BancorpSouth Reports Record Annual Earnings; Declares Quarterly Dividend

TUPELO, Miss., Jan. 23, 2019 /PRNewswire/ -- BancorpSouth Bank (NYSE: BXS) (the "Company") today announced financial results for the quarter and year ended December 31, 2018.

Annual highlights for 2018 included:

  • Record net income of $221.3 million, or $2.23 per diluted share.
        
  • Net interest margin – excluding accretable yield – increased to 3.64 percent from 3.54 percent for 2017.
      
  • Improvement in cost structure; operating efficiency ratio – excluding mortgage servicing rights ("MSR") – improved to 66.6 percent compared to 67.8 percent for 2017.
      
  • Continued strong credit quality reflected by provision for credit losses of $4.5 million for the year; net charge-offs of $2.6 million for 2018, which represents 0.02 percent of average loans.
       
  • Recognized a one-time tax benefit of $11.3 million, or $0.11 per diluted share, as a result of a voluntary contribution to the Company's pension plan as well as a tax accounting method change related to the recognition of certain software development costs.
      
  • Net operating income – excluding MSR – of $220.7 million, or $2.23 per diluted share, which represents an increase of 34.3 percent on a per share basis compared to 2017.
      
  • Completed mergers with Central Community Corporation, Ouachita Bancshares Corp., and Icon Capital Corporation – collectively contributing $1.9 billion in loans and $2.5 billion in deposits.
      
  • Repurchased 6 million shares of outstanding common stock at a weighted average price of $31.19 per share.

Highlights for the fourth quarter of 2018 included:

  • Reported quarterly net income of $47.1 million, or $0.47 per diluted share.
      
  • Earnings were impacted by a negative pre-tax MSR valuation adjustment of $8.1 million.
     
  • Completed operational integration of Icon Capital Corporation merger; recorded merger-related expenses of $4.5 million for the quarter.
      
  • Net operating income – excluding MSR – of $56.4 million, or $0.57 per diluted share, which represents an increase of 39.0 percent on a per share basis compared to the fourth quarter of 2017.
      
  • Net interest margin – excluding accretable yield – increased to 3.71 percent compared with 3.62 percent for the third quarter of 2018.
      
  • Announced the signing of definitive merger agreements with Casey Bancorp, Inc., the parent company of Grand Bank of Texas, and Merchants Trust, Inc., the parent company of Merchants Bank.
      
  • Repurchased approximately 3 million shares of outstanding common stock at a weighted average price of $30.22 per share.

The Company reported net income of $47.1 million, or $0.47 per diluted share, for the fourth quarter of 2018 compared with net income of $37.5 million, or $0.41 per diluted share, for the fourth quarter of 2017 and net income of $66.7 million, or $0.67 per diluted share, for the third quarter of 2018.  The Company reported net operating income – excluding MSR – of $56.4 million, or $0.57 per diluted share, for the fourth quarter of 2018 compared with $36.8 million, or $0.41 per diluted share, for the fourth quarter of 2017 and $55.0 million, or $0.56 per diluted share, for the third quarter of 2018. 

Additionally, the Company reported net income of $221.3 million, or $2.23 per diluted share, for the year ended December 31, 2018 compared with $153.0 million, or $1.67 per diluted share, for the year ended December 31, 2017.  The Company reported net operating income – excluding MSR – of $220.7 million, or $2.23 per diluted share, for the year ended December 31, 2018 compared with $152.0 million, or $1.66 per diluted share, for the year ended December 31, 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 recognized securities gains and losses, MSR valuation adjustments, restructuring charges, merger-related expenses, and other one-time charges. 

At its regular quarterly meeting today, the Board of Directors of the Company declared a quarterly cash dividend of $0.17 per share of common stock.  The dividend is payable April 1, 2019 to shareholders of record at the close of business on March 15, 2019.

"The financial results for 2018 reflect several meaningful accomplishments achieved by our team through continued hard work and dedication," remarked Dan Rollins, BancorpSouth Chairman and Chief Executive Officer.  "Our earnings for the year are a record for our Company, both in terms of net income of $221.3 million and diluted earnings per share of $2.23, which represents an increase of over 30 percent on a per share basis.  Additionally, our Company exceeded $18 billion in total assets for the first time in our history.  This growth was achieved through continued organic loan growth combined with the closing and integration of the first three bank transactions that our Company has completed since 2007.  We were particularly pleased with our ability to achieve approximately 10 percent organic loan growth in Texas."

