial Results

TUPELO, Miss., July 19, 2017 /PRNewswire/ -- BancorpSouth, Inc. (NYSE: BXS) today announced financial results for the quarter ended June 30, 2017.

Highlights for the second quarter of 2017 included:

  • Net income of $37.9 million, or $0.41 per diluted share.
  • Generated net loan growth of $216.8 million, or 8.1 percent on an annualized basis.
  • Net interest margin increased to 3.52 percent.
  • Earnings were negatively impacted by a pre-tax mortgage servicing rights ("MSR") valuation adjustment of $1.5 million.
  • Net operating income – excluding MSR – of $38.8 million, or $0.42 per diluted share.
  • Credit quality remained stable; recorded provision for credit losses of $1.0 million for the quarter.
  • Total operating expense remained flat compared to the first quarter of 2017 and the second quarter of 2016 and operating efficiency ratio – excluding MSR – declined to 67.3 percent.
  • Repurchased 1,381,634 shares of outstanding common stock at a weighted average price of $29.64 per share.

The Company reported net income of $37.9 million, or $0.41 per diluted share, for the second quarter of 2017 compared with net income of $34.7 million, or $0.37 per diluted share, for the second quarter of 2016 and net income of $38.1 million, or $0.41 per diluted share, for the first quarter of 2017.    

The Company reported net operating income – excluding MSR – of $38.8 million, or $0.42 per diluted share, for the second quarter of 2017 compared to $37.2 million, or $0.39 per diluted share, for the second quarter of 2016 and $36.9 million, or $0.39 per diluted share, for the first quarter of 2017.  Net operating income – excluding MSR – is a non-GAAP financial measure used by management to assess the core operating performance of the Company.  This measure excludes items such as securities gains and losses, MSR valuation adjustments, restructuring charges, merger-related expenses, industry-related legal settlements, and other one-time charges. 

"We are pleased our second quarter results reflect continued earnings growth and improvement in many of our operating metrics," remarked Dan Rollins, Chairman and Chief Executive Officer.  "While our second quarter deposit balances reflect an expected seasonal decline, our loan growth rebounded nicely after a slower first quarter.  We reported net loan growth of $216.8 million, or 8.1 percent on an annualized basis, which resulted in loans and leases surpassing $11 billion for the first time in our Company's history.  Total operating expenses continue to remain flat, which resulted in a decline in the operating efficiency ratio - excluding MSR - to 67.3 percent, the lowest level we have achieved since 2010.  Finally, we continue to be active in our share repurchase program, as we repurchased approximately 1.4 million shares during the quarter at a weighted average price of $29.64 per share."

"Additionally, our net interest margin increased to 3.52 percent from 3.46 percent for the first quarter of this year.  The margin benefited primarily from increases in yields on our loan portfolio.  We expect recent rate increases to continue to provide some benefit to our loan yields as our variable rate loans reach repricing dates over time."  

Net Interest Revenue

Net interest revenue was $117.5 million for the second quarter of 2017, an increase of 4.6 percent from $112.3 million for the second quarter of 2016 and an increase of 2.5 percent from $114.6 million for the first quarter of 2017.  The fully taxable equivalent net interest margin was 3.52 percent for the second quarter of 2017 compared to 3.56 percent for the second quarter of 2016 and 3.46 percent for the first quarter of 2017.  Yields on loans and leases were 4.27 percent for the second quarter of 2017 compared with 4.20 percent for both the second quarter of 2016 and the first quarter of 2017, while yields on total interest earning assets were 3.80 percent for the second quarter of 2017 compared with 3.78 percent for the second quarter of 2016 and 3.70 percent for the first quarter of 2017.  The average cost of deposits was 0.25 percent for the second quarter of 2017 compared to 0.21 percent for the second quarter of 2016 and 0.23 percent for the first quarter of 2017.

Asset, Deposit and Loan Activity

Total assets were $14.8 billion at June 30, 2017 compared with $14.1 billion at June 30, 2016.  Loans and leases, net of unearned income, were $11.0 billion at June 30, 2017 compared with $10.6 billion at June 30, 2016. 

Total deposits were $11.9 billion at June 30, 2017 compared with $11.4 billion at June 30, 2016.  Time deposits decreased $57.3 million, or 3.1 percent, at June 30, 2017 compared to June 30, 2016.  Over the same time period, interest bearing demand deposits increased $256.9 million, or 5.3 percent, while noninterest bearing demand deposits increased $257.0 million, or 8.2 percent, and savings deposits increased $117.4 million, or 7.8 percent.

Provision for Credit Losses and Allowance for Credit Losses

Earnings for the second quarter reflect a provision for credit losses of $1.0 million, compared to a provision of $2.0 million for the second quarter of 2016 and a provision of $1.0 million for the first quarter of 2017.  Net charge-offs for the second quarter of 2017 were $4.6 million, compared with net charge-offs of $1.6 million for the second quarter of 2016 and net recoveries of $0.5 million for the first quarter of 2017.  The allowance for credit losses was $121.6 million, or 1.10 percent of net loans and leases, at June 30, 2017, compared with $126.9 million, or 1.20 percent of net loans and leases, at June 30, 2016 and $125.2 million, or 1.16 percent of net loans and leases, at March 31, 2017.  The increase in net charge-offs and the decline in the allowance for credit losses for the second quarter of 2017 were primarily the result of charge-offs associated with loans for which a specific reserve was recorded in previous quarters. 

Total non-performing assets ("NPAs") were $79.4 million, or 0.72 percent of net loans and leases, at June 30, 2017 compared with $94.9 million, or 0.90 percent of net loans and leases, at June 30, 2016, and $90.0 million, or 0.83 percent of net loans and leases, at March 31, 2017.  Other real estate owned was $7.7 million at June 30, 2017 compared with $14.7 million at June 30, 2016 and $8.5 million at March 31, 2017.

Noninterest Revenue

Noninterest revenue was $68.1 million for the second quarter of 2017, compared with $68.5 million for the second quarter of 2016 and $70.9 million for the first quarter of 2017.  These results included a negative MSR valuation adjustment of $1.5 million for the second quarter of 2017 compared with a negative MSR valuation adjustment of $4.1 million for the second quarter of 2016 and a positive MSR valuation adjustment of $0.9 million for the first quarter of 2017.  Valuation adjustments in the MSR asset are driven primarily by fluctuations in interest rates period over period.   

Excluding the MSR valuation adjustments, mortgage banking revenue was $7.6 million for the second quarter of 2017, compared with $12.0 million for the second quarter of 2016 and $8.1 million for the first quarter of 2017.  Mortgage origination volume for the second quarter of 2017 was $385.9 million, compared with $462.6 million for the second quarter of 2016 and $287.8 million for the first quarter of 2017.

Credit and debit card fee revenue was $9.6 million for the second quarter of 2017, compared with $9.5 million for the second quarter of 2016 and $8.9 million for the first quarter of 2017.  Deposit service charge revenue was $9.7 million for the second quarter of 2017, compared with $11.0 million for the second quarter of 2016 and $9.7 million for the first quarter of 2017.  Insurance commission revenue was $31.1 million for the second quarter of 2017, compared with $28.8 million for the second quarter of 2016 and $32.9 million for the first quarter of 2017.  Wealth management revenue was $5.3 million for the second quarter of 2017, compared with $5.3 million for the second quarter of 2016 and $5.2 million for the first quarter of 2017.    

Noninterest Expense

Noninterest expense for the second quarter of 2017 was $127.6 million, compared with $127.6 million for the second quarter of 2016 and $127.1 million for the first quarter of 2017.  Salaries and employee benefits expense was $81.6 million for the second quarter of 2017 compared to $80.7 million for the second quarter of 2016 and $81.4 million for the first quarter of 2017.  Occupancy expense was $10.5 million for the second quarter of 2017, compared with $10.1 million for the second quarter of 2016 and $10.3 million for the first quarter of 2017.  Other noninterest expense was $29.8 million for the second quarter of 2017, compared to $30.9 million for the second quarter of 2016 and $29.4 million for the first quarter of 2017.

Capital Management

The Company's equity capitalization is comprised entirely of common stock.  BancorpSouth's ratio of shareholders' equity to assets was 11.40 percent at June 30, 2017, compared with 12.12 percent at June 30, 2016 and 11.45 percent at March 31, 2017.  The ratio of tangible shareholders' equity to tangible assets was 9.44 percent at June 30, 2017, compared with 10.11 percent at June 30, 2016 and 9.49 percent at March 31, 2017.

During the second quarter of 2017, the Company repurchased 1,381,634 shares of its outstanding common stock at a weighted average price of $29.64 per share.  During the first quarter of 2017, the Company repurchased 1,613,691 shares at a weighted average price of $30.62 per share.  As of June 30, 2017, the Company had 3,016,615 remaining shares available for repurchase under its current share repurchase authorization, which expires on December 29, 2017.  

Estimated regulatory capital ratios at June 30, 2017 were calculated in accordance with the Basel III capital framework.  BancorpSouth is a "well capitalized" financial holding company, as defined by federal regulations, with Tier 1 risk-based capital of 11.90 percent at June 30, 2017 and total risk-based capital of 12.91 percent, compared with required minimum levels of 8 percent and 10 percent, respectively, in order to qualify for "well capitalized" classification. 

Transactions

On December 19, 2016, BancorpSouth Insurance Services, Inc. announced and closed the acquisition of certain assets of Gonzales, Louisiana based Waguespack & Associates Insurance, Inc.  The agency was formed in 1986 and is expected to produce annual revenues of approximately $3 million.  Waguespack will continue to operate under current leadership in its current location in Gonzales.

