BancorpSouth Reports Record Quarterly Earnings

TUPELO, Miss., April 18, 2018 /PRNewswire/ -- BancorpSouth Bank (NYSE: BXS) (the "Company") today announced financial results for the quarter ended March 31, 2018.

Highlights for the first quarter of 2018 included:

  • Record quarterly net income of $53.5 million, or $0.54 per diluted share; represents an increase of 32 percent on a per share basis compared to both the first and fourth quarters of 2017.
  • Completed acquisitions of Central Community Corporation and Ouachita Bancshares Corp. effective January 15, 2018; recorded merger-related expenses of $5.7 million for the first quarter.
  • Earnings benefitted from a positive pre-tax mortgage servicing rights ("MSR") valuation adjustment of $5.5 million.
  • Net operating income – excluding MSR – of $53.6 million, or $0.54 per diluted share.
  • Reported total deposit growth of approximately $240 million, or 8 percent on an annualized basis, excluding balances acquired through mergers during the quarter, while organic loan growth for the quarter totaled approximately $50 million, or 2 percent on an annualized basis.
  • Net interest margin increased to 3.67 percent from 3.58 percent for the fourth quarter of 2017.
  • Repurchased 2,073,986 shares of outstanding common stock at a weighted average price of $32.32.

The Company reported net income of $53.5 million, or $0.54 per diluted share, for the first quarter of 2018 compared with net income of $38.1 million, or $0.41 per diluted share, for the first quarter of 2017 and net income of $37.5 million, or $0.41 per diluted share, for the fourth quarter of 2017.  The Company reported net operating income – excluding MSR – of $53.6 million, or $0.54 per diluted share, for the first quarter of 2018 compared to $36.9 million, or $0.39 per diluted share, for the first quarter of 2017 and $36.8 million, or $0.41 per diluted share, for the fourth 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 realized securities gains and losses, MSR valuation adjustments, restructuring charges, merger-related expenses, industry-related legal settlements, and other one-time charges. 

"Our first quarter results reflect record quarterly earnings for our Company, both in terms of net income and earnings per share," remarked Dan Rollins, BancorpSouth Chairman and Chief Executive Officer.  "Although the completion of the acquisitions of Central Community Corporation and Ouachita Bancshares Corp. highlighted the quarter, we saw continued improvement in many other core areas of our financial performance.  Our net interest margin increased to 3.67 percent for the quarter, primarily as a result of the continued increases in our loan yields as well as the impact of purchase accounting accretion.  Consistent with our historical seasonal first quarter trends, we saw meaningful growth in deposits while organic loan growth was nominal.  Finally, we were opportunistic in our share repurchase program, repurchasing just over two million shares of common stock at a weighted average price of $32.32."

"As we look at other areas of our financial results, the reduction of the statutory federal tax rate enacted by the Tax Cuts and Jobs Act of 2017 had a positive impact on our income tax expense and net income, as expected.  Conversely, the new accounting revenue recognition standards implemented during the first quarter resulted in our insurance commission revenue being an estimated $3.7 million less than it would have been under the previous accounting rules."

Net Interest Revenue

Net interest revenue was $138.1 million for the first quarter of 2018, an increase of 20.5 percent from $114.6 million for the first quarter of 2017 and an increase of 13.8 percent from $121.4 million for the fourth quarter of 2017.  The fully taxable equivalent net interest margin was 3.67 percent for the first quarter of 2018 compared to 3.46 percent for the first quarter of 2017 and 3.58 percent for the fourth quarter of 2017.  Yields on net loans and leases were 4.60 percent for the first quarter of 2018 compared with 4.20 percent for the first quarter of 2017 and 4.36 percent for the fourth quarter of 2017, while yields on total interest earning assets were 4.05 percent for the first quarter of 2018 compared with 3.70 percent for the first quarter of 2017 and 3.90 percent for the fourth quarter of 2017.  The net interest margin, excluding accretable yield, was 3.60 percent for the first quarter of 2018 while yields on net loans and leases, excluding accretable yield, were 4.51 percent.  Purchase accounting accretion did not impact the net interest margin or loan yields for the first and fourth quarters of 2017.  The average cost of deposits was 0.31 percent for the first quarter of 2018 compared to 0.23 percent for the first quarter of 2017 and 0.27 percent for the fourth quarter of 2017.

Asset, Deposit and Loan Activity

Total assets were $17.2 billion at March 31, 2018 compared with $14.9 billion at March 31, 2017.  Loans and leases, net of unearned income, were $12.3 billion at March 31, 2018 compared with $10.8 billion at March 31, 2017.  Total deposits were $13.9 billion at March 31, 2018 compared with $12.0 billion at March 31, 2017.  These balance sheet comparisons include the impact of the acquisitions of Central Community Corporation and Ouachita Bancshares Corp., which closed effective January 15, 2018.  Balance sheet totals for these two banks at the time of closing are disclosed in the "Transactions" section of this news release.

Provision for Credit Losses and Allowance for Credit Losses

Earnings for the first quarter of 2018 reflect a provision for credit losses of $1.0 million, compared to a provision of $1.0 million for the first quarter of 2017 and a provision of $0.5 million for the fourth quarter of 2017.  Net recoveries for the first quarter of 2018 were $0.2 million, compared with net recoveries of $0.5 million for the first quarter of 2017 and net charge-offs of $1.8 million for the fourth quarter of 2017.  The allowance for credit losses was $119.4 million, or 0.97 percent of net loans and leases, at March 31, 2018, compared with $125.2 million, or 1.16 percent of net loans and leases, at March 31, 2017 and $118.2 million, or 1.07 percent of net loans and leases, at December 31, 2017.  The allowance for credit losses coverage metrics were impacted by the acquisitions that closed during the first quarter of 2018.

Total non-performing assets were $90.9 million, or 0.74 percent of net loans and leases, at March 31, 2018 compared with $90.0 million, or 0.83 percent of net loans and leases, at March 31, 2017, and $84.5 million, or 0.76 percent of net loans and leases, at December 31, 2017.  Other real estate owned was $9.4 million at March 31, 2018 compared with $8.5 million at March 31, 2017 and $6.0 million at December 31, 2017.

Noninterest Revenue

Noninterest revenue was $78.9 million for the first quarter of 2018, compared with $70.9 million for the first quarter of 2017 and $63.1 million for the fourth quarter of 2017.  These results included a positive MSR valuation adjustment of $5.5 million for the first quarter of 2018, compared with a positive MSR valuation adjustment of $0.9 million for the first quarter of 2017 and a positive MSR valuation adjustment of $2.4 million for the fourth 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 $7.7 million for the first quarter of 2018, compared with $8.1 million for the first quarter of 2017 and $4.9 million for the fourth quarter of 2017.  Mortgage origination volume for the first quarter of 2018 was $291.9 million, compared with $287.8 million for the first quarter of 2017 and $308.4 million for the fourth quarter of 2017.

Credit and debit card fee revenue was $9.6 million for the first quarter of 2018, compared with $8.9 million for the first quarter of 2017 and $9.5 million for the fourth quarter of 2017.  Deposit service charge revenue was $10.9 million for the first quarter of 2018, compared with $9.7 million for the first quarter of 2017 and $10.3 million for the fourth quarter of 2017.  Wealth management revenue was $5.7 million for the first quarter of 2018, compared with $5.2 million for the first quarter of 2017 and $5.6 million for the fourth quarter of 2017.  Other noninterest revenue was $10.4 million for the first quarter of 2018, compared with $4.1 million for both the first quarter of 2017 and the fourth quarter of 2017.   Other noninterest revenue for the first quarter of 2018 benefitted from a legal settlement totaling $3.0 million.