"Most recently, we closed the merger with Icon Capital Corporation effective October 1, 2018 and completed the operational systems integration later in the fourth quarter.  This growth, combined with a continued focus on controlling expenses, aided us in improving our operating efficiency ratio – excluding MSR – to 66.6 percent for 2018.   Additionally, we reported an increase in our net interest margin for the year while maintaining stable credit quality.  Finally, in addition to the capital deployed in our growth efforts, we repurchased 6 million shares of our Company's stock during the year."

"As we look specifically at fourth quarter results, the story and accomplishments are a microcosm of our annual results.  First, we are excited about the recent transaction announcements with Merchants Bank and Grand Bank of Texas.  We are optimistic about the value they will add to our bank and we look forward to having them formally join our team in 2019.  As we look at our financial results for the quarter, we are pleased to report another record quarter of net operating income – excluding MSR – which increased to $0.57 per share compared to $0.56 per share for the third quarter of 2018 despite seasonal quarterly headwinds associated with several of our product offerings.  The increase in earnings was achieved largely through improvement in our net interest margin – excluding accretable yield – which increased to 3.71 percent for the fourth quarter compared to 3.62 percent for the third quarter of 2018.   Finally, of the 6 million shares repurchased during 2018, approximately 3 million were repurchased during the fourth quarter."

Net Interest Revenue

Net interest revenue was $152.9 million for the fourth quarter of 2018, an increase of 25.9 percent from $121.4 million for the fourth quarter of 2017 and an increase of 7.6 percent from $142.1 million for the third quarter of 2018.  The fully taxable equivalent net interest margin was 3.80 percent for the fourth quarter of 2018 compared with 3.58 percent for the fourth quarter of 2017 and 3.67 percent for the third quarter of 2018.  Yields on net loans and leases were 4.94 percent for the fourth quarter of 2018 compared with 4.36 percent for the fourth quarter of 2017 and 4.72 percent for the third quarter of 2018, while yields on total interest earning assets were 4.45 percent for the fourth quarter of 2018 compared with 3.90 percent for the fourth quarter of 2017 and 4.21 percent for the third quarter of 2018.  The net interest margin, excluding accretable yield, was 3.71 percent for the fourth quarter of 2018 compared with 3.62 percent for the third quarter of 2018 while yields on net loans and leases, excluding accretable yield, were 4.83 percent for the fourth quarter of 2018 compared with 4.64 percent for the third quarter of 2018.  Purchase accounting accretion did not impact the net interest margin or net loan and lease yields for the fourth quarter of 2017.  The average cost of deposits was 0.52 percent for the fourth quarter of 2018 compared with 0.27 percent for the fourth quarter of 2017 and 0.43 percent for the third quarter of 2018.

Asset, Deposit and Loan Activity

Total assets were $18.0 billion at December 31, 2018 compared with $15.3 billion at December 31, 2017.  Loans and leases, net of unearned income, were $13.1 billion at December 31, 2018 compared with $11.1 billion at December 31, 2017.  Total deposits were $14.1 billion at December 31, 2018 compared with $11.9 billion at December 31, 2017.  These balance sheet comparisons include the impact of the acquisitions of Central Community Corporation and Ouachita Bancshares Corp., each of which closed effective January 15, 2018, and the acquisition of Icon Capital Corporation, which closed effective October 1, 2018.  Balance sheet totals for these three 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 fourth quarter of 2018 reflect a provision for credit losses of $1.0 million, compared with a provision of $0.5 million for the fourth quarter of 2017 and no provision for the third quarter of 2018.  Net charge-offs for the fourth quarter of 2018 were $1.9 million, compared with net charge-offs of $1.8 million for the fourth quarter of 2017 and net recoveries of $1.1 million for the third quarter of 2018.  The allowance for credit losses was $120.1 million, or 0.92 percent of net loans and leases, at December 31, 2018, compared with $118.2 million, or 1.07 percent of net loans and leases, at December 31, 2017 and $121.0 million, or 0.97 percent of net loans and leases, at September 30, 2018.  The allowance for credit losses coverage metrics were impacted by loans acquired in the acquisitions that closed during the first and fourth quarters of 2018.