On January 21, 2014, the Company announced the signing of a definitive merger agreement with Central Community Corporation, headquartered in Temple, Texas, pursuant to which Central Community Corporation agreed to be merged with and into the Company.  Central Community Corporation is the parent company of First State Bank Central Texas ("First State Bank"), which is headquartered in Austin, Texas.  First State Bank operates 31 full-service banking offices in central Texas.  As of June 30, 2017, Central Community Corporation, on a consolidated basis, reported total assets of $1.4 billion, total loans of $705.8 million and total deposits of $1.1 billion.  Under the terms of the definitive agreement, the Company will issue approximately 7,250,000 shares of the Company's common stock plus $28.5 million in cash for all outstanding shares of Central Community Corporation's capital stock, subject to certain conditions and potential adjustments.  The merger has been unanimously approved by the Board of Directors of each company and was approved by Central Community Corporation shareholders on April 24, 2014.  The Company and Central Community Corporation entered into an extension of the merger effective on October 13, 2016, extending the merger agreement through December 31, 2017 to allow for additional time to obtain the necessary regulatory approvals and to satisfy all closing conditions. The merger agreement remains in effect until terminated by the Board of Directors of the Company or Central Community Corporation.  The terms of the agreement provide for a minimum total deal value of $202.5 million but also allow Central Community Corporation to terminate the agreement if the average closing price of the Company's common stock declines below a certain threshold prior to closing.  The transaction is expected to close shortly after receiving all required regulatory approvals, although the Company can provide no assurance that the merger will close timely or at all.

On January 8, 2014, the Company announced the signing of a definitive merger agreement with Ouachita Bancshares Corp., parent company of Ouachita Independent Bank (collectively referred to as "OIB"), headquartered in Monroe, Louisiana, pursuant to which Ouachita Bancshares Corp. agreed to be merged with and into the Company.  OIB operates 11 full-service banking offices along the I-20 corridor and has a loan production office in Madison, Mississippi.  As of June 30, 2017, OIB, on a consolidated basis, reported total assets of $734.6 million, total loans of $496.1 million and total deposits of $614.2 million.  Under the terms of the definitive agreement, the Company will issue approximately 3,675,000 shares of the Company's common stock plus $22.875 million in cash for all outstanding shares of Ouachita Bancshares Corp.'s capital stock, subject to certain conditions and potential adjustments.  The merger has been unanimously approved by the Board of Directors of each company and was approved by Ouachita Bancshares Corp. shareholders on April 8, 2014.  The Company and Ouachita Bancshares Corp. entered into an extension of the merger effective on October 13, 2016, extending the merger agreement through December 31, 2017 to allow for additional time to obtain the necessary regulatory approvals and to satisfy all closing conditions. The merger agreement remains in effect until terminated by the Board of Directors of the Company or Ouachita Bancshares Corp.  The terms of the agreement provide for a minimum total deal value of $111.1 million but also allow Ouachita Bancshares Corp. to terminate the agreement if the average closing price of the Company's common stock declines below a certain threshold prior to closing.  The transaction is expected to close shortly after receiving all required regulatory approvals, although the Company can provide no assurance that the merger will close timely or at all.

For the most recent information regarding the status of the merger with Central Community Corporation and the status of the merger with Ouachita Bancshares Corp. in our periodic and current reports, please refer to the Form 8-K that was previously filed with the SEC on October 14, 2016.

Summary

Rollins concluded, "We continue to see steady improvement quarter after quarter as we grow our Company while keeping expenses flat.  We are pleased with the success of several of our business development teams during the second quarter.  We reported meaningful net loan growth, our mortgage team originated over $385 million in mortgage loans during the quarter, and our insurance team reported growth in property and casualty commissions and life and health commissions despite continued industry headwinds.  While our story has seemed repetitive for some time now, I'm excited about our opportunity to continue to improve performance and enhance shareholder value going forward."

Non-GAAP Measures and Ratios

This news release presents certain financial measures and ratios that are not calculated in accordance with U.S. generally accepted accounting principles ("GAAP").  A discussion regarding these non-GAAP measures and ratios, including reconciliations of non-GAAP measures to the most directly comparable GAAP measures and definitions for non-GAAP ratios, appears under the caption "Reconciliation of Non-GAAP Measures and Other Non-GAAP Ratio Definitions"  beginning on page 19 of this news release.

Conference Call and Webcast

BancorpSouth will conduct a conference call to discuss its second quarter 2017 results on July 20, 2017, at 10:00 a.m. (Central Time).  This conference call will be an interactive session between management and analysts. Shareholders and other interested parties may listen to this live conference call via Internet webcast by accessing www.BancorpSouth.com/Webcast. The webcast will also be available in archived format at the same address.

About BancorpSouth, Inc.

BancorpSouth, Inc. (NYSE: BXS) is a financial holding company headquartered in Tupelo, Mississippi, with $14.8 billion in assets.  BancorpSouth Bank, a wholly-owned subsidiary of BancorpSouth, Inc., operates 234 full service branch locations as well as additional mortgage, insurance, and loan production offices in Alabama, Arkansas, Florida, Louisiana, Mississippi, Missouri, Tennessee and Texas, including an insurance location in Illinois.  BancorpSouth is committed to a culture of respect, diversity, and inclusion in both its workplace and communities. To learn more, visit our Community Commitment page at www.bancorpsouth.com.  Like us on Facebook; follow us on Twitter: @MyBXS; or connect with us through LinkedIn.

Forward-Looking Statements

Certain statements contained in this news release may not be based upon historical facts and are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements may be identified by their reference to a future period or periods or by the use of forward-looking terminology such as "anticipate," "believe," "could," "estimate," "expect," "foresee," "hope," "intend," "may," "might," "plan," "will," or "would" or future or conditional verb tenses and variations or negatives of such terms. These forward-looking statements include, without limitation, those relating to the terms, timing and closings of the proposed mergers with Ouachita Bancshares Corp. and Central Community Corporation, the acceptance by customers of Ouachita Bancshares Corp. and Central Community Corporation of the Company's products and services if the proposed mergers close, the Company's ability to operate its regulatory compliance programs consistent with federal, state and local laws, including its Bank Secrecy Act ("BSA") and anti-money laundering ("AML") compliance program and its fair lending compliance program, the Company's compliance with the consent order it entered into with the Consumer Financial Protection Bureau and the United States Department of Justice related to the Company's fair lending practices (the "Consent Order"), amortization expense for intangible assets, goodwill impairments, loan impairment, utilization of appraisals and inspections for real estate loans, maturity, renewal or extension of construction, acquisition and development loans, net interest revenue, fair value determinations, the amount of the Company's non-performing loans and leases, credit quality, credit losses, liquidity, off-balance sheet commitments and arrangements, valuation of mortgage servicing rights, allowance and provision for credit losses, early identification and resolution of credit issues, utilization of non-GAAP financial measures, the ability of the Company to collect all amounts due according to the contractual terms of loan agreements, the Company's reserve for losses from representation and warranty obligations, the Company's foreclosure process related to mortgage loans, the resolution of non-performing loans that are collaterally dependent, real estate values, fully-indexed interest rates, interest rate risk, interest rate sensitivity, the impact of interest rates on loan yields, calculation of economic value of equity, impaired loan charge-offs, diversification of the Company's revenue stream, the growth of the Company's insurance business and commission revenue, the growth of the Company's customer base and loan, deposit and fee revenue sources, liquidity needs and strategies, sources of funding, net interest margin, declaration and payment of dividends, the utilization of the Company's share repurchase program, the implementation and execution of cost saving initiatives, improvement in the Company's efficiencies, operating expense trends, future acquisitions and consideration to be used therefor, and the impact of certain claims and ongoing, pending or threatened litigation, administrative and investigatory matters. 

The Company cautions readers not to place undue reliance on the forward-looking statements contained in this news release, in that actual results could differ materially from those indicated in such forward-looking statements as a result of a variety of factors. These factors may include, but are not limited to, the Company's ability to operate its regulatory compliance programs consistent with federal, state and local laws, including its BSA/AML compliance program and its fair lending compliance program, the Company's ability to successfully implement and comply with the Consent Order, the ability of the Company, Ouachita Bancshares Corp. and Central Community Corporation to obtain regulatory approval of and close the proposed mergers, the willingness of Ouachita Bancshares Corp. and Central Community Corporation to proceed with the proposed mergers, the potential impact upon the Company of the delay in the closings of these proposed mergers, the impact of any ongoing, pending or threatened litigation, administrative and investigatory matters involving the Company, conditions in the financial markets and economic conditions generally, the adequacy of the Company's provision and allowance for credit losses to cover actual credit losses, the credit risk associated with real estate construction, acquisition and development loans, limitations on the Company's ability to declare and pay dividends, the availability of capital on favorable terms if and when needed, liquidity risk, governmental regulation, including the Dodd-Frank Act, and supervision of the Company's operations, the short-term and long-term impact of changes to banking capital standards on the Company's regulatory capital and liquidity, the impact of regulations on service charges on the Company's core deposit accounts, the susceptibility of the Company's business to local economic and environmental conditions, the soundness of other financial institutions, changes in interest rates, the impact of monetary policies and economic factors on the Company's ability to attract deposits or make loans, volatility in capital and credit markets, reputational risk, the impact of the loss of any key Company personnel, the impact of hurricanes or other adverse weather events, any requirement that the Company write down goodwill or other intangible assets, diversification in the types of financial services the Company offers, the growth of the Company's insurance business and commission revenue, the growth of the Company's loan, deposit and fee revenue sources, the Company's ability to adapt its products and services to evolving industry standards and consumer preferences, competition with other financial services companies, risks in connection with completed or potential acquisitions, the Company's growth strategy, interruptions or breaches in the Company's information system security, the failure of certain third-party vendors to perform, unfavorable ratings by rating agencies, dilution caused by the Company's issuance of any additional shares of its common stock to raise capital or acquire other banks, bank holding companies, financial holding companies and insurance agencies, the utilization of the Company's share repurchase program, the implementation and execution of cost saving initiatives, other factors generally understood to affect the assets, business, cash flows, financial condition, liquidity, prospects and/or results of operations of financial services companies and other factors detailed from time to time in the Company's press and news releases, reports and other filings with the SEC.  Forward-looking statements speak only as of the date that they were made, and, except as required by law, the Company does not undertake any obligation to update or revise forward-looking statements to reflect events or circumstances that occur after the date of this news release.