Insurance commission revenue was $29.1 million for the first quarter of 2018, compared with $32.9 million for the first quarter of 2017 and $25.8 million for the fourth quarter of 2017.  Accounting Standards Updates 2014-09 "Revenue from Contracts with Customers" and 2015-14 "Revenue from Contracts with Customers: Deferral of the Effective Date", which were effective January 1, 2018, impacted the accounting for insurance commission revenue.  Previously, contingent commissions were recognized as revenue in the period of receipt, which is weighted toward the first quarter for the Company.  Under the new accounting guidance, the Company is required to estimate and accrue for contingent commissions throughout the year.  Accordingly, insurance commission revenue for the first quarter was an estimated $3.7 million less than it would have otherwise been under the previous accounting rules.

Noninterest Expense

Noninterest expense for the first quarter of 2018 was $147.7 million, compared with $127.1 million for the first quarter of 2017 and $125.9 million for the fourth quarter of 2017.  Salaries and employee benefits expense was $91.3 million for the first quarter of 2018 compared to $81.4 million for the first quarter of 2017 and $78.1 million for the fourth quarter of 2017.  Occupancy expense was $10.8 million for the first quarter of 2018, compared with $10.3 million for the first quarter of 2017 and $10.1 million for the fourth quarter of 2017.  Other noninterest expense was $39.5 million for the first quarter of 2018, compared to $29.4 million for the first quarter of 2017 and $31.3 million for the fourth quarter of 2017.  Other noninterest expense for the first quarter of 2018 was adversely impacted by a single forgery and theft loss totaling $2.3 million.  Merger expense for the first quarter of 2018 was $5.7 million, compared with no merger expense for the first quarter of 2017 and $0.7 million for the fourth quarter of 2017.

Capital Management

The Company's equity capitalization is comprised entirely of common stock.  The Company's ratio of shareholders' equity to assets was 11.99 percent at March 31, 2018, compared with 11.45 percent at March 31, 2017 and 11.20 percent at December 31, 2017.  The ratio of tangible shareholders' equity to tangible assets was 8.69 percent at March 31, 2018, compared with 9.49 percent at March 31, 2017 and 9.31 percent at December 31, 2017.

During the first quarter of 2018, the Company repurchased 2,073,986 shares of its outstanding common stock at a weighted average price of $32.32 per share pursuant to its share repurchase program which is intended to comply with Rules 10b-18 and 10b5-1 promulgated under the Securities and Exchange Act of 1934, as amended.  During the fourth quarter of 2017, the Company did not repurchase shares of its outstanding common stock.  As of March 31, 2018, the Company had 3,926,014 remaining shares available for repurchase under its current share repurchase authorization, which expires on December 31, 2019.  

Estimated regulatory capital ratios at March 31, 2018 were calculated in accordance with the Basel III capital framework.  The Company is a "well capitalized" bank, as defined by federal regulations, at March 31, 2018, with Tier 1 risk-based capital of 11.30 percent and total risk-based capital of 12.18 percent, compared with required minimum levels of 8 percent and 10 percent, respectively, in order to qualify for "well capitalized" classification. 

TRANSACTIONS

The Reorganization

Effective October 31, 2017, the merger of BancorpSouth, Inc. with and into BancorpSouth Bank was closed, with BancorpSouth Bank continuing as the surviving entity (the "Reorganization").  This transaction resulted in the elimination of the holding company structure.  The Reorganization is expected to improve efficiency through the elimination of redundant corporate infrastructure and duplicative regulatory oversight.  For more information regarding the Reorganization, see our Current Report on Form 8-K that was filed with the Federal Deposit Insurance Corporation (the "FDIC") on November 1, 2017.

Central Community Corporation

Effective January 15, 2018, the Company completed the merger with Central Community Corporation ("CCC"), headquartered in Temple, Texas, pursuant to which CCC merged with and into the Company.  CCC was the parent company of First State Bank Central Texas ("First State Bank"), which was headquartered in Austin, Texas.  First State Bank operated 31 full-service banking offices in central Texas.  As of January 15, 2018, CCC, on a consolidated basis, reported total assets of $1.4 billion, total loans of $712.2 million and total deposits of $1.2 billion.  Under the terms of the definitive merger agreement, the Company issued approximately 7,250,000 shares of the Company's common stock plus $28.5 million in cash for all outstanding shares of CCC's capital stock.  For more information regarding the CCC merger, see our Current Report on Form 8-K that was filed with the FDIC on January 16, 2018.  The purchase accounting is considered provisional as management continues to identify and assess information regarding the nature of the acquired assets and liabilities and reviews the associated valuation assumptions and methodologies.

Ouachita Bancshares Corp.

Effective January 15, 2018, the Company completed the merger with Ouachita Bancshares Corp., parent company of Ouachita Independent Bank (collectively referred to as "OIB"), headquartered in Monroe, Louisiana, pursuant to which OIB was merged with and into the Company.  OIB operated 11 full-service banking offices along the I-20 corridor and had a loan production office in Madison, Mississippi.  As of January 15, 2018, OIB, on a consolidated basis, reported total assets of $707.1 million, total loans of $495.6 million and total deposits of $653.4 million.  Under the terms of the definitive merger agreement, the Company issued 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.  For more information regarding the OIB merger, see our Current Report on Form 8-K that was filed with the FDIC on January 16, 2018.  The purchase accounting is considered provisional as management continues to identify and assess information regarding the nature of the acquired assets and liabilities and reviews the associated valuation assumptions and methodologies.

Summary

Rollins concluded, "Our first quarter results reflect a very strong start to 2018.   I'm excited about the value that the teams acquired in our two transactions add to our franchise.  We completed the operational integration of Ouachita Independent Bank during the first quarter, and we expect to integrate First State Bank Central Texas later in the second quarter.  I expect these teammates to play an integral part in our growth efforts as a Company.  Additionally, we anticipate that we will continue to realize cost savings from these transactions in the months ahead, further improving our financial performance.  We are excited about the ability to execute our strategic plan in an effort to continue to grow our company, deploy capital, and enhance shareholder value." 

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 20 of this news release.

Conference Call and Webcast

The Company will conduct a conference call to discuss its first quarter 2018 financial results on April 19, 2018, 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 Bank

BancorpSouth Bank (NYSE: BXS) is headquartered in Tupelo, Mississippi, with $17.2 billion in assets.  BancorpSouth operates 279 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 benefits, costs, synergies and financial and operational impact of the Reorganization on the Company, the benefits, costs, synergies, and financial and operational impact of the CCC and OIB mergers, the acceptance by customers of OIB and CCC of the Company's products and services after the closing of the mergers, 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"), the impact of the Tax Cuts and Jobs Act of 2017 on the Company and its operations and financial performance, 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, dispositions and other strategic growth opportunities and initiatives 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 to meet expectations regarding the benefits, costs, synergies, and financial and operational impact of the Reorganization and the CCC and OIB mergers, the possibility that any of the anticipated benefits, costs, synergies and financial and operational improvements of the Reorganization and the OIB and CCC mergers will not be realized or will not be realized as expected, the lack of availability of the Bank's filings mandated by the Exchange Act from the SEC's publicly available website after the closing of the Reorganization, 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 Tax Cuts and Jobs Act of 2017 on the Company and its operations and financial performance, 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, dispositions and other strategic growth opportunities and initiatives, 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 FDIC.  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 Bank

Selected Financial Information

(Dollars in thousands, except per share data)

(Unaudited)

           
           
 

Quarter Ended

Quarter Ended

Quarter Ended

Quarter Ended

Quarter Ended

 

3/31/2018

12/31/2017

9/30/2017

6/30/2017

3/31/2017

Earnings Summary:

         

Interest revenue

$                    152,195

$                    132,276

$                    130,934

$                    126,855

$                    122,926

Interest expense

14,117

10,890

10,373

9,377

8,315

Net interest revenue

138,078

121,386

120,561

117,478

114,611

Provision for credit losses

1,000

500

500

1,000

1,000

Net interest revenue, after provision

         

   for credit losses

137,078

120,886

120,061

116,478

113,611

Noninterest revenue

78,934

63,074

65,960

68,130

70,869

Noninterest expense

147,701

125,881

126,903

127,553

127,109

Income before income taxes

68,311

58,079

59,118

57,055

57,371

Income tax expense

14,820

20,556

19,590

19,166

19,278

Net income

$                      53,491

$                      37,523

$                      39,528

$                      37,889

$                      38,093

           

Balance Sheet - Period End Balances

         

Total assets

$               17,185,772

$               15,298,518

$               14,760,394

$               14,843,130

$               14,866,054

Total earning assets

15,593,366

14,081,818

13,606,145

13,674,436

13,757,920

Total securities

3,027,194

2,835,367

2,359,967

2,421,295

2,540,887

Loans and leases, net of unearned income

12,296,849

11,056,434

11,055,509

11,018,540

10,801,694

Allowance for credit losses

119,434

118,200

119,496

121,561

125,196

Net book value of acquired loans (included in loans and leases above)

1,077,581

-

-

-

-

Remaining loan mark on acquired loans

19,330

-

-

-

-

Total deposits

13,894,301

11,915,596

11,775,988

11,938,296

12,042,845

Long-term debt

32,963

30,000

30,000

230,000

530,000

Total shareholders' equity

2,060,487

1,713,485

1,700,502

1,691,832

1,702,389

           

Balance Sheet - Average Balances

         

Total assets

$               16,918,568

$               14,809,497

$               14,710,245

$               14,741,811

$               14,832,260

Total earning assets

15,374,336

13,678,542

13,591,124

13,636,415

13,715,612

Total securities

3,009,166

2,447,357

2,367,633

2,497,108

2,507,701

Loans and leases, net of unearned income

12,084,020

11,010,187

11,013,270

10,883,102

10,820,486

Total deposits

13,563,510

11,840,049

11,802,682

11,902,415

11,941,851

Long-term debt

34,433

30,000

162,609

398,132

530,000

Total shareholders' equity

2,012,639

1,701,228

1,695,899

1,680,053

1,731,931

           

Nonperforming Assets:

         

Non-accrual loans and leases

$                      65,303

$                      61,891

$                      55,796

$                      63,585

$                      74,439

Loans and leases 90+ days past due, still accruing

6,519

8,503

1,855

1,793

3,063

Restructured loans and leases, still accruing

9,681

8,060

7,366

6,303

4,060

Non-performing loans (NPLs)

81,503

78,454

65,017

71,681

81,562

Other real estate owned

9,362

6,038

5,956

7,704

8,458

Non-performing assets (NPAs)

$                      90,865

$                      84,492

$                      70,973

$                      79,385

$                      90,020

           

Financial Ratios and Other Data:

         

Return on average assets

1.28%

1.01%

1.07%

1.03%

1.04%

Operating return on average assets-excluding MSR*

1.29%

0.99%

1.07%

1.06%

1.01%

Return on average shareholders' equity

10.78%

8.75%

9.25%

9.05%

8.92%

Operating return on average shareholders' equity-excluding MSR*

10.80%

8.58%

9.25%

9.27%

8.63%

Return on tangible equity*

15.08%

10.67%

11.36%

11.08%

11.19%

Operating return on tangible equity-excluding MSR*

15.11%

10.46%

11.36%

11.35%

10.82%

Noninterest income to average assets

1.89%

1.69%

1.78%

1.85%

1.94%

Noninterest expense to average assets

3.54%

3.37%

3.42%

3.47%

3.48%

Net interest margin-fully taxable equivalent

3.67%

3.58%

3.58%

3.52%

3.46%

Net interest margin-fully taxable equivalent, excluding net accretion

         

  on acquired loans and leases

3.60%

N/A

N/A

N/A

N/A

Net interest rate spread

3.52%

3.44%

3.45%

3.40%

3.35%

Efficiency ratio (tax equivalent)*

67.66%

67.45%

67.23%

67.90%

67.71%

Operating efficiency ratio-excluding MSR (tax equivalent)*

66.79%

68.16%

67.24%

67.33%

68.43%

Loan/deposit ratio

88.50%

92.79%

93.88%

92.30%

89.69%

Price to earnings multiple (avg)

17.77%

18.95%

19.42%

18.83%

19.15%

Market value to book value

153.77%

165.76%

170.25%

164.07%

164.09%

Market value to book value (avg)

159.14%

169.35%

158.92%

161.24%

166.39%

Market value to tangible book value

220.18%

203.64%

209.66%

202.52%

202.32%

Market value to tangible book value (avg)

227.87%

208.04%

195.70%

199.07%

205.16%

Employee FTE

4,305

3,947

3,950

3,989

3,973

           

*Denotes non-GAAP financial measure.  Refer to related disclosure and reconciliation on pages 20 and 21.

     
           
           

Credit Quality Ratios:

         

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

(0.01%)

0.06%

0.09%

0.17%

(0.02%)

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

0.03%

0.02%

0.02%

0.04%

0.04%

Allowance for credit losses to net loans and leases

0.97%

1.07%

1.08%

1.10%

1.16%

Allowance for credit losses to net loans and leases, excluding acquired loans and leases

1.07%

N/A

N/A

N/A

N/A

Allowance for credit losses to non-performing loans and leases

146.54%

150.66%

183.79%

169.59%

153.50%

Allowance for credit losses to non-performing assets

131.44%

139.89%

168.37%

153.13%

139.08%

Non-performing loans and leases to net loans and leases

0.66%

0.71%

0.59%

0.65%

0.76%

Non-performing assets to net loans and leases

0.74%

0.76%

0.64%

0.72%

0.83%

           

Equity Ratios:

         

Total shareholders' equity to total assets

11.99%

11.20%

11.52%

11.40%

11.45%

Tangible shareholders' equity to tangible assets*

8.69%

9.31%

9.56%

9.44%

9.49%

           
           

Capital Adequacy:

         

Common  Equity Tier 1 capital

11.30%

12.15%

12.04%

11.90%

12.16%

Tier 1 capital

11.30%

12.15%

12.04%

11.90%

12.16%

Total capital

12.18%

13.13%

13.03%

12.91%

13.21%

Tier 1 leverage capital

9.39%

10.12%

10.02%

9.93%

9.95%

   Estimated for current quarter

         
           

Common Share Data:

         

Basic earnings per share

$                          0.54

$                          0.42

$                          0.43

$                          0.41

$                          0.41

Diluted earnings per share

0.54

0.41

0.43

0.41

0.41

Operating earnings per share*

0.58

0.42

0.43

0.41

0.40

Operating earnings per share- excluding MSR*

0.54

0.41

0.43

0.42

0.39

Cash dividends per share

0.14

0.14

0.14

0.13

0.13

Book value per share

20.68

18.97

18.83

18.59

18.44

Tangible book value per share*

14.44

15.44

15.29

15.06

14.95

Market value per share (last)

31.80

31.45

32.05

30.50

30.25

Market value per share (high)

35.55

34.45

32.70

31.85

32.40

Market value per share (low)

30.90

30.25

27.20

28.20

28.10

Market value per share (avg)