Total non-performing assets were $106.0 million, or 0.81 percent of net loans and leases, at December 31, 2018 compared with $84.5 million, or 0.76 percent of net loans and leases, at December 31, 2017, and $70.3 million, or 0.56 percent of net loans and leases, at September 30, 2018.  Other real estate owned was $9.3 million at December 31, 2018 compared with $6.0 million at December 31, 2017 and $4.3 million at September 30, 2018.  Increases within each of these balances compared to the third quarter of 2018 were primarily due to loans acquired during the fourth quarter.

Noninterest Revenue

Noninterest revenue was $59.0 million for the fourth quarter of 2018, compared with $63.1 million for the fourth quarter of 2017 and $71.6 million for the third quarter of 2018.  These results include a negative MSR valuation adjustment of $8.1 million for the fourth quarter of 2018, compared with a positive MSR valuation adjustment of $2.4 million for the fourth quarter of 2017 and a positive MSR valuation adjustment of $1.5 million for the third quarter of 2018.  Valuation adjustments in the MSR asset are driven primarily by fluctuations in interest rates period over period.   

Excluding the MSR valuation adjustment, mortgage banking revenue was $4.8 million for the fourth quarter of 2018, compared with $4.9 million for the fourth quarter of 2017 and $5.0 million for the third quarter of 2018.  Mortgage origination volume for the fourth quarter of 2018 was $305.0 million, compared with $308.4 million for the fourth quarter of 2017 and $384.8 million for the third quarter of 2018.  Of the total mortgage origination volume for the fourth quarter of 2018, $47.3 million was portfolio loans, compared with $48.1 million for the fourth quarter of 2017 and $95.4 million for the third quarter of 2018.

Credit card, debit card, and merchant fee revenue was $9.9 million for the fourth quarter of 2018, compared with $9.5 million for the fourth quarter of 2017 and $9.9 million for the third quarter of 2018.  Deposit service charge revenue was $11.7 million for the fourth quarter of 2018, compared with $10.3 million for the fourth quarter of 2017 and $11.3 million for the third quarter of 2018.  Wealth management revenue was $5.5 million for the fourth quarter of 2018, compared with $5.6 million for the fourth quarter of 2017 and $6.0 million for the third quarter of 2018.  Other noninterest revenue was $7.0 million for the fourth quarter of 2018, compared with $4.1 million for the fourth quarter of 2017 and $6.3 million for the third quarter of 2018.

Insurance commission revenue was $28.0 million for the fourth quarter of 2018, compared with $25.8 million for the fourth quarter of 2017 and $31.7 million for the third quarter of 2018.  New accounting guidance, which became effective January 1, 2018, impacted the Company's accounting for insurance commission revenue.  Previously, contingent commissions were recognized as revenue in the period of receipt; however, under the new guidance, the Company is required to estimate and accrue for contingent commissions throughout the year.  While this guidance impacted the comparability of quarterly results, annual results were not impacted.  For the year, insurance commission revenue increased 2.8 percent from $118.4 million for 2017 to $121.8 million for 2018.

 

Noninterest Expense

Noninterest expense for the fourth quarter of 2018 was $152.3 million, compared with $125.9 million for the fourth quarter of 2017 and $142.4 million for the third quarter of 2018.  Salaries and employee benefits expense was $92.0 million for the fourth quarter of 2018 compared with $77.3 million for the fourth quarter of 2017 and $89.6 million for the third quarter of 2018.  Occupancy expense was $12.1 million for the fourth quarter of 2018, compared with $10.1 million for the fourth quarter of 2017 and $11.7 million for the third quarter of 2018.  Other noninterest expense was $42.5 million for the fourth quarter of 2018, compared with $32.2 million for the fourth quarter of 2017 and $34.1 million for the third quarter of 2018.  Additionally, merger-related expense for the fourth quarter of 2018 was $4.5 million, compared with merger-related expense of $0.7 million for the fourth quarter of 2017 and $0.9 million for the third quarter of 2018. 