 

 

BancorpSouth, Inc.

Selected Financial Information

(Dollars in thousands, except per share data)

(Unaudited)

               
               
 

Quarter Ended

Quarter Ended

Quarter Ended

Quarter Ended

Quarter Ended

Year to Date

Year to Date

 

6/30/2017

3/31/2017

12/31/2016

9/30/2016

6/30/2016

6/30/2017

6/30/2016

Earnings Summary:

             

Interest revenue

$                    126,855

$                    122,926

$                    123,444

$                    122,340

$                    119,423

$            249,781

$            237,395

Interest expense

9,377

8,315

8,057

7,750

7,107

17,692

13,920

Net interest revenue

117,478

114,611

115,387

114,590

112,316

232,089

223,475

Provision for credit losses

1,000

1,000

1,000

-

2,000

2,000

3,000

Net interest revenue, after provision

             

   for credit losses

116,478

113,611

114,387

114,590

110,316

230,089

220,475

Noninterest revenue

68,130

70,869

71,975

69,673

68,526

138,999

133,253

Noninterest expense

127,553

127,109

130,519

128,317

127,561

254,662

269,073

Income before income taxes

57,055

57,371

55,843

55,946

51,281

114,426

84,655

Income tax expense

19,166

19,278

18,173

18,129

16,589

38,444

27,414

Net income

$                      37,889

$                      38,093

$                      37,670

$                      37,817

$                      34,692

$              75,982

$              57,241

               

Balance Sheet - Period End Balances

             

Total assets

$               14,843,130

$               14,866,054

$               14,724,388

$               14,611,483

$               14,137,160

$       14,843,130

$       14,137,160

Total earning assets

13,674,436

13,757,920

13,549,407

13,483,345

12,977,030

13,674,436

12,977,030

Total securities

2,421,295

2,540,887

2,531,676

2,468,199

2,103,883

2,421,295

2,103,883

Loans and leases, net of unearned income

11,018,540

10,801,694

10,811,991

10,658,761

10,575,978

11,018,540

10,575,978

Allowance for credit losses

121,561

125,196

123,736

125,887

126,935

121,561

126,935

Total deposits

11,938,296

12,042,845

11,688,141

11,590,059

11,364,367

11,938,296

11,364,367

Long-term debt

230,000

530,000

530,000

563,495

365,588

230,000

365,588

Total shareholders' equity

1,691,832

1,702,389

1,723,883

1,724,104

1,713,043

1,691,832

1,713,043

               

Balance Sheet - Average Balances

             

Total assets

$               14,741,811

$               14,832,260

$               14,655,360

$               14,366,759

$               14,027,786

$       14,786,784

$       13,939,723

Total earning assets

13,636,415

13,715,612

13,525,284

13,265,266

12,963,056

13,675,795

12,896,528

Total securities

2,497,108

2,507,701

2,479,008

2,186,889

2,069,058

2,502,375

2,053,399

Loans and leases, net of unearned income

10,883,102

10,820,486

10,737,802

10,601,481

10,513,732

10,851,967

10,443,328

Total deposits

11,902,415

11,941,851

11,700,213

11,509,764

11,437,422

11,922,024

11,434,451

Long-term debt

398,132

530,000

534,141

430,886

219,434

463,702

143,592

Total shareholders' equity

1,680,053

1,731,931

1,724,871

1,719,503

1,690,906

1,705,849

1,679,686

               

Nonperforming Assets:

             

Non-accrual loans and leases

$                      63,585

$                      74,439

$                      71,812

$                      70,725

$                      68,638

$              63,585

$              68,638

Loans and leases 90+ days past due, still accruing

1,793

3,063

3,983

2,255

1,875

1,793

1,875

Restructured loans and leases, still accruing

6,303

4,060

26,047

17,936

9,687

6,303

9,687

Non-performing loans (NPLs)

71,681

81,562

101,842

90,916

80,200

71,681

80,200

Other real estate owned

7,704

8,458

7,810

11,391

14,658

7,704

14,658

Non-performing assets (NPAs)

$                      79,385

$                      90,020

$                    109,652

$                    102,307

$                      94,858

$              79,385

$              94,858

               

Financial Ratios and Other Data:

             

Return on average assets

1.03%

1.04%

1.02%

1.05%

0.99%

1.04%

0.83%

Operating return on average assets-excluding MSR*

1.06%

1.01%

0.83%

1.02%

1.07%

1.03%

1.07%

Return on average shareholders' equity

9.05%

8.92%

8.69%

8.75%

8.25%

8.98%

6.85%

Operating return on average shareholders' equity-excluding MSR*

9.27%

8.63%

7.08%

8.49%

8.84%

8.94%

8.87%

Return on tangible equity*

11.08%

11.19%

10.70%

10.68%

9.99%

11.17%

8.24%

Operating return on tangible equity-excluding MSR*

11.35%

10.82%

8.71%

10.36%

10.70%

11.13%

10.66%

Noninterest income to average assets

1.85%

1.94%

1.95%

1.93%

1.96%

1.90%

1.92%

Noninterest expense to average assets

3.47%

3.48%

3.54%

3.55%

3.66%

3.47%

3.88%

Net interest margin-fully taxable equivalent

3.52%

3.46%

3.46%

3.51%

3.56%

3.49%

3.55%

Net interest rate spread

3.40%

3.35%

3.36%

3.41%

3.47%

3.38%

3.46%

Efficiency ratio (tax equivalent)*

67.90%

67.71%

68.79%

68.72%

69.58%

67.80%

74.37%

Operating efficiency ratio-excluding MSR (tax equivalent)*

67.33%

68.43%

73.14%

69.39%

68.01%

67.87%

68.31%

Loan/deposit ratio

92.30%

89.69%

92.50%

91.96%

93.06%

92.30%

93.06%

Price to earnings multiple (avg)

18.83

19.15

22.02

18.86

19.07

18.83

19.07

Market value to book value

164.07%

164.09%

168.76%

126.59%

125.23%

164.07%

125.23%

Market value to book value (avg)

161.24%

166.39%

145.61%

129.73%

124.62%

163.14%

120.37%

Market value to tangible book value

202.52%

202.32%

207.63%

154.87%

153.53%

202.52%

153.53%

Market value to tangible book value (avg)

199.07%

205.16%

179.14%

158.71%

152.78%

201.29%

147.57%

Headcount FTE

3,989

3,973

3,998

3,981

4,028

3,989

4,028

               

*Denotes non-GAAP financial measure.  Refer to related disclosure and reconciliation on pages 19 and 20.

               

Credit Quality Ratios:

             

Net (recoveries) charge-offs to average loans and leases (annualized)

0.17%

(0.02%)

0.12%

0.04%

0.06%

0.08%

0.05%

Provision for credit losses to average loans and leases (annualized)

0.04%

0.04%

0.04%

0.00%

0.08%

0.04%

0.06%

Allowance for credit losses to net loans and leases

1.10%

1.16%

1.14%

1.18%

1.20%

1.10%

1.20%

Allowance for credit losses to non-performing loans and leases

169.59%

153.50%

121.50%

138.47%

158.27%

169.59%

158.27%

Allowance for credit losses to non-performing assets

153.13%

139.08%

112.84%

123.05%

133.82%

153.13%

133.82%

Non-performing loans and leases to net loans and leases

0.65%

0.76%

0.94%

0.85%

0.76%

0.65%

0.76%

Non-performing assets to net loans and leases

0.72%

0.83%

1.01%

0.96%

0.90%

0.72%

0.90%

               

Equity Ratios:

             

Total shareholders' equity to total assets

11.40%

11.45%

11.71%

11.80%

12.12%

11.40%

12.12%

Tangible shareholders' equity to tangible assets*

9.44%

9.49%

9.73%

9.86%

10.11%

9.44%

10.11%

               
               

Capital Adequacy:

             

Common  Equity Tier 1 capital

11.90%

12.16%

12.23%

12.13%

12.17%

11.90%

12.17%

Tier 1 capital

11.90%

12.16%

12.34%

12.32%

12.37%

11.90%

12.37%

Total capital

12.91%

13.21%

13.38%

13.37%

13.45%

12.91%

13.45%

Tier 1 leverage capital

9.93%

9.95%

10.32%

10.53%

10.66%

9.93%

10.66%

   Estimated for current quarter

             
               

Common Share Data:

             

Basic earnings per share

$                          0.41

$                          0.41

$                          0.40

$                          0.40

$                          0.37

$                  0.82

$                  0.61

Diluted earnings per share

0.41

0.41

0.40

0.40

0.37

0.82

0.60

Operating earnings per share*

0.41

0.40

0.40

0.40

0.37

0.81

0.70

Operating earnings per share- excluding MSR*

0.42

0.39

0.33

0.39

0.39

0.82

0.78

Cash dividends per share

0.13

0.13

0.13

0.13

0.10

0.25

0.20

Book value per share

18.59

18.44

18.40

18.33

18.12

18.59

18.12

Tangible book value per share*

15.06

14.95

14.95

14.98

14.78

15.06

14.78

Market value per share (last)