32.91

32.13

29.92

29.98

30.68

Dividend payout ratio

25.85%

33.70%

32.20%

30.48%

30.73%

Total shares outstanding

99,636,779

90,312,378

90,329,896

91,022,729

92,344,409

Average shares outstanding - basic

98,765,789

90,321,137

90,911,702

91,366,309

93,642,848

Average shares outstanding - diluted

98,942,268

90,546,824

91,099,770

91,530,552

93,829,400

           
           

Yield/Rate:

         

(Taxable equivalent basis)

         

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

4.60%

4.36%

4.33%

4.27%

4.20%

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

         

  net accretion on acquired loans and leases

4.51%

N/A

N/A

N/A

N/A

Available-for-sale securities:

         

  Taxable

1.72%

1.48%

1.41%

1.37%

1.35%

  Tax-exempt

4.30%

5.29%

5.25%

5.26%

5.29%

Short-term investments

1.52%

1.09%

1.02%

0.88%

0.76%

  Total interest earning assets and revenue

4.05%

3.90%

3.89%

3.80%

3.70%

Deposits

0.31%

0.27%

0.26%

0.25%

0.23%

  Demand - interest bearing

0.36%

0.29%

0.28%

0.25%

0.22%

  Savings

0.13%

0.13%

0.12%

0.12%

0.12%

  Other time

0.89%

0.86%

0.84%

0.81%

0.79%

Short-term borrowings

1.25%

0.96%

0.85%

0.69%

0.31%

Total interest bearing deposits & short-term borrowings

0.51%

0.45%

0.41%

0.37%

0.32%

Junior subordinated debt

0.00%

N/A

N/A

N/A

3.29%

Long-term debt

4.17%

4.05%

1.79%

1.01%

0.87%

  Total interest bearing liabilities and expense

0.53%

0.46%

0.44%

0.40%

0.35%

Interest bearing liabilities to interest earning assets

70.91%

69.09%

69.55%

69.68%

70.24%

Net interest tax equivalent adjustment

$                        1,205

$                        2,155

$                        2,237

$                        2,248

$                        2,261

           

*Denotes non-GAAP financial measure.  Refer to related disclosure and reconciliation on pages 20 and 21.

   

 

 

BancorpSouth Bank

Consolidated Balance Sheets

(Unaudited)

           
 

Mar-18

Dec-17

Sep-17

Jun-17

Mar-17

 

(Dollars in thousands)

Assets

         

Cash and due from banks

$                180,104

$                167,283

$                167,871

$                178,376

$                147,684

Interest bearing deposits with other banks

         

and Federal funds sold

127,345

53,440

52,316

49,680

253,738

Available-for-sale securities, at fair value

3,027,194

2,835,367

2,359,967

2,421,295

2,540,887

Loans and leases

12,312,346

11,072,062

11,073,306

11,037,808

10,822,568

  Less:  Unearned income

15,497

15,628

17,797

19,268

20,874

             Allowance for credit losses

119,434

118,200

119,496

121,561

125,196

Net loans and leases

12,177,415

10,938,234

10,936,013

10,896,979

10,676,498

Loans held for sale

141,979

136,577

138,353

184,921

161,600

Premises and equipment, net

342,353

314,362

311,530

306,863

305,250

Accrued interest receivable

52,856

45,671

44,454

40,716

42,329

Goodwill

580,900

300,798

300,798

300,798

300,798

Other identifiable intangibles

40,590

17,882

18,860

19,854

20,865

Bank owned life insurance

304,850

292,069

259,361

260,228

258,518

Other real estate owned

9,362

6,038

5,956

7,704

8,458

Other assets

200,824

190,797

164,915

175,716

149,429

Total Assets

$           17,185,772

$           15,298,518

$           14,760,394

$           14,843,130

$           14,866,054

Liabilities

         

Deposits:

         

  Demand:  Noninterest bearing

$             4,035,830

$             3,453,000

$             3,414,397

$             3,390,428

$             3,401,348

                   Interest bearing

5,945,359

5,066,614

4,925,127

5,095,570

5,182,011

  Savings

1,843,264

1,638,799

1,638,033

1,630,123

1,627,621

  Other time

2,069,848

1,757,183

1,798,431

1,822,175

1,831,865

Total deposits

13,894,301

11,915,596

11,775,988

11,938,296

12,042,845

Securities sold under agreement to repurchase

469,114

417,867

421,044

399,815

375,832

Federal funds purchased

         

   and other short-term borrowing

500,000

1,025,000

625,000

365,000

-

Accrued interest payable

5,525

4,882

4,826

4,259

4,109

Long-term debt

32,963

30,000

30,000

230,000

530,000

Other liabilities

223,382

191,688

203,034

213,928

210,879

Total Liabilities

15,125,285

13,585,033

13,059,892

13,151,298

13,163,665

Shareholders' Equity

         

Common stock

249,092

225,781

225,825

227,557

230,861

Capital surplus

465,699

177,624

175,837

191,940

226,204

Accumulated other comprehensive loss

(85,994)

(63,843)

(50,203)

(49,861)

(50,360)

Retained earnings

1,431,690

1,373,923

1,349,043

1,322,196

1,295,684

Total Shareholders' Equity

2,060,487

1,713,485

1,700,502

1,691,832

1,702,389

Total Liabilities & Shareholders' Equity

$           17,185,772

$           15,298,518

$           14,760,394

$           14,843,130

$           14,866,054

           

 

 

BancorpSouth Bank

Consolidated Average Balance Sheets

(Unaudited)

           
 

Mar-18

Dec-17

Sep-17

Jun-17

Mar-17

 

(Dollars in thousands)

Assets

         

Cash and due from banks

$                202,141

$                154,843

$                153,797

$                156,387

$                162,696

Interest bearing deposits with other banks

         

and Federal funds sold

182,488

108,880

83,109

117,414

258,502

Available-for-sale securities, at fair value

3,009,166

2,447,357

2,367,633

2,497,108

2,507,701

Loans and leases

12,099,694

11,026,437

11,032,159

10,903,524

10,843,069

  Less:  Unearned income

15,674

16,250

18,889

20,422

22,583

             Allowance for credit losses

118,840

119,124

121,501

125,578

124,662

Net loans and leases

11,965,180

10,891,063

10,891,769

10,757,524

10,695,824

Loans held for sale

98,662

112,118

127,112

138,792

128,923

Premises and equipment, net

343,098

313,874

309,592

306,483

305,637

Accrued interest receivable

47,770

40,228

40,100

38,702

38,774

Goodwill

544,840

300,798

300,798

300,798

300,798

Other identifiable intangibles

17,811

18,231

19,222

20,218

21,236

Bank owned life insurance

301,982

265,761

261,100

259,182

257,669

Other real estate owned

9,300

5,777

6,985

7,860

8,154

Other assets

196,130

150,567

149,028

141,343

146,346

Total Assets

$           16,918,568

$           14,809,497

$           14,710,245

$           14,741,811

$           14,832,260

Liabilities

         

Deposits:

         

  Demand:  Noninterest bearing

$             3,822,216

$             3,479,771

$             3,369,468

$             3,362,801

$             3,272,876

                   Interest bearing

5,898,269

4,949,183

4,985,113

5,079,388

5,244,069

  Savings

1,801,128

1,631,617

1,634,577

1,626,996

1,587,725

  Other time

2,041,897

1,779,478

1,813,524

1,833,230

1,837,181

Total deposits

13,563,510

11,840,049

11,802,682

11,902,415

11,941,851

Securities sold under agreement to repurchase

445,840

471,581

444,999

412,825

414,272

Federal funds purchased

         

   and other short-term borrowing

667,546

589,261

411,815

151,352

19,545

Accrued interest payable

5,177

4,718

4,507

4,028

3,867

Long-term debt

34,433

30,000

162,609

398,132

530,000

Other liabilities

189,423

172,660

187,734

193,006

189,648

Total Liabilities

14,905,929

13,108,269

13,014,346

13,061,758

13,100,329

Shareholders' Equity

         