Income Tax Expense

Income tax expense for the third quarter of 2018 included a one-time tax benefit of $11.3 million as a result of a voluntary contribution to the Company's pension plan as well as a tax accounting method change related to the recognition of certain software development costs. 

Capital Management

The Company's equity capitalization is comprised entirely of common stock.  The Company's ratio of shareholders' equity to assets was 12.25 percent at December 31, 2018, compared with 11.20 percent at December 31, 2017 and 12.27 percent at September 30, 2018.  The ratio of tangible shareholders' equity to tangible assets was 8.46 percent at December 31, 2018, compared with 9.31 percent at December 31, 2017 and 8.96 percent at September 30, 2018.

During the fourth quarter of 2018, the Company repurchased 2,973,416 shares of its outstanding common stock at a weighted average price of $30.22 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.  For the full year 2018, the Company repurchased 6,000,000 shares of its outstanding common stock at a weighted average price of $31.19 per share.  As of December 31, 2018, the Company had 3,000,000 remaining shares available for repurchase under its current share repurchase authorization, which expires on December 31, 2019.  

Estimated regulatory capital ratios at December 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 December 31, 2018, with Tier 1 risk-based capital of 10.85 percent and total risk-based capital of 11.68 percent, compared with required minimum levels of 8 percent and 10 percent, respectively, in order to qualify for "well capitalized" classification. 

Summary

Rollins concluded, "We are very pleased with the progress we made as a company in 2018.  While the benefits associated with the Tax Cuts and Jobs Act of 2017 contributed to the improvement in many of our return metrics and also impacted comparability to prior periods, we saw improvement in many other fundamental operating metrics as well.  As expected, we reported a meaningful increase in our net interest margin, which contributed to the growth in our net interest income.  Stable credit quality, including a low level of net charge-offs, resulted in a modest provision for credit losses of $4.5 million for the year.  Finally, our efforts to continue to improve our cost structure are evident in the improvement in our operating efficiency.   As we look to 2019, our focus will remain much the same.  We continue to emphasize the importance of organic growth to our team while also looking for additional strategic opportunities.  We will also work to take the steps necessary to complete our two pending merger transactions while working to realize additional cost savings associated with the merger transactions we closed in 2018.   Most importantly, we will focus on continuing to manage and deploy capital in a manner that maximizes value for our shareholders."

TRANSACTIONS

Casey Bancorp, Inc.

On November 13, 2018, the Company announced the signing of a definitive merger agreement ("Grand Bank Merger Agreement") with Casey Bancorp, Inc. and its wholly owned subsidiary, Grand Bank of Texas, (collectively referred to as "Grand Bank"), pursuant to which Grand Bank agreed to be merged with and into the Company (the "Grand Bank Merger").  Grand Bank operates 4 full-service banking offices in the cities of Dallas, Grand Prairie, Horseshoe Bay and Marble Falls, all in Texas.  As of December 31, 2018, Grand Bank, on a consolidated basis, reported total assets of $344.0 million, total loans of $256.6 million and total deposits of $314.7 million.  Under the terms of the Grand Bank Merger Agreement, the Company expects to issue approximately 1,275,000 shares of the Company's common stock plus $11.0 million in cash for all outstanding shares of Casey Bancorp, Inc.'s capital stock.  For more information regarding the Grand Bank Merger, see our Current Report on Form 8-K that was filed with the Federal Deposit Insurance Corporation ("FDIC") on November 13, 2018.  The Grand Bank Merger Agreement has been unanimously approved by the Boards of Directors of both the Company and Grand Bank. Grand Bank has agreed to convene a meeting of its shareholders to vote upon the approval of the Grand Bank Merger Agreement. Subject to the satisfaction of all closing conditions, including the receipt of all required regulatory approvals, the Grand Bank Merger is expected to be completed during the first half of 2019, although the Company can provide no assurance that the merger will close during this time period or at all.

Merchants Trust, Inc.