30.50

30.25

31.05

23.20

22.69

30.50

22.69

Market value per share (high)

31.85

32.40

31.75

25.09

24.18

32.40

24.18

Market value per share (low)

28.20

28.10

22.23

20.98

20.19

28.10

18.69

Market value per share (avg)

29.98

30.68

26.79

23.78

22.58

30.32

21.81

Dividend payout ratio

30.48%

30.73%

31.11%

31.17%

22.58%

30.44%

32.99%

Total shares outstanding

91,022,729

92,344,409

93,696,687

94,074,740

94,546,091

91,022,729

94,546,091

Average shares outstanding - basic

91,366,309

93,642,848

93,740,626

94,303,916

94,461,025

92,504,580

94,415,118

Average shares outstanding - diluted

91,530,552

93,829,400

93,966,392

94,563,833

94,694,795

92,686,203

94,644,168

               
               

Yield/Rate:

             

(Taxable equivalent basis)

             

Loans, loans held for sale, and leases net of unearned income

4.27%

4.20%

4.18%

4.20%

4.20%

4.24%

4.19%

Available-for-sale securities:

             

  Taxable

1.37%

1.35%

1.31%

1.33%

1.40%

1.36%

1.40%

  Tax-exempt

5.26%

5.29%

5.29%

5.32%

5.36%

5.28%

5.34%

Short-term investments

0.88%

0.76%

0.41%

0.52%

0.39%

0.80%

0.36%

  Total interest earning assets and revenue

3.80%

3.70%

3.70%

3.74%

3.78%

3.75%

3.77%

Deposits

0.25%

0.23%

0.23%

0.22%

0.21%

0.24%

0.23%

  Demand - interest bearing

0.25%

0.22%

0.20%

0.19%

0.18%

0.23%

0.17%

  Savings

0.12%

0.12%

0.12%

0.12%

0.12%

0.12%

0.12%

  Other time

0.81%

0.79%

0.79%

0.78%

0.75%

0.80%

0.74%

Short-term borrowings

0.69%

0.31%

0.16%

0.15%

0.15%

0.53%

0.14%

Total interest bearing deposits & short-term borrowings

0.37%

0.32%

0.31%

0.30%

0.29%

0.34%

0.28%

Junior subordinated debt

N/A

3.29%

3.53%

3.27%

3.23%

3.29%

3.20%

Long-term debt

1.01%

0.87%

0.73%

0.83%

1.21%

0.93%

1.64%

  Total interest bearing liabilities and expense

0.40%

0.35%

0.34%

0.34%

0.32%

0.37%

0.31%

Interest bearing liabilities to interest earning assets

69.68%

70.24%

69.43%

69.33%

69.47%

69.96%

69.61%

Net interest tax equivalent adjustment

$                        2,248

$                        2,261

$                        2,371

$                        2,462

$                        2,493

$                4,509

$                5,051

               

*Denotes non-GAAP financial measure.  Refer to related disclosure and reconciliation on pages 19 and 20.

 

 

BancorpSouth, Inc.

Consolidated Balance Sheets

(Unaudited)

           
 

Jun-17

Mar-17

Dec-16

Sep-16

Jun-16

 

(Dollars in thousands)

Assets

         

Cash and due from banks

$                178,376

$                147,684

$                184,152

$                172,782

$                186,381

Interest bearing deposits with other banks

49,680

253,738

38,813

151,944

86,472

Available-for-sale securities, at fair value

2,421,295

2,540,887

2,531,676

2,468,199

2,103,883

Loans and leases

11,037,808

10,822,568

10,835,512

10,685,166

10,604,547

  Less:  Unearned income

19,268

20,874

23,521

26,405

28,569

             Allowance for credit losses

121,561

125,196

123,736

125,887

126,935

Net loans and leases

10,896,979

10,676,498

10,688,255

10,532,874

10,449,043

Loans held for sale

184,921

161,600

166,927

204,441

210,698

Premises and equipment, net

306,863

305,250

305,561

305,245

305,694

Accrued interest receivable

40,716

42,329

42,005

41,583

39,645

Goodwill

300,798

300,798

300,798

294,901

294,901

Other identifiable intangibles

19,854

20,865

21,894

19,908

20,831

Bank owned life insurance

260,228

258,518

258,648

257,015

255,240

Other real estate owned

7,704

8,458

7,810

11,391

14,658

Other assets

175,716

149,429

177,849

151,200

169,714

Total Assets

$           14,843,130

$           14,866,054

$           14,724,388

$           14,611,483

$           14,137,160

Liabilities

         

Deposits:

         

  Demand:  Noninterest bearing

$             3,390,428

$             3,401,348

$             3,250,537

$             3,308,361

$             3,133,460

                  Interest bearing

5,095,570

5,182,011

5,034,470

4,877,482

4,838,704

  Savings

1,630,123

1,627,621

1,561,819

1,533,401

1,512,694

  Other time

1,822,175

1,831,865

1,841,315

1,870,815

1,879,509

Total deposits

11,938,296

12,042,845

11,688,141

11,590,059

11,364,367

Securities sold under agreement to repurchase

399,815

375,832

454,002

468,969

415,949

Federal funds purchased

         

   and other short-term borrowing

365,000

-

92,000

-

-

Accrued interest payable

4,259

4,109

3,975

4,107

3,727

Junior subordinated debt securities

-

-

12,888

23,198

23,198

Long-term debt

230,000

530,000

530,000

563,495

365,588

Other liabilities

213,928

210,879

219,499

237,551

251,288

Total Liabilities

13,151,298

13,163,665

13,000,505

12,887,379

12,424,117

Shareholders' Equity

         

Common stock

227,557

230,861

234,242

235,187

236,365

Capital surplus

191,940

226,204

271,292

278,973

286,994

Accumulated other comprehensive loss

(49,861)

(50,360)

(50,937)

(33,549)

(27,587)

Retained earnings

1,322,196

1,295,684

1,269,286

1,243,493

1,217,271

Total Shareholders' Equity

1,691,832

1,702,389

1,723,883

1,724,104

1,713,043

Total Liabilities & Shareholders' Equity

$           14,843,130

$           14,866,054

$           14,724,388

$           14,611,483

$           14,137,160

 

 

BancorpSouth, Inc.

Consolidated Average Balance Sheets

(Unaudited)

           
 

Jun-17

Mar-17

Dec-16

Sep-16

Jun-16

 

(Dollars in thousands)

Assets

         

Cash and due from banks

$                156,387

$                162,696

$                171,791

$                157,233

$                117,193

Interest bearing deposits with other banks

117,414

258,502

165,805

311,545

237,635

Available-for-sale securities, at fair value

2,497,108

2,507,701

2,479,008

2,186,889

2,069,058

Loans and leases

10,903,524

10,843,069

10,763,314

10,629,522

10,543,795

  Less:  Unearned income

20,422

22,583

25,512

28,041

30,063

             Allowance for credit losses

125,578

124,662

125,526

126,820

126,103

Net loans and leases

10,757,524

10,695,824

10,612,276

10,474,661

10,387,629

Loans held for sale

138,792

128,923

142,669

165,351

142,632

Premises and equipment, net

306,483

305,637

305,994

305,707

307,600

Accrued interest receivable

38,702

38,774

38,648

38,125

36,887

Goodwill

300,798

300,798

296,888

294,901

292,620

Other identifiable intangibles

20,218

21,236

20,303

20,248

19,796

Bank owned life insurance

259,182

257,669

257,397

255,967

254,191

Other real estate owned

7,860

8,154

9,084

13,664

15,666

Other assets

141,343

146,346

155,497

142,468

146,879

Total Assets

$           14,741,811

$           14,832,260

$           14,655,360

$           14,366,759

$           14,027,786

Liabilities

         

Deposits:

         

  Demand:  Noninterest bearing

$             3,362,801

$             3,272,876

$             3,344,632

$             3,221,539

$             3,122,153

                  Interest bearing

5,079,388

5,244,069

4,951,906

4,886,920

4,957,827

  Savings

1,626,996

1,587,725

1,543,542

1,525,016

1,510,250

  Other time

1,833,230

1,837,181

1,860,133

1,876,289

1,847,192

Total deposits

11,902,415

11,941,851

11,700,213

11,509,764

11,437,422

Securities sold under agreement to repurchase

412,825

414,272

475,669

454,826

443,340

Federal funds purchased

         

   and other short-term borrowing

151,352

19,545

3,924

11

4,275

Accrued interest payable

4,028

3,867

4,031

3,950

3,509

Junior subordinated debt securities

-

1,146

21,181

23,198

23,198

Long-term debt

398,132

530,000

534,141

430,886

219,434

Other liabilities

193,006

189,648

191,330

224,621

205,702

Total Liabilities

13,061,758

13,100,329

12,930,489

12,647,256

12,336,880

Shareholders' Equity

         

Common stock

228,322

234,285

234,323

235,860

236,176

Capital surplus

199,115

265,685

271,900

283,437

284,818

Accumulated other comprehensive loss

(49,185)

(50,616)

(40,454)

(29,743)

(32,820)

Retained earnings

1,301,801

1,282,577

1,259,102

1,229,949

1,202,732

Total Shareholders' Equity

1,680,053

1,731,931

1,724,871

1,719,503

1,690,906

Total Liabilities & Shareholders' Equity

$           14,741,811

$           14,832,260

$           14,655,360

$           14,366,759

$           14,027,786

 

 

BancorpSouth, Inc.