Common stock

247,189

225,808

227,247

228,322

234,285

Capital surplus

447,576

176,613

189,545

199,115

265,685

Accumulated other comprehensive loss

(71,205)

(55,181)

(48,591)

(49,185)

(50,616)

Retained earnings

1,389,079

1,353,988

1,327,698

1,301,801

1,282,577

Total Shareholders' Equity

2,012,639

1,701,228

1,695,899

1,680,053

1,731,931

Total Liabilities & Shareholders' Equity

$           16,918,568

$           14,809,497

$           14,710,245

$           14,741,811

$           14,832,260

           

 

 

BancorpSouth Bank

Consolidated Condensed Statements of Income

(Dollars in thousands, except per share data)

(Unaudited)

                   
 

Quarter Ended

 

Mar-18

 

Dec-17

 

Sep-17

 

Jun-17

 

Mar-17

INTEREST REVENUE:

                 

Loans and leases

$  136,568

 

$  120,381

 

$   119,599

 

$  115,286

 

$  111,498

Deposits with other banks

664

 

300

 

214

 

256

 

485

Federal funds sold and securities purchased

                 

   under agreement to resell

21

 

-

 

-

 

-

 

-

Available-for-sale securities:

                 

    Taxable

11,483

 

8,114

 

7,378

 

7,509

 

7,350

    Tax-exempt

2,504

 

2,417

 

2,514

 

2,562

 

2,581

Loans held for sale

955

 

1,064

 

1,229

 

1,242

 

1,012

        Total interest revenue

152,195

 

132,276

 

130,934

 

126,855

 

122,926

                   

INTEREST EXPENSE:

                 

Interest bearing demand

5,278

 

3,645

 

3,482

 

3,204

 

2,786

Savings

584

 

517

 

494

 

483

 

472

Other time

4,457

 

3,853

 

3,819

 

3,725

 

3,582

Federal funds purchased and securities sold

                 

   under agreement to repurchase

1,341

 

930

 

754

 

509

 

322

Short-term and long-term debt

2,455

 

1,943

 

1,824

 

1,456

 

1,142

Junior subordinated debt

-

 

-

 

-

 

-

 

9

Other

2

 

2

 

-

 

-

 

2

        Total interest expense

14,117

 

10,890

 

10,373

 

9,377

 

8,315

                   

        Net interest revenue

138,078

 

121,386

 

120,561

 

117,478

 

114,611

  Provision for credit losses

1,000

 

500

 

500

 

1,000

 

1,000

        Net interest revenue, after provision for

                 

          credit losses

137,078

 

120,886

 

120,061

 

116,478

 

113,611

                   

NONINTEREST REVENUE:

                 

Mortgage banking

13,265

 

7,246

 

6,909

 

6,134

 

8,990

Credit card, debit card and merchant fees

9,564

 

9,530

 

9,346

 

9,565

 

8,903

Deposit service charges

10,901

 

10,257

 

10,388

 

9,706

 

9,689

Security gains, net

27

 

523

 

5

 

23

 

1,071

Insurance commissions

29,130

 

25,758

 

28,616

 

31,126

 

32,940

Wealth management

5,697

 

5,619

 

5,386

 

5,275

 

5,174

Other

10,350

 

4,141

 

5,310

 

6,301

 

4,102

        Total noninterest revenue

78,934

 

63,074

 

65,960

 

68,130

 

70,869

                   

NONINTEREST EXPENSE:

                 

Salaries and employee benefits

91,333

 

78,142

 

81,415

 

81,597

 

81,386

Occupancy, net of rental income

10,804

 

10,064

 

10,343

 

10,455

 

10,302

Equipment

3,754

 

3,710

 

3,352

 

3,438

 

3,568

Deposit insurance assessments

2,360

 

2,659

 

2,499

 

2,261

 

2,484

Other

39,450

 

31,306

 

29,294

 

29,802

 

29,369

        Total noninterest expense

147,701

 

125,881

 

126,903

 

127,553

 

127,109

        Income before income taxes

68,311

 

58,079

 

59,118

 

57,055

 

57,371

Income tax expense

14,820

 

20,556

 

19,590

 

19,166

 

19,278

        Net income

$    53,491

 

$   37,523

 

$     39,528

 

$    37,889

 

$   38,093

                   

Net income per share: Basic

$       0.54

 

$       0.42

 

$        0.43

 

$       0.41

 

$       0.41

                                  Diluted

$       0.54

 

$       0.41

 

$        0.43

 

$       0.41

 

$       0.41

                   

 

 

BancorpSouth Bank

Selected Loan Data

(Dollars in thousands)

(Unaudited)

                   
 

Quarter Ended

 

Mar-18

 

Dec-17

 

Sep-17

 

Jun-17

 

Mar-17

LOAN AND LEASE PORTFOLIO:

                 

Commercial and industrial

$  1,695,718

 

$   1,480,279

 

$   1,506,352

 

$    1,566,459

 

$  1,536,527

Real estate

                 

   Consumer mortgages

3,000,479

 

2,864,623

 

2,826,333

 

2,776,213

 

2,675,672

   Home equity

655,634

 

638,394

 

626,961

 

624,868

 

626,488

   Agricultural

313,470

 

243,449

 

247,211

 

245,646

 

240,534

   Commercial and industrial-owner occupied

2,102,493

 

1,846,085

 

1,835,430

 

1,795,321

 

1,801,613

   Construction, acquisition and development

1,377,153

 

1,153,187

 

1,175,979

 

1,156,901

 

1,136,827

   Commercial real estate

2,640,503

 

2,345,231

 

2,336,219

 

2,341,633

 

2,271,542

Credit cards

102,114

 

107,848

 

104,613

 

104,169

 

103,813

All other

409,285

 

377,338

 

396,411

 

407,330

 

408,678

     Total loans

$ 12,296,849

 

$ 11,056,434

 

$ 11,055,509

 

$  11,018,540

 

$ 10,801,694

                   

ALLOWANCE FOR CREDIT LOSSES:

                 

Balance, beginning of period

$     118,200

 

$      119,496

 

$     121,561

 

$       125,196

 

$     123,736

                   

Loans and leases charged-off:

                 

Commercial and industrial

(484)

 

(1,234)

 

(1,963)

 

(3,773)

 

(384)

Real estate

                 

   Consumer mortgages

(134)

 

(773)

 

(1,193)

 

(522)

 

(596)

   Home equity

(143)

 

(95)

 

(439)

 

(125)

 

(459)

   Agricultural

(12)

 

(5)

 

(54)

 

(6)

 

(44)

   Commercial and industrial-owner occupied

(41)

 

(720)

 

(20)

 

(1,460)

 

(404)

   Construction, acquisition and development

(163)

 

(206)

 

(29)

 

(54)

 

(30)

   Commercial real estate

(35)

 

(159)

 

(49)

 

(1)

 

(19)

Credit cards

(794)

 

(849)

 

(745)

 

(781)

 

(838)

All other

(725)

 

(627)

 

(711)

 

(591)

 

(559)

     Total loans charged-off

(2,531)

 

(4,668)

 

(5,203)

 

(7,313)

 

(3,333)

                   

Recoveries:

                 

Commercial and industrial

372

 

599

 

481

 

1,034

 

490

Real estate

                 

   Consumer mortgages

95

 

755

 

642

 

339

 

625

   Home equity

333

 

69

 

378

 

110

 

356

   Agricultural

79

 

7

 

77

 

34

 