On November 13, 2018, the Company announced the signing of a definitive merger agreement ("Merchants Merger Agreement") with Merchants Trust, Inc. and its wholly owned subsidiary, Merchants Bank, (collectively referred to as "Merchants"), pursuant to which Merchants agreed to be merged with and into the Company (the  "Merchants Merger").  Merchants, which is based in Jackson, Alabama, operates 6 full-service banking offices in Clarke and Mobile counties in Alabama.  As of December 31, 2018, Merchants, on a consolidated basis, reported total assets of $219.1 million, total loans of $152.9 million and total deposits of $192.3 million.  Under the terms of the Merchants Merger Agreement, the Company expects to issue approximately 950,000 shares of the Company's common stock plus $8.0 million in cash for all outstanding shares of Merchants Trust, Inc.'s capital stock.  For more information regarding the Merchants Merger, see our Current Report on Form 8-K that was filed with the FDIC on November 13, 2018.  The Merchants Merger Agreement has been unanimously approved by the Boards of Directors of both the Company and Merchants. Merchants has agreed to convene a meeting of its shareholders to vote upon the approval of the Merchants Merger Agreement. Subject to the satisfaction of all closing conditions, including the receipt of all required regulatory approvals, the Merchants Merger is expected to be completed during the first half of 2019, although the Company can provide no assurance that the merger will close during this time period or at all.

Icon Capital Corporation

Effective October 1, 2018, the Company completed the merger with Icon Capital Corporation and its wholly owned subsidiary, Icon Bank of Texas, National Association (collectively referred to as "Icon"), pursuant to which Icon was merged with and into the Company (the "Icon Merger").  Icon was headquartered in Houston, Texas and operated 7 full-service banking offices in the Houston, Texas metropolitan area.  As of October 1, 2018, Icon, on a consolidated basis, reported total assets of $760.4 million, total loans of $650.4 million and total deposits of $675.8 million.  Under the terms of the definitive merger agreement, the Company issued approximately 4,125,000 shares of the Company's common stock plus $17.5 million in cash, $7 million of which was placed in a separate non-interest bearing escrow account that is to be paid if certain conditions are met, as described in the Current Report on Form 8-K filed with the FDIC on October 1, 2018, for all outstanding shares of Icon Capital Corporation's capital stock.  For more information regarding the Icon Merger, see our Current Report on Form 8-K that was filed with the FDIC on October 1, 2018.  The purchase accounting for this transaction 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.

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 (the "CCC Merger").  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 for this transaction 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 (the "OIB Merger").  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 for this transaction 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.

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 23 of this news release.

Conference Call and Webcast

The Company will conduct a conference call to discuss its fourth quarter and year end 2018 financial results on January 24, 2019, 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.investorroom.com/Webcasts. 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 approximately $18 billion in assets.  BancorpSouth operates approximately 285 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 Icon, CCC, OIB, Grand Bank and Merchants mergers on the Company, the acceptance by customers of Icon, CCC, OIB, Grand Bank and Merchants of the Company's products and services after the closing of the mergers, the opportunities to enhance market share in certain markets and market acceptance of the Company generally in new markets, 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 Icon, CCC, OIB, Grand Bank and Merchants mergers, the possibility that any of the anticipated benefits, costs, synergies and financial and operational improvements of the Icon, CCC, OIB, Grand Bank and Merchants mergers will not be realized or will not be realized as expected, the ability of the Company and Grand Bank and Merchants to complete the Grand Bank Merger and Merchants Merger, the ability of the Company and Grand Bank and Merchants to satisfy the conditions to the completion of the Grand Bank Merger and Merchants Merger, including the approval of the merger transaction by Grand Bank's shareholders and Merchants' shareholders and the receipt of all regulatory approvals required for the Grand Bank Merger and Merchants Merger on the terms expected in the Grand Bank Merger Agreement and the Merchants Merger Agreement, the ability of the Company and Grand Bank and Merchants to meet expectations regarding the timing, completion and accounting and tax treatments of the Grand Bank Merger and Merchants Merger, the possibility that any of the anticipated benefits of the Grand Bank Merger and Merchants Merger will not be realized or will not be realized as expected, the failure of the Grand Bank Merger or Merchants Merger to close for any other reason, the effect of any announcements regarding the Grand Bank Merger or Merchants Merger on the Company's operating results, the possibility that the Grand Bank Merger and Merchants Merger may be more expensive to complete than anticipated, including as a result of unexpected factors or events, the lack of availability of the Company's filings mandated by the Exchange Act from the SEC's publicly available website after November 1, 2017, 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