Consolidated Condensed Statements of Income

(Dollars in thousands, except per share data)

(Unaudited)

                           
 

Quarter Ended

 

Year to Date

 

Jun-17

 

Mar-17

 

Dec-16

 

Sep-16

 

Jun-16

 

Jun-17

 

Jun-16

INTEREST REVENUE:

                         

Loans and leases

$  115,286

 

$  111,498

 

$   112,189

 

$  111,605

 

$  109,078

 

$ 226,784

 

$ 216,883

Deposits with other banks

256

 

485

 

169

 

409

 

229

 

741

 

492

Available-for-sale securities:

                         

    Taxable

7,509

 

7,350

 

7,105

 

6,189

 

6,009

 

14,859

 

11,897

    Tax-exempt

2,562

 

2,581

 

2,771

 

2,898

 

2,924

 

5,143

 

5,956

Loans held for sale

1,242

 

1,012

 

1,210

 

1,239

 

1,183

 

2,254

 

2,167

        Total interest revenue

126,855

 

122,926

 

123,444

 

122,340

 

119,423

 

249,781

 

237,395

                           

INTEREST EXPENSE:

                         

Interest bearing demand

3,204

 

2,786

 

2,514

 

2,361

 

2,208

 

5,990

 

4,371

Savings

483

 

472

 

470

 

462

 

451

 

955

 

894

Other time

3,725

 

3,582

 

3,711

 

3,661

 

3,436

 

7,307

 

6,790

Federal funds purchased and securities sold

                         

   under agreement to repurchase

509

 

322

 

190

 

173

 

159

 

831

 

299

Short-term and long-term debt

1,456

 

1,142

 

985

 

902

 

665

 

2,598

 

1,195

Junior subordinated debt

-

 

9

 

187

 

190

 

187

 

9

 

370

Other

-

 

2

 

-

 

1

 

1

 

2

 

1

        Total interest expense

9,377

 

8,315

 

8,057

 

7,750

 

7,107

 

17,692

 

13,920

                           

        Net interest revenue

117,478

 

114,611

 

115,387

 

114,590

 

112,316

 

232,089

 

223,475

  Provision for credit losses

1,000

 

1,000

 

1,000

 

-

 

2,000

 

2,000

 

3,000

        Net interest revenue, after provision for

                         

          credit losses

116,478

 

113,611

 

114,387

 

114,590

 

110,316

 

230,089

 

220,475

                           

NONINTEREST REVENUE:

                         

Mortgage banking

6,134

 

8,990

 

16,803

 

11,087

 

7,886

 

15,124

 

9,716

Credit card, debit card and merchant fees

9,565

 

8,903

 

9,262

 

9,292

 

9,495

 

18,468

 

18,456

Deposit service charges

9,706

 

9,689

 

9,956

 

11,313

 

11,018

 

19,395

 

22,032

Security gains, net

23

 

1,071

 

39

 

1

 

86

 

1,094

 

88

Insurance commissions

31,126

 

32,940

 

25,709

 

28,194

 

28,803

 

64,066

 

62,052

Wealth management

5,275

 

5,174

 

5,401

 

5,312

 

5,347

 

10,449

 

10,456

Other

6,301

 

4,102

 

4,805

 

4,474

 

5,891

 

10,403

 

10,453

        Total noninterest revenue

68,130

 

70,869

 

71,975

 

69,673

 

68,526

 

138,999

 

133,253

                           

NONINTEREST EXPENSE:

                         

Salaries and employee benefits

81,597

 

81,386

 

80,850

 

80,884

 

80,675

 

162,983

 

162,354

Occupancy, net of rental income

10,455

 

10,302

 

10,294

 

10,412

 

10,109

 

20,757

 

20,382

Equipment

3,438

 

3,568

 

3,563

 

3,423

 

3,295

 

7,006

 

7,060

Deposit insurance assessments

2,261

 

2,484

 

1,818

 

3,227

 

2,582

 

4,745

 

4,870

Regulatory settlement

-

 

-

 

-

 

-

 

-

 

-

 

10,277

Other

29,802

 

29,369

 

33,994

 

30,371

 

30,900

 

59,171

 

64,130

        Total noninterest expense

127,553

 

127,109

 

130,519

 

128,317

 

127,561

 

254,662

 

269,073

        Income before income taxes

57,055

 

57,371

 

55,843

 

55,946

 

51,281

 

114,426

 

84,655

Income tax expense

19,166

 

19,278

 

18,173

 

18,129

 

16,589

 

38,444

 

27,414

        Net income

$    37,889

 

$   38,093

 

$     37,670

 

$    37,817

 

$   34,692

 

$  75,982

 

$  57,241

                           

Net income per share: Basic

$       0.41

 

$       0.41

 

$        0.40

 

$       0.40

 

$       0.37

 

$      0.82

 

$      0.61

                                  Diluted

$       0.41

 

$       0.41

 

$        0.40

 

$       0.40

 

$       0.37

 

$      0.82

 

$      0.60

 

 

BancorpSouth, Inc.

Selected Loan Data

(Dollars in thousands)

(Unaudited)

                   
 

Quarter Ended

 

Jun-17

 

Mar-17

 

Dec-16

 

Sep-16

 

Jun-16

LOAN AND LEASE PORTFOLIO:

                 

Commercial and industrial

$  1,566,459

 

$   1,536,527

 

$   1,612,295

 

$    1,616,152

 

$  1,698,089

Real estate

                 

   Consumer mortgages

2,776,213

 

2,675,672

 

2,643,966

 

2,611,387

 

2,549,989

   Home equity

624,868

 

626,488

 

628,846

 

622,566

 

614,686

   Agricultural

245,646

 

240,534

 

245,377

 

242,171

 

251,566

   Commercial and industrial-owner occupied

1,795,321

 

1,801,613

 

1,764,265

 

1,668,477

 

1,644,618

   Construction, acquisition and development

1,156,901

 

1,136,827

 

1,157,248

 

1,121,386

 

1,021,218

   Commercial real estate

2,341,633

 

2,271,542

 

2,237,719

 

2,240,717

 

2,254,653

Credit cards

104,169

 

103,813

 

109,656

 

107,447

 

108,101

All other

407,330

 

408,678

 

412,619

 

428,458

 

433,058

     Total loans

$ 11,018,540

 

$ 10,801,694

 

$ 10,811,991

 

$  10,658,761

 

$ 10,575,978

                   

ALLOWANCE FOR CREDIT LOSSES:

                 

Balance, beginning of period

$     125,196

 

$      123,736

 

$     125,887

 

$       126,935

 

$     126,506

                   

Loans and leases charged-off:

                 

Commercial and industrial

(3,773)

 

(384)

 

(2,483)

 

(1,180)

 

(748)

Real estate

                 

   Consumer mortgages

(522)

 

(596)

 

(905)

 

(595)

 

(477)

   Home equity

(125)

 

(459)

 

(873)

 

(237)

 

(224)

   Agricultural

(6)

 

(44)

 

-

 

(89)

 

(10)

   Commercial and industrial-owner occupied

(1,460)

 

(404)

 

(20)

 

(261)

 

(660)

   Construction, acquisition and development

(54)

 

(30)

 

(10)

 

(5)

 

(280)

   Commercial real estate

(1)

 

(19)

 

-

 

(14)

 

(870)

Credit cards

(781)

 

(838)

 

(815)

 

(696)

 

(614)

All other

(591)

 

(559)

 

(580)

 

(713)

 

(417)

     Total loans charged-off

(7,313)

 

(3,333)

 

(5,686)

 

(3,790)

 

(4,300)

                   

Recoveries:

                 

Commercial and industrial

1,034

 

490

 

1,019

 

263

 

339

Real estate

                 

   Consumer mortgages

339

 

625

 

413

 

327

 

499

   Home equity

110

 

356

 

71

 

109

 

246

   Agricultural

34

 

41

 

15

 

28

 

96

   Commercial and industrial-owner occupied

481

 

193

 

201

 

117

 

101

   Construction, acquisition and development

208

 

1,324

 

195

 

382

 

524

   Commercial real estate

75

 

69

 

176

 

1,043

 

509

Credit cards

205

 

249

 

208

 

262

 

199

All other

192

 

446

 

237

 

211

 

216

     Total recoveries

2,678

 

3,793

 

2,535

 

2,742

 

2,729

                   

Net recoveries (charge-offs)

(4,635)

 

460

 

(3,151)

 

(1,048)

 

(1,571)

                   

Provision charged to operating expense

1,000

 

1,000

 

1,000

 

-

 

2,000

Balance, end of period

$     121,561

 

$      125,196

 

$     123,736

 

$       125,887

 

$     126,935

                   

Average loans for period

$ 10,883,102

 

$ 10,820,486

 

$ 10,737,802

 

$ 10,601,481

 

$ 10,513,732

                   

Ratio:

                 

Net (recoveries) charge-offs to average loans (annualized)

0.17%

 

(0.02%)

 

0.12%

 

0.04%

 

0.06%

 

 

BancorpSouth, Inc.