41

   Commercial and industrial-owner occupied

80

 

391

 

285

 

481

 

193

   Construction, acquisition and development

1,262

 

483

 

260

 

208

 

1,324

   Commercial real estate

53

 

98

 

151

 

75

 

69

Credit cards

220

 

218

 

177

 

205

 

249

All other

271

 

252

 

187

 

192

 

446

     Total recoveries

2,765

 

2,872

 

2,638

 

2,678

 

3,793

                   

Net recoveries (charge-offs)

234

 

(1,796)

 

(2,565)

 

(4,635)

 

460

                   

Provision charged to operating expense

1,000

 

500

 

500

 

1,000

 

1,000

Balance, end of period

$     119,434

 

$      118,200

 

$     119,496

 

$       121,561

 

$     125,196

                   

Average loans for period

$ 12,084,020

 

$ 11,010,187

 

$ 11,013,270

 

$ 10,883,102

 

$ 10,820,486

                   

Ratio:

                 

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

(0.01%)

 

0.06%

 

0.09%

 

0.17%

 

(0.02%)

                   

 

 

BancorpSouth Bank

Selected Loan Data

(Dollars in thousands)

(Unaudited)

                   
 

Quarter Ended

 

Mar-18

 

Dec-17

 

Sep-17

 

Jun-17

 

Mar-17

NON-PERFORMING ASSETS

                 

NON-PERFORMING LOANS AND LEASES:

                 

  Nonaccrual Loans and Leases

                 

    Commercial and industrial

11,122

 

$       10,178

 

$         8,776

 

$      9,988

 

$       13,959

    Real estate

                 

       Consumer mortgages

26,832

 

22,988

 

23,635

 

24,690

 

21,543

       Home equity

2,587

 

2,956

 

2,555

 

3,183

 

3,157

       Agricultural

6,225

 

6,160

 

5,919

 

6,172

 

5,180

       Commercial and industrial-owner occupied

12,210

 

12,585

 

7,558

 

10,215

 

15,135

       Construction, acquisition and development

2,223

 

2,197

 

1,771

 

2,223

 

1,466

       Commercial real estate

3,597

 

4,318

 

4,645

 

6,418

 

13,638

    Credit cards

136

 

74

 

126

 

122

 

87

    All other

371

 

435

 

811

 

574

 

274

         Total nonaccrual loans and leases

$    65,303

 

$       61,891

 

$       55,796

 

$    63,585

 

$       74,439

                   

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

6,519

 

8,503

 

1,855

 

1,793

 

3,063

  Restructured Loans and Leases, Still Accruing

9,681

 

8,060

 

7,366

 

6,303

 

4,060

     Total non-performing loans and leases

81,503

 

78,454

 

65,017

 

71,681

 

81,562

                   

OTHER REAL ESTATE OWNED:

9,362

 

6,038

 

5,956

 

7,704

 

8,458

                   

Total Non-performing Assets

$    90,865

 

$       84,492

 

$       70,973

 

$    79,385

 

$       90,020

                   

Additions to Nonaccrual Loans and Leases During the Quarter

$    16,641

 

$       20,799

 

$       16,975

 

$    17,020

 

$       23,348

                   

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

                 

    Commercial and industrial

5,020

 

$         1,990

 

$         3,791

 

$      3,304

 

$         4,083

    Real estate

                 

       Consumer mortgages

17,076

 

15,080

 

18,603

 

12,395

 

10,149

       Home equity

1,768

 

1,858

 

2,042

 

2,590

 

1,720

       Agricultural

295

 

191

 

476

 

197

 

364

       Commercial and industrial-owner occupied

4,356

 

1,655

 

4,453

 

2,228

 

1,949

       Construction, acquisition and development

2,215

 

1,386

 

4,464

 

2,639

 

3,306

       Commercial real estate

679

 

1,200

 

1,206

 

1,183

 

2,631

    Credit cards

705

 

851

 

720

 

705

 

800

    All other

733

 

951

 

699

 

1,203

 

776

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

$    32,847

 

$       25,162

 

$       36,454

 

$    26,444

 

$       25,778

                   

Credit Quality Ratios:

                 

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

0.03%

 

0.02%

 

0.02%

 

0.04%

 

0.04%

Allowance for credit losses to net loans and leases

0.97%

 

1.07%

 

1.08%

 

1.10%

 

1.16%

Allowance for credit losses to non-performing loans and leases

146.54%

 

150.66%

 

183.79%

 

169.59%

 

153.50%

Allowance for credit losses to non-performing assets

131.44%

 

139.89%

 

168.37%

 

153.13%

 

139.08%

Non-performing loans and leases to net loans and leases

0.66%

 

0.71%

 

0.59%

 

0.65%

 

0.76%

Non-performing assets to net loans and leases

0.74%

 

0.76%

 

0.64%

 

0.72%

 

0.83%

                   

 

 

BancorpSouth Bank

       

Selected Loan Data

       

(Dollars in thousands)

       

(Unaudited)

       
                   
 

March 31, 2018

   

Special

       

Purchased

   
 

Pass

Mention

Substandard

Doubtful

Loss

Impaired

Credit Impaired

 

Total

LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE:

                 

Commercial and industrial

$   1,646,715

$                -

$       41,194

$        599

$                -

$    6,549

$            661

 

$   1,695,718

Real estate

                 

   Consumer mortgages

2,934,287

-

61,049

181

-

4,962

-

 

3,000,479

   Home equity

647,562

-

7,791

-

-

281

-

 

655,634

   Agricultural

296,260

-

9,557

-

-

4,744

2,909

 

313,470

   Commercial and industrial-owner occupied

2,025,321

-

67,204

-

-

8,150

1,818

 

2,102,493

   Construction, acquisition and development

1,360,548

-

16,087

-

-

518

-

 

1,377,153

   Commercial real estate

2,598,283

1,207

39,395

-

-

1,618

-

 

2,640,503

Credit cards

102,114

-

-

-

-

-

-

 

102,114

All other

399,205

-

10,080

-

-

-

-

 

409,285

     Total loans

$ 12,010,295

$         1,207

$      252,357

$        780

$                -

$  26,822

$          5,388

 

$ 12,296,849

                   
                   
 

December 31, 2017

   

Special

       

Purchased

   
 

Pass

Mention

Substandard

Doubtful

Loss

Impaired

Credit Impaired

 

Total

LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE:

                 

Commercial and industrial

$   1,434,663

$                -

$       38,210

$        501

$                -

$    6,905

$                -

 

$   1,480,279

Real estate

                 

   Consumer mortgages

2,802,397

-

60,606

203

-

1,417

-

 

2,864,623

   Home equity

629,010

-

8,683

-

-

701

-

 

638,394

   Agricultural

228,618

-

9,622

-

-

5,209

-

 

243,449

   Commercial and industrial-owner occupied

1,775,772

-

61,435

-

269

8,609

-

 

1,846,085

   Construction, acquisition and development

1,134,637

3,718

14,208

-

-

624

-

 

1,153,187

   Commercial real estate

2,303,569

1,220

38,096

-

-

2,346

-

 

2,345,231

Credit cards

107,848

-

-

-

-

-

-

 

107,848

All other

362,599

-

14,739

-

-

-

-

 

377,338

     Total loans

$ 10,779,113

$         4,938

$      245,599

$        704

$            269

$  25,811

$                -

 

$ 11,056,434

                   

 

 

BancorpSouth Bank

Geographical Information

(Dollars in thousands)

(Unaudited)

                   
 

March 31, 2018

 

Alabama

               
 

and Florida

               
 

Panhandle

Arkansas

Louisiana

Mississippi

Missouri

Tennessee

Texas

Other

Total

LOAN AND LEASE PORTFOLIO:

                 

Commercial and industrial

$    119,559

$    159,073

$    283,451

$   577,247

$      77,666

$    102,485

$    341,373

$      34,864

$   1,695,718

Real estate

                 

   Consumer mortgages

397,947

329,498

307,632

876,305

97,147

320,343

616,902

54,705

3,000,479

   Home equity

101,236

45,694

91,108

233,141

20,409

141,278

21,207

1,561

655,634

   Agricultural

6,685

84,540

42,428

65,282

6,179

11,850

96,506

-

313,470

   Commercial and industrial-owner occupied

212,385

200,095

327,376

719,353

47,000

149,383

446,901

-

2,102,493

   Construction, acquisition and development

103,428

91,081

104,721

341,720

19,133

177,205

539,865

-

1,377,153

   Commercial real estate

311,251

341,138

378,650

550,357

213,036

207,513

638,558

-

2,640,503

Credit cards

-

-

-

-

-

-

-

102,114

102,114

All other

48,861

40,069

29,469

190,451

2,957

21,325

69,827

6,326

409,285

     Total loans

$ 1,301,352

$ 1,291,188

$ 1,564,835

$ 3,553,856

$    483,527

$ 1,131,382

$ 2,771,139

$    199,570

$ 12,296,849

                   

NON-PERFORMING LOANS AND LEASES:

                 

Commercial and industrial

$          117

$          868

1048

$       3,577

$       3,989

$          359

$       1,973

$          746

$       12,677

Real estate

                 

   Consumer mortgages

2,764

5,245

4978

10,927

96

2,349

5,807

490

32,656

   Home equity

409

318

1109

543

148

49

53

2

2,631

   Agricultural

50

719

211

4,898

-

-

364

-

6,242

   Commercial and industrial-owner occupied

46

1,723

764

4,356

3,987

1,091

3,216

-

15,183

   Construction, acquisition and development

40

907

838

168

-

-

622

-

2,575

   Commercial real estate

761

774

851

5,118

-

-

-

-

7,504

Credit cards

-

-

-

-

-

-

-

1,240

1,240

All other

11

-

7

454

-

319

4

-

795

     Total loans

$       4,198

$      10,554

$       9,806

$     30,041

$       8,220

$       4,167

$      12,039

$       2,478

$       81,503

                   

NON-PERFORMING LOANS AND LEASES

                 

   AS A PERCENTAGE OF OUTSTANDING:

                 

Commercial and industrial

0.10%

0.55%

0.37%

0.62%

5.14%

0.35%

0.58%

2.14%

0.75%

Real estate

                 

   Consumer mortgages

0.69%

1.59%

1.62%

1.25%

0.10%

0.73%

0.94%

0.90%

1.09%

   Home equity

0.40%

0.70%

1.22%

0.23%

0.73%

0.03%

0.25%

0.13%

0.40%

   Agricultural

0.75%

0.85%

0.50%

7.50%

0.00%

0.00%

0.38%

N/A

1.99%

   Commercial and industrial-owner occupied

0.02%

0.86%

0.23%

0.61%

8.48%

0.73%

0.72%

N/A

0.72%

   Construction, acquisition and development

0.04%

1.00%

0.80%

0.05%

0.00%

0.00%

0.12%

N/A

0.19%

   Commercial real estate

0.24%

0.23%

0.22%

0.93%

0.00%

0.00%

0.00%

N/A

0.28%

Credit cards

N/A

N/A

N/A

N/A

N/A

N/A

N/A

1.21%

1.21%

All other

0.02%

0.00%

0.02%

0.24%

0.00%

1.50%

0.01%

0.00%

0.19%

     Total loans

0.32%

0.82%

0.63%

0.85%

1.70%

0.37%

0.43%

1.24%

0.66%

                   

 

 

BancorpSouth Bank

Acquired Loan Information

(Dollars in thousands)

(Unaudited)

       
 

Quarter Ended March 31, 2018

       
 

Acquired Loans
Accounted for Under
ASC 310-20

Acquired Loans
Accounted for
Under ASC 310-30

Total Acquired
Loans

       

Net book value of acquired loans at beginning of period

$                        -

$                       -

$                   -

Fair value of loans acquired during the period

1,180,749

6,706

1,187,455

Reductions in acquired loans

(108,556)

(1,318)

(109,874)

Net book value of acquired loans at end of period

$         1,072,193

$               5,388

$     1,077,581

       
       

Loan mark on acquired loans at beginning of period

$                        -

$                       -

$                   -

Loan mark recorded on loans acquired during the period*

(15,621)

(6,359)

(21,980)

Change in nonaccretable difference (for ASC 310-30 loans only)

 N/A

-

-

Net accretion recognized on acquired loans

2,522

128

2,650

Remaining loan mark on acquired loans

$             (13,099)

$              (6,231)

$        (19,330)

       
       
 

Quarter Ended

   
 

3/31/2018

   

Loan yield, as reported

4.60%

   
       

Loan yield, excluding net accretion on acquired loans

4.51%

   
       

Net interest margin, as reported

3.67%

   
       

Net interest margin, excluding net accretion on acquired loans

3.60%

   
       

* The loan mark shown above for loans accounted for under ASC 310-30 included approximately $1.0 million in accretable

yield and $5.3 million in nonaccretable difference at the time of acquisition.

   
       

 

 

BancorpSouth Bank

Noninterest Revenue and Expense

(Dollars in thousands)

(Unaudited)

                   
 

Quarter Ended

 

Mar-18

 

Dec-17

 

Sep-17

 

Jun-17

 

Mar-17

NONINTEREST REVENUE:

                 

Mortgage banking excl. MSR and MSR Hedge market value adj

$      7,732

 

$         4,868

 

$         6,955

 

$      7,643

 

$         8,056

MSR and MSR Hedge market value adjustment

5,533

 

2,378

 

(46)

 

(1,509)

 

934

Credit card, debit card and merchant fees

9,564

 

9,530

 

9,346

 

9,565

 

8,903

Deposit service charges

10,901

 

10,257

 

10,388

 

9,706

 

9,689

Securities gains, net

27

 

523

 

5

 

23

 

1,071

Insurance commissions

29,130

 

25,758

 

28,616

 

31,126

 

32,940

Trust income

3,848

 

3,985

 

3,803

 

3,679

 

3,561

Annuity fees

297

 

216

 

246

 

264

 

349

Brokerage commissions and fees

1,552

 

1,418

 

1,337

 

1,332

 

1,264

Bank-owned life insurance

1,947

 

1,732

 

2,700

 

1,710

 

1,669

Other miscellaneous income

8,403

 

2,409

 

2,610

 

4,591

 

2,433

     Total noninterest revenue

$    78,934

 

$       63,074

 

$       65,960

 

$    68,130

 

$       70,869

                   

NONINTEREST EXPENSE:

                 

Salaries and employee benefits

$    91,333

 

$       78,142

 

$       81,415

 

$    81,597

 

$       81,386

Occupancy, net of rental income

10,804

 

10,064

 

10,343

 

10,455

 

10,302

Equipment

3,754

 

3,710

 

3,352

 

3,438

 

3,568

Deposit insurance assessments

2,360

 

2,659

 

2,499

 

2,261

 

2,484

Advertising

855

 

1,671

 

1,185

 

1,037

 

663

Foreclosed property expense

366

 

1,035

 

447

 

960

 

1,050

Telecommunications

1,217

 

1,219

 

1,192

 

1,233

 

1,147

Public relations

794

 

705

 

675

 

654

 

720

Data processing

7,360

 

6,855

 

6,942

 

7,230

 

6,623

Computer software

3,336

 

3,172

 

3,074

 