Selected Loan Data

(Dollars in thousands)

(Unaudited)

                   
 

Quarter Ended

 

Jun-17

 

Mar-17

 

Dec-16

 

Sep-16

 

Jun-16

NON-PERFORMING ASSETS

                 

NON-PERFORMING LOANS AND LEASES:

                 

  Nonaccrual Loans and Leases

                 

    Commercial and industrial

$      9,988

 

$       13,959

 

$       13,679

 

$    11,659

 

$         8,675

    Real estate

                 

       Consumer mortgages

24,690

 

21,543

 

21,084

 

20,196

 

19,309

       Home equity

3,183

 

3,157

 

3,817

 

3,721

 

2,734

       Agricultural

6,172

 

5,180

 

1,546

 

1,194

 

1,107

       Commercial and industrial-owner occupied

10,215

 

15,135

 

10,791

 

11,983

 

16,021

       Construction, acquisition and development

2,223

 

1,466

 

7,022

 

6,939

 

6,086

       Commercial real estate

6,418

 

13,638

 

13,402

 

14,793

 

14,197

    Credit cards

122

 

87

 

161

 

121

 

159

    All other

574

 

274

 

310

 

119

 

350

         Total nonaccrual loans and leases

$    63,585

 

$       74,439

 

$       71,812

 

$    70,725

 

$       68,638

                   

  Loans and Leases 90+ Days Past Due, Still Accruing:

1,793

 

3,063

 

3,983

 

2,255

 

1,875

  Restructured Loans and Leases, Still Accruing

6,303

 

4,060

 

26,047

 

17,936

 

9,687

     Total non-performing loans and leases

71,681

 

81,562

 

101,842

 

90,916

 

80,200

                   

OTHER REAL ESTATE OWNED:

7,704

 

8,458

 

7,810

 

11,391

 

14,658

                   

Total Non-performing Assets

$    79,385

 

$       90,020

 

$      109,652

 

$  102,307

 

$       94,858

                   

Additions to Nonaccrual Loans and Leases During the Quarter

$    17,020

 

$       23,348

 

$       16,007

 

$    17,319

 

$       10,553

                   

  Loans and Leases 30-89 Days Past Due, Still Accruing:

                 

    Commercial and industrial

$      3,304

 

$         4,083

 

$         3,449

 

$      6,736

 

$         3,748

    Real estate

                 

       Consumer mortgages

12,395

 

10,149

 

14,490

 

15,443

 

15,784

       Home equity

2,590

 

1,720

 

3,072

 

3,854

 

2,842

       Agricultural

197

 

364

 

1,283

 

616

 

367

       Commercial and industrial-owner occupied

2,228

 

1,949

 

2,120

 

1,712

 

2,854

       Construction, acquisition and development

2,639

 

3,306

 

1,344

 

1,272

 

1,137

       Commercial real estate

1,183

 

2,631

 

653

 

15,221

 

3,776

    Credit cards

705

 

800

 

726

 

774

 

677

    All other

1,203

 

776

 

673

 

1,089

 

712

         Total Loans and Leases 30-89 days past due, still accruing

$    26,444

 

$       25,778

 

$       27,810

 

$    46,717

 

$       31,897

                   

Credit Quality Ratios:

                 

Provision for credit losses to average loans and leases (annualized)

0.04%

 

0.04%

 

0.04%

 

0.00%

 

0.08%

Allowance for credit losses to net loans and leases

1.10%

 

1.16%

 

1.14%

 

1.18%

 

1.20%

Allowance for credit losses to non-performing loans and leases

169.59%

 

153.50%

 

121.50%

 

138.47%

 

158.27%

Allowance for credit losses to non-performing assets

153.13%

 

139.08%

 

112.84%

 

123.05%

 

133.82%

Non-performing loans and leases to net loans and leases

0.65%

 

0.76%

 

0.94%

 

0.85%

 

0.76%

Non-performing assets to net loans and leases

0.72%

 

0.83%

 

1.01%

 

0.96%

 

0.90%

 

 

Selected Loan Data

(Dollars in thousands)

(Unaudited)

                           
 

June 30, 2017

     

Special

                   
 

Pass

 

Mention

 

Substandard

 

Doubtful

 

Loss

 

Impaired

 

Total

LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE:

                         

Commercial and industrial

$  1,516,992

 

$                -

 

$       41,604

 

$        301

 

$                -

 

$    7,562

 

$   1,566,459

Real estate

                         

   Consumer mortgages

2,710,161

 

-

 

63,352

 

276

 

-

 

2,424

 

2,776,213

   Home equity

613,216

 

-

 

10,802

 

-

 

-

 

850

 

624,868

   Agricultural

225,504

 

8,157

 

6,740

 

-

 

-

 

5,245

 

245,646

   Commercial and industrial-owner occupied

1,734,306

 

3,161

 

50,644

 

-

 

-

 

7,210

 

1,795,321

   Construction, acquisition and development

1,136,104

 

6,253

 

14,298

 

-

 

-

 

246

 

1,156,901

   Commercial real estate

2,299,529

 

-

 

37,214

 

169

 

-

 

4,721

 

2,341,633

Credit cards

104,169

 

-

 

-

 

-

 

-

 

-

 

104,169

All other

400,191

 

-

 

6,900

 

239

 

-

 

-

 

407,330

     Total loans

$ 10,740,172

 

$       17,571

 

$      231,554

 

$        985

 

$                -

 

$  28,258

 

$ 11,018,540

                           
                           
 

March 31, 2017

     

Special

                   
 

Pass

 

Mention

 

Substandard

 

Doubtful

 

Loss

 

Impaired

 

Total

LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE:

                         

Commercial and industrial

$  1,489,753

 

$                -

 

$       34,936

 

$            -

 

$                -

 

$  11,838

 

$   1,536,527

Real estate

                         

   Consumer mortgages

2,611,576

 

517

 

62,045

 

258

 

-

 

1,276

 

2,675,672

   Home equity

615,753

 

-

 

9,881

 

-

 

-

 

854

 

626,488

   Agricultural

227,902

 

-

 

8,899

 

141

 

-

 

3,592

 

240,534

   Commercial and industrial-owner occupied

1,734,995

 

3,663

 

50,908

 

-

 

-

 

12,047

 

1,801,613

   Construction, acquisition and development

1,124,929

 

-

 

11,621

 

-

 

-

 

277

 

1,136,827

   Commercial real estate

2,216,915

 

-

 

42,614

 

-

 

-

 

12,013

 

2,271,542

Credit cards

103,813

 

-

 

-

 

-

 

-

 

-

 

103,813

All other

402,287

 

-

 

6,291

 

100

 

-

 

-

 

408,678

     Total loans

$ 10,527,923

 

$         4,180

 

$      227,195

 

$        499

 

$                -

 

$  41,897

 

$ 10,801,694

 

 

BancorpSouth, Inc.

Geographical Information

(Dollars in thousands)

(Unaudited)

                                   
 

June 30, 2017

 

Alabama

                               
 

and Florida

                               
 

Panhandle

 

Arkansas

 

Louisiana

 

Mississippi

 

Missouri

 

Tennessee

 

Texas

 

Other

 

Total

LOAN AND LEASE PORTFOLIO:

                                 

Commercial and industrial

$   141,372

 

$   193,526

 

$   194,235

 

$   572,109

 

$     91,371

 

$   110,161

 

$   207,777

 

$     55,908

 

$  1,566,459

Real estate

                                 

   Consumer mortgages

374,392

 

322,148

 

239,660

 

867,821

 

93,572

 

305,685

 

539,131

 

33,804

 

2,776,213

   Home equity

96,296

 

45,630

 

69,035

 

232,247

 

21,535

 

141,970

 

16,271

 

1,884

 

624,868

   Agricultural

8,244

 

83,788

 

25,615

 

67,496

 

8,163

 

13,577

 

38,757

 

6

 

245,646

   Commercial and industrial-owner occupied

210,072

 

195,859

 

212,839

 

718,767

 

46,545

 

157,145

 

254,094

 

-

 

1,795,321

   Construction, acquisition and development

120,174

 

70,919

 

52,951

 

352,608

 

18,399

 

166,344

 

375,506

 

-

 

1,156,901

   Commercial real estate

305,774

 

361,460

 

233,986

 

581,939

 

202,629

 

217,300

 

438,545

 

-

 

2,341,633

Credit cards

-

 

-

 

-

 

-

 

-

 

-

 

-

 

104,169

 

104,169

All other

51,849

 

40,196

 

24,271

 

215,870

 

3,411

 

21,951

 

43,433

 

6,349

 

407,330

     Total loans

$ 1,308,173

 

$ 1,313,526

 

$ 1,052,592

 

$3,608,857

 

$   485,625

 

$ 1,134,133

 

$ 1,913,514

 

$   202,120

 

$ 11,018,540

                                   

NON-PERFORMING LOANS AND LEASES:

                                 

Commercial and industrial

$         380

 

$         887

 

$       1,482

 

$      5,637

 

$       1,250

 

$           93

 

$       1,364

 

$         112

 

$       11,205

Real estate

                                 

   Consumer mortgages

927

 

3,763

 

1,177

 

12,824

 

218

 

1,725

 

4,748

 

1,095

 

26,477

   Home equity

382

 

793

 

819

 

921

 

80

 

249

 

-

 

2

 

3,246

   Agricultural

-

 

405

 

204

 

5,563

 

-

 

-

 

16

 

-

 

6,188

   Commercial and industrial-owner occupied

1,178

 

2,860

 

839

 

6,178

 

1,067

 

503

 

662

 

-

 

13,287

   Construction, acquisition and development

45

 

745

 

237

 

1,062

 

55

 

49

 

381

 

-

 

2,574

   Commercial real estate

989

 

1,067

 

2,117

 

2,135

 

-

 

13

 

441

 

-

 

6,762

Credit cards

-

 

-

 

-

 

-

 

-

 

-

 

-

 

1,343

 

1,343

All other

25

 

-

 

-

 

551

 

-

 

17

 

6

 

-

 

599

     Total loans

$       3,926

 

$     10,520

 

$       6,875

 

$    34,871

 

$       2,670

 

$       2,649

 

$       7,618

 

$       2,552

 

$       71,681

                                   

NON-PERFORMING LOANS AND LEASES

                                 

   AS A PERCENTAGE OF OUTSTANDING:

                                 

Commercial and industrial

0.27%

 

0.46%

 

0.76%

 

0.99%

 

1.37%

 

0.08%

 

0.66%

 

0.20%

 

0.72%

Real estate

                                 

   Consumer mortgages

0.25%

 

1.17%

 

0.49%

 

1.48%

 

0.23%

 

0.56%

 

0.88%

 

3.24%

 

0.95%

   Home equity

0.40%

 

1.74%

 

1.19%

 

0.40%

 

0.37%

 

0.18%

 

0.00%

 

0.11%

 

0.52%

   Agricultural

0.00%

 

0.48%

 

0.80%

 

8.24%

 

0.00%

 

0.00%

 

0.04%

 

0.00%

 

2.52%

   Commercial and industrial-owner occupied

0.56%

 

1.46%

 

0.39%

 

0.86%

 

2.29%

 

0.32%

 

0.26%

 

N/A

 

0.74%

   Construction, acquisition and development

0.04%

 

1.05%

 

0.45%

 

0.30%

 

0.30%

 

0.03%

 

0.10%

 

N/A

 

0.22%

   Commercial real estate

0.32%

 

0.30%

 

0.90%

 

0.37%

 

0.00%

 

0.01%

 

0.10%

 

N/A

 

0.29%

Credit cards

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

 

N/A

 

1.29%

 

1.29%

All other

0.05%

 

0.00%

 

0.00%

 

0.26%

 

0.00%

 

0.08%

 

0.01%

 

0.00%

 

0.15%

     Total loans

0.30%

 

0.80%

 

0.65%

 

0.97%

 

0.55%

 

0.23%

 

0.40%

 

1.26%

 

0.65%

 

 

BancorpSouth, Inc.

Noninterest Revenue and Expense

(Dollars in thousands)

(Unaudited)

                           
 

Quarter Ended

 

Year to Date

 

Jun-17

 

Mar-17

 

Dec-16

 

Sep-16

 

Jun-16

 

Jun-17

 

Jun-16

NONINTEREST REVENUE:

                         

Mortgage banking excl. MSR and MSR Hedge market value adj

$      7,643

 

$         8,056

 

$         5,561

 

$      9,274

 

$       11,978

 

$  15,699

 

$  21,762

MSR and MSR Hedge market value adjustment

(1,509)

 

934

 

11,242

 

1,813

 

(4,092)

 

(575)

 

(12,046)

Credit card, debit card and merchant fees

9,565

 

8,903

 

9,262

 

9,292

 

9,495

 

18,468

 

18,456

Deposit service charges

9,706

 

9,689

 

9,956

 

11,313

 

11,018

 

19,395

 

22,032

Securities gains, net

23

 

1,071

 

39

 

1

 

86

 

1,094

 

88

Insurance commissions

31,126

 

32,940

 

25,709

 

28,194

 

28,803

 

64,066

 

62,052

Trust income

3,679

 

3,561

 

3,874

 

3,641

 

3,493

 

7,240

 

6,923

Annuity fees

264

 

349

 

257

 

446

 

465

 

613

 

942

Brokerage commissions and fees

1,332

 

1,264

 

1,270

 

1,225

 

1,389

 

2,596

 

2,591

Bank-owned life insurance

1,710

 

1,669

 

2,104

 

1,775

 

1,813

 

3,379

 

3,706

Other miscellaneous income

4,591

 

2,433

 

2,701

 

2,699

 

4,078

 

7,024

 

6,747

     Total noninterest revenue

$    68,130

 

$       70,869

 

$       71,975

 

$    69,673

 

$       68,526

 

$ 138,999

 

$ 133,253

                           

NONINTEREST EXPENSE:

                         

Salaries and employee benefits

$    81,597

 

$       81,386

 

$       80,850

 

$    80,884

 

$       80,675

 

$ 162,983

 

$ 162,354

Occupancy, net of rental income

10,455

 

10,302

 

10,294

 

10,412

 

10,109

 

20,757

 

20,382

Equipment

3,438

 

3,568

 

3,563

 

3,423

 

3,295

 

7,006

 

7,060

Deposit insurance assessments

2,261

 

2,484

 

1,818

 

3,227

 

2,582

 

4,745

 

4,870

Regulatory settlement

-

 

-

 

-

 

-

 

-

 

-

 

10,277

Advertising

1,037

 

663

 

2,443

 

925

 

1,043

 

1,700

 

1,676

Foreclosed property expense

960

 

1,050

 

1,005

 

859

 

1,309

 

2,010

 

2,490

Telecommunications

1,233

 

1,147

 

1,245

 

1,288

 

1,259

 

2,380

 

2,554

Public relations

654

 

720

 

716

 

718

 

599

 

1,374

 

1,260

Data processing

7,230

 

6,623

 

6,903

 

6,856

 

6,685

 

13,853

 

13,076

Computer software

2,913

 

2,981

 

3,013

 

2,976

 

2,732

 

5,894

 

5,392

Amortization of intangibles

1,010

 

1,030

 

963

 

923

 

869

 

2,040

 

1,749

Legal

1,330

 

1,229

 

1,190

 

1,064

 

1,754

 

2,559

 

6,289

Merger expense

-

 

-

 

-

 

-

 

1

 

-

 

2

Postage and shipping

1,080

 

1,175

 

1,075

 

1,059

 

985

 

2,255

 

2,102

Other miscellaneous expense

12,355

 

12,751

 

15,441

 

13,703

 

13,664

 

25,106

 

27,540

     Total noninterest expense

$  127,553

 

$      127,109

 

$      130,519

 

$  128,317

 

$      127,561

 

$ 254,662

 

$ 269,073

                           

INSURANCE COMMISSIONS:

                         

Property and casualty commissions

$    22,363

 

$       19,755

 

$       19,098

 

$    20,927

 

$       20,417

 

42,118

 

$  40,294

Life and health commissions

6,623

 

6,465

 

5,757

 

5,897

 

6,252

 

13,088

 

11,867

Risk management income

600

 

648

 

610

 

674

 

592

 

1,248

 

1,215

Other

1,540

 

6,072

 

244

 

696

 

1,542

 

7,612

 

8,676

     Total insurance commissions

$    31,126

 

$       32,940

 

$       25,709

 

$    28,194

 

$       28,803

 

$  64,066

 

$  62,052

 

 

BancorpSouth, Inc.

Selected Additional Information

(Dollars in thousands)

(Unaudited)

                   
 

Quarter Ended

 

Jun-17

 

Mar-17

 

Dec-16

 

Sep-16

 

Jun-16

MORTGAGE SERVICING RIGHTS:

                 

Fair value, beginning of period

$     67,161

 

$       65,263

 

$       51,930

 

$     48,108

 

$       50,544

Additions to mortgage servicing rights:

                 

   Originations of servicing assets

2,772

 

2,866

 

4,022

 

4,349

 

3,723

Changes in fair value:

                 

   Due to payoffs/paydowns

(2,825)

 

(1,876)

 

(2,447)

 

(2,338)

 

(2,066)

   Due to change in valuation inputs or

                 

     assumptions used in the valuation model

(1,616)

 

909

 

11,759

 

1,813

 

(4,092)

   Other changes in fair value

(1)

 

(1)

 

(1)

 

(2)

 

(1)

Fair value, end of period

$     65,491

 

$       67,161

 

$       65,263

 

$     51,930

 

$       48,108

                   

MORTGAGE BANKING REVENUE:

                 

Production revenue:

                 

   Origination

$       5,771

 

$         5,117

 

$         3,335

 

$       6,973

 

$         9,366

   Servicing

4,697

 

4,815

 

4,673

 

4,639

 

4,678

   Payoffs/Paydowns

(2,825)

 

(1,876)

 

(2,447)

 

(2,338)

 

(2,066)

     Total production revenue

7,643

 

8,056

 

5,561

 

9,274

 

11,978

Market value adjustment on MSR

(1,616)

 

909

 

11,759

 

1,813

 

(4,092)

Market value adjustment on MSR Hedge

107

 

25

 

(517)

 

-

 

-

Total mortgage lending revenue

$       6,134

 

$         8,990

 

$       16,803

 

$     11,087

 

$         7,886

                   
                   
                   

Mortgage loans serviced

$ 6,431,273

 

$   6,429,617

 

$   6,384,649

 

$ 6,285,027

 

$   6,156,258

MSR/mtg loans serviced

1.02%

 

1.04%

 

1.01%

 

0.83%

 

0.78%

                   

AVAILABLE-FOR-SALE SECURITIES, at fair value

                 

U.S. Government agencies

$ 1,713,374

 

$   1,818,180

 

$   1,789,427

 

$ 1,691,866

 

$   1,310,803

Government agency issued residential

                 

   mortgage-back securities

159,246

 

167,542

 

176,243

 

184,095

 

180,178

Government agency issued commercial

                 

   mortgage-back securities

170,642

 

170,082

 

172,279

 

178,826

 

193,475

Obligations of states and political subdivisions

345,130

 

352,324

 

360,005

 

384,996

 

399,391

Other

32,903

 

32,759

 

33,722

 

28,416

 

20,036

Total available-for-sale securities

$ 2,421,295

 

$   2,540,887

 

$   2,531,676

 

$ 2,468,199

 

$   2,103,883

 

 

BancorpSouth, Inc.