2,913

 

2,981

Amortization of intangibles

1,602

 

979

 

994

 

1,010

 

1,030

Legal

691

 

1,326

 

1,016

 

1,330

 

1,229

Merger expense

5,727

 

688

 

-

 

-

 

-

Postage and shipping

1,237

 

1,092

 

1,050

 

1,080

 

1,175

Other miscellaneous expense

16,265

 

12,564

 

12,719

 

12,355

 

12,751

     Total noninterest expense

$  147,701

 

$      125,881

 

$      126,903

 

$  127,553

 

$      127,109

                   

INSURANCE COMMISSIONS:

                 

Property and casualty commissions

$    20,100

 

$       18,667

 

$       21,086

 

$    22,363

 

$       19,755

Life and health commissions

5,943

 

5,900

 

6,134

 

6,623

 

6,465

Risk management income

750

 

608

 

703

 

600

 

648

Other

2,337

 

583

 

693

 

1,540

 

6,072

     Total insurance commissions

$    29,130

 

$       25,758

 

$       28,616

 

$    31,126

 

$       32,940

                   

 

 

BancorpSouth Bank

Selected Additional Information

(Dollars in thousands)

(Unaudited)

           
 

Quarter Ended

 

Mar-18

Dec-17

Sep-17

Jun-17

Mar-17

MORTGAGE SERVICING RIGHTS:

         

Fair value, beginning of period

$      69,190

$       66,417

$       65,491

$      67,161

$       65,263

Additions to mortgage servicing rights:

         

   Originations of servicing assets

2,683

3,011

3,393

2,772

2,866

Changes in fair value:

         

   Due to payoffs/paydowns

(2,382)

(2,659)

(2,502)

(2,825)

(1,876)

   Due to change in valuation inputs or

         

     assumptions used in the valuation model

5,716

2,422

36

(1,616)

909

   Other changes in fair value

(1)

(1)

(1)

(1)

(1)

Fair value, end of period

$      75,206

$       69,190

$       66,417

$      65,491

$       67,161

           

MORTGAGE BANKING REVENUE:

         

Production revenue:

         

   Origination

$       5,239

$         2,824

$         4,809

$       5,771

$         5,117

   Servicing

4,875

4,703

4,648

4,697

4,815

   Payoffs/Paydowns

(2,382)

(2,659)

(2,502)

(2,825)

(1,876)

     Total production revenue

7,732

4,868

6,955

7,643

8,056

Market value adjustment on MSR

5,716

2,422

36

(1,616)

909

Market value adjustment on MSR Hedge

(183)

(44)

(82)

107

25

Total mortgage lending revenue

$      13,265

$         7,246

$         6,909

$       6,134

$         8,990

           
           
           

Mortgage loans serviced

$ 6,532,950

$   6,533,642

$   6,506,550

$ 6,431,273

$   6,429,617

MSR/mtg loans serviced

1.15%

1.06%

1.02%

1.02%

1.04%

           

AVAILABLE-FOR-SALE SECURITIES, at fair value

         

U.S. Government agencies

$ 2,385,962

$   2,214,995

$   1,687,186

$ 1,713,374

$   1,818,180

Government agency issued residential

         

   mortgage-back securities

139,148

148,548

157,891

159,246

167,542

Government agency issued commercial

         

   mortgage-back securities

124,041

122,068

153,509

170,642

170,082

Obligations of states and political subdivisions

340,616

312,931

328,314

345,130

352,324

Other

37,427

36,825

33,067

32,903

32,759

Total available-for-sale securities

$ 3,027,194

$   2,835,367

$   2,359,967

$ 2,421,295

$   2,540,887

           

 

 

BancorpSouth Bank

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

     

3/31/2018

 

12/31/2017

 

9/30/2017

 

6/30/2017

 

3/31/2017

                       

Net income

 

$      53,491

 

$   37,523

 

$          39,528

 

$          37,889

 

$          38,093

Plus:

Merger expense, net of tax

 

4,298

 

427

 

-

 

-

 

-

 

Changes due to tax reform

 

-

 

623

 

-

 

-

 

-

Less:

Security gains, net of tax

 

20

 

325

 

3

 

14

 

664

Net operating income

 

$      57,769

 

$   38,248

 

$          39,525

 

$          37,875

 

$          37,429

                       

Less:

MSR market value adjustment, net of tax

 

4,153

 

1,476

 

(28)

 

(936)

 

579

Net operating income-excluding MSR

 

$      53,616

 

$   36,772

 

$          39,553

 

$          38,811

 

$          36,850

                       
                       

Reconciliation of Total Operating Expense to Total Noninterest Expense:

           
                       

Total noninterest expense

 

$    147,701

 

$ 125,881

 

$        126,903

 

$         127,553

 

$         127,109

Less:

Merger expense

 

5,727

 

688

 

-

 

-

 

-

Total operating expense

 

$    141,974

 

$ 125,193

 

$        126,903

 

$         127,553

 

$         127,109

                       

 

 

 

BancorpSouth Bank

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

     

3/31/2018

 

12/31/2017

 

9/30/2017

 

6/30/2017

 

3/31/2017

Tangible assets

                   

Total assets

 

$ 17,185,772

 

$  15,298,518

 

$  14,760,394

 

$ 14,843,130

 

$  14,866,054

Less: 

Goodwill

 

580,900

 

300,798

 

300,798

 

300,798

 

300,798

 

Other identifiable intangible assets

 

40,590

 

17,882

 

18,860

 

19,854

 

20,865

Total tangible assets

 

$ 16,564,282

 

$  14,979,838

 

$  14,440,736

 

$ 14,522,478

 

$  14,544,391

                       

Tangible shareholders' equity

                   

Total shareholders' equity

 

$   2,060,487

 

$    1,713,485

 

$    1,700,502

 

$   1,691,832

 

$    1,702,389

Less:

Goodwill

 

580,900

 

300,798

 

300,798

 

300,798

 

300,798

 

Other identifiable intangible assets

 

40,590

 

17,882

 

18,860

 

19,854

 

20,865

Total tangible shareholders' equity

 

$   1,438,997

 

$    1,394,805

 

$    1,380,844

 

$   1,371,180

 

$    1,380,726

                       

Total average assets

 

$ 16,918,568

 

$  14,809,497

 

$  14,710,245

 

$ 14,741,811

 

$  14,832,260

Total shares of common stock outstanding

 

99,636,779

 

90,312,378

 

90,329,896

 

91,022,729

 

92,344,409

Average shares outstanding-diluted

 

98,942,268

 

90,546,824

 

91,099,770

 

91,530,552

 

93,829,400

                       

Tangible shareholders' equity to tangible assets (1)

 

8.69%

 

9.31%

 

9.56%

 

9.44%

 

9.49%

Return on tangible equity (2)

 

15.08%

 

10.67%

 

11.36%

 

11.08%

 

11.19%

Operating return on tangible equity-excluding MSR (3)

 

15.11%

 

10.46%

 

11.36%

 

11.35%

 

10.82%

Operating return on average assets-excluding MSR (4)

 

1.29%

 

0.99%

 

1.07%

 

1.06%

 

1.01%

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

 

10.80%

 

8.58%

 

9.25%

 

9.27%

 

8.63%

Tangible book value per share (6)

 

$         14.44

 

$          15.44

 

$          15.29

 

$         15.06

 

$         14.95

Operating earnings per share (7)

 

$           0.58

 

$            0.42

 

$            0.43

 

$           0.41

 

$           0.40

Operating earnings per share-excluding MSR (8)

 

$           0.54

 

$            0.41

 

$            0.43

 

$           0.42

 

$           0.39

                       
                       

 

(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 Bank

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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