Reconciliation of Non-GAAP Measures and Other Non-GAAP Ratio Definitions

(Dollars in thousands, except per share amounts)

(Unaudited)

                               
                               

Management evaluates the Company's capital position and operating performance by utilizing certain financial measures not calculated in accordance with U.S. Generally Accepted Accounting Principles (GAAP), including net operating income, net operating income-excluding MSR, total operating expense, tangible shareholders' equity to tangible assets, return on tangible equity, operating return on tangible equity-excluding MSR,  operating return on average assets-excluding MSR, operating return on average shareholders' equity-excluding MSR, tangible book value per share, operating earnings per share, operating earnings per share-excluding MSR, efficiency ratio (tax equivalent) and operating efficiency ratio-excluding MSR (tax equivalent).  The Company has included these non-GAAP financial measures in this news release for the applicable periods presented.  Management believes that the presentation of these non-GAAP financial measures (i) provides important supplemental information that contributes to a proper understanding of the Company's capital position and operating performance, (ii) enables a more complete understanding of factors and trends affecting the Company's business and (iii) allows investors to evaluate the Company's performance in a manner similar to management, the financial services industry, bank stock analysts and bank regulators.  Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are presented in the tables below.  These non-GAAP financial measures should not be considered as substitutes for GAAP financial measures, and the Company strongly encourages investors to review the GAAP financial measures included in this news release and not to place undue reliance upon any single financial measure.  In addition, because non-GAAP financial measures are not standardized, it may not be possible to compare the non-GAAP financial measures presented in this news release with other companies' non-GAAP financial measures having the same or similar names.

                               

Reconciliation of Net Operating Income and Net Operating Income-Excluding MSR to Net Income:

           
                               
     

Quarter ended

 

Year to Date

     

6/30/2017

 

3/31/2017

 

12/31/2016

 

9/30/2016

 

6/30/2016

 

6/30/2017

 

6/30/2016

                               

Net income

 

$      37,889

 

$   38,093

 

$          37,670

 

$          37,817

 

$          34,692

 

$          75,982

 

$         57,241

Plus:

Merger expense, net of tax

 

-

 

-

 

-

 

-

 

1

 

-

 

2

 

Regulatory related charges, net of tax

 

-

 

-

 

-

 

-

 

-

 

-

 

9,412

Less:

Security gains, net of tax

 

14

 

664

 

25

 

-

 

53

 

678

 

55

Net operating income

 

$      37,875

 

$   37,429

 

$          37,645

 

$          37,817

 

$          34,640

 

$          75,304

 

$         66,600

                               

Less:

MSR market value adjustment, net of tax

(936)

 

579

 

6,970

 

1,124

 

(2,537)

 

(357)

 

(7,468)

Net operating income-excluding MSR

 

$      38,811

 

$   36,850

 

$          30,675

 

$          36,693

 

$          37,177

 

$          75,661

 

$         74,068

                               
                               

Reconciliation of Total Operating Expense to Total Noninterest Expense:

                   
                               

Total noninterest expense

 

$    127,553

 

$ 127,109

 

$        130,519

 

$         128,317

 

$         127,561

 

$         254,662

 

$       269,073

Less:

Merger expense

 

-

 

-

 

-

 

-

 

1

 

-

 

2

 

Regulatory related charges

 

-

 

-

 

-

 

-

 

-

 

-

 

13,777

Total operating expense

 

$    127,553

 

$ 127,109

 

$        130,519

 

$         128,317

 

$         127,560

 

$         254,662

 

$       255,294

 

 

BancorpSouth, Inc.

Reconciliation of Non-GAAP Measures and Other Non-GAAP Ratio Definitions

(Dollars in thousands, except per share amounts)

(Unaudited)

                               
                               
                               

Reconciliation of Tangible Assets and Tangible Shareholders' Equity to 

Total Assets and Total Shareholders' Equity:

                               
     

Quarter ended

 

Year to Date

     

6/30/2017

 

3/31/2017

 

12/31/2016

 

9/30/2016

 

6/30/2016

 

6/30/2017

 

6/30/2016

Tangible assets

                           

Total assets

 

$ 14,843,130

 

$  14,866,054

 

$  14,724,388

 

$ 14,611,483

 

$  14,137,160

 

$ 14,843,130

 

$ 14,137,160

Less:  

Goodwill

 

300,798

 

300,798

 

300,798

 

294,901

 

294,901

 

300,798

 

294,901

 

Other identifiable intangible assets

 

19,854

 

20,865

 

21,894

 

19,908

 

20,831

 

19,854

 

20,831

Total tangible assets

 

$ 14,522,478

 

$  14,544,391

 

$  14,401,696

 

$ 14,296,674

 

$  13,821,428

 

$ 14,522,478

 

$ 13,821,428

                               

Tangible shareholders' equity

                           

Total shareholders' equity

 

$   1,691,832

 

$    1,702,389

 

$    1,723,883

 

$   1,724,104

 

$    1,713,043

 

$   1,691,832

 

$   1,713,043

Less:

Goodwill

 

300,798

 

300,798

 

300,798

 

294,901

 

294,901

 

300,798

 

294,901

 

Other identifiable intangible assets

 

19,854

 

20,865

 

21,894

 

19,908

 

20,831

 

19,854

 

20,831

Total tangible shareholders' equity

 

$   1,371,180

 

$    1,380,726

 

$    1,401,191

 

$   1,409,295

 

$    1,397,311

 

$   1,371,180

 

$   1,397,311

                               

Total average assets

 

$ 14,741,811

 

$  14,832,260

 

$  14,655,360

 

$ 14,366,759

 

$  14,027,786

 

$ 14,786,784

 

$ 13,939,723

Total shares of common stock outstanding

 

91,022,729

 

92,344,409

 

93,696,687

 

94,074,740

 

94,546,091

 

91,022,729

 

94,546,091

Average shares outstanding-diluted

 

91,530,552

 

93,829,400

 

93,966,392

 

94,563,833

 

94,694,795

 

92,686,203

 

94,644,168

                               

Tangible shareholders' equity to tangible assets (1)

 

9.44%

 

9.49%

 

9.73%

 

9.86%

 

10.11%

 

9.44%

 

10.11%

Return on tangible equity (2)

 

11.08%

 

11.19%

 

10.70%

 

10.68%

 

9.99%

 

11.17%

 

8.24%

Operating return on tangible equity-excluding MSR (3)

 

11.35%

 

10.82%

 

8.71%

 

10.36%

 

10.70%

 

11.13%

 

10.66%

Operating return on average assets-excluding MSR (4)

 

1.06%

 

1.01%

 

0.83%

 

1.02%

 

1.07%

 

1.03%

 

1.07%

Operating return on average shareholders' equity-excluding MSR (5)

9.27%

 

8.63%

 

7.08%

 

8.49%

 

8.84%

 

8.94%

 

8.87%

Tangible book value per share (6)

 

$         15.06

 

$          14.95

 

$          14.95

 

$         14.98

 

$         14.78

 

$         15.06

 

$         14.78

Operating earnings per share (7)

 

$           0.41

 

$            0.40

 

$            0.40

 

$           0.40

 

$           0.37

 

$           0.81

 

$           0.70

Operating earnings per share-excluding MSR (8)

 

$           0.42

 

$            0.39

 

$            0.33

 

$           0.39

 

$           0.39

 

$           0.82

 

$           0.76

                               
                               

(1)

Tangible shareholders' equity to tangible assets is defined by the Company as total shareholders' equity less goodwill and other identifiable intangible assets, divided by the difference of total assets
less goodwill and other identifiable intangible assets.

                               

(2)

Return on tangible equity is defined by the Company as annualized net income divided by tangible shareholders' equity.

                               

(3)

Operating return on tangible equity-excluding MSR is defined by the Company as annualized net operating income-excluding MSR divided by tangible shareholders' equity.

                               

(4)

Operating return on average assets-excluding MSR is defined by the Company as annualized net operating income-excluding MSR divided by total average assets.

                               

(5)

Operating return on average shareholders' equity-excluding MSR is defined by the Company as annualized net operating income-excluding MSR divided by average shareholders' equity.

                               

(6)

Tangible book value per share is defined by the Company as tangible shareholders' equity divided by total shares of common stock outstanding.

                               

(7)

Operating earnings per share is defined by the Company as net operating income divided by average shares outstanding-diluted.

                               

(8)

Operating earnings per share-excluding MSR is defined by the Company as net operating income-excluding MSR divided by average shares outstanding-diluted.

                               

Efficiency Ratio (tax equivalent) and Operating Efficiency Ratio-excluding MSR (tax equivalent) Definitions

               

The efficiency ratio (tax equivalent) and the operating efficiency ratio-excluding MSR (tax equivalent) are supplemental financial measures utilized in management's internal evaluation of the
Company's use of resources and are not defined under GAAP. The efficiency ratio (tax equivalent) is calculated by dividing total noninterest expense by total revenue, which includes net
interest income plus noninterest income plus the tax equivalent adjustment.  The operating efficiency ratio-excluding MSR (tax equivalent) excludes expense items otherwise disclosed as non-
operating from total noninterest expense.  In addition, the MSR valuation adjustment as well as securities gains and losses are excluded from total revenue.  

 

SOURCE BancorpSouth, Inc.

For further information: John G. Copeland, Senior Executive Vice President and Chief Financial Officer, 662/680-2536 or Will Fisackerly, Senior Vice President and Director of Corporate Finance, 662/680-2475

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