Year to Date

Year to Date

 

12/31/2018

9/30/2018

6/30/2018

3/31/2018

12/31/2017

12/31/2018

12/31/2017

Earnings Summary:

             

Interest revenue

$                    178,850

$                    163,158

$                    159,290

$                    152,195

$                    132,276

$            653,493

$            512,991

Interest expense

25,969

21,023

17,162

14,117

10,890

78,271

38,955

Net interest revenue

152,881

142,135

142,128

138,078

121,386

575,222

474,036

Provision for credit losses

1,000

-

2,500

1,000

500

4,500

3,000

Net interest revenue, after provision

             

   for credit losses

151,881

142,135

139,628

137,078

120,886

570,722

471,036

Noninterest revenue

59,031

71,616

72,456

78,934

63,074

282,037

268,033

Noninterest expense

152,342

142,409

145,182

147,701

125,881

587,634

507,446

Income before income taxes

58,570

71,342

66,902

68,311

58,079

265,125

231,623

Income tax expense

11,473

4,659

12,856

14,820

20,556

43,808

78,590

Net income

$                      47,097

$                      66,683

$                      54,046

$                      53,491

$                      37,523

$            221,317

$            153,033

               

Balance Sheet - Period End Balances

             

Total assets

$               18,001,540

$               17,249,175

$               17,222,491

$               17,185,772

$               15,298,518

$       18,001,540

$       15,298,518

Total earning assets

16,144,098

15,594,549

15,600,037

15,593,366

14,081,818

16,144,098

14,081,818

Total securities

2,749,188

2,826,359

2,828,754

2,989,767

2,798,542

2,749,188

2,798,542

Loans and leases, net of unearned income

13,112,149

12,449,995

12,418,114

12,296,849

11,056,434

13,112,149

11,056,434

Allowance for credit losses

120,070

121,019

119,920

119,434

118,200

120,070

118,200

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

1,315,756

835,939

926,996

1,076,208

-

1,315,756

-

Remaining loan mark on acquired loans

31,875

13,368

14,485

19,330

-

31,875

-

Total deposits

14,069,966

13,347,193

13,476,558

13,894,301

11,915,596

14,069,966

11,915,596

Long-term debt

6,213

33,182

33,214

32,963

30,000

6,213

30,000

Total shareholders' equity

2,205,737

2,116,375

2,072,083

2,060,487

1,713,485

2,205,737

1,713,485

               

Balance Sheet - Average Balances

             

Total assets

$               17,879,081

$               17,059,865

$               17,094,283

$               16,918,568

$               14,809,497

$       17,240,092

$       14,773,217

Total earning assets

16,056,656

15,465,260

15,496,007

15,374,336

13,678,542

15,599,570

13,655,146

Total securities

2,784,437

2,814,751

2,906,235

2,966,917

2,414,140

2,867,439

2,421,565

Loans and leases, net of unearned income

13,063,422

12,433,701

12,334,756

12,084,020

11,010,187

12,481,534

10,932,505

Total deposits

14,072,416

13,387,849

13,539,324

13,563,510

11,840,049

13,641,476

11,871,281

Long-term debt

17,403

33,196

33,147

34,433

30,000

29,508

278,493

Total shareholders' equity

2,191,852

2,089,746

2,051,452

2,012,639

1,701,228

2,086,922

1,702,176

               

Nonperforming Assets:

             

Non-accrual loans and leases

$                      70,555

$                      55,532

$                      60,045

$                      65,303

$                      61,891

$              70,555

$              61,891

Loans and leases 90+ days past due, still accruing

18,695

2,934

6,335

6,519

8,503

18,695

8,503

Restructured loans and leases, still accruing

7,498

7,564

6,982

9,681

8,060

7,498

8,060

Non-performing loans (NPLs)

96,748

66,030

73,362

81,503

78,454

96,748

78,454

Other real estate owned

9,276

4,301

7,828

9,362

6,038

9,276

6,038

Non-performing assets (NPAs)

$                    106,024

$                      70,331

$                      81,190

$                      90,865

$                      84,492

$            106,024

$              84,492

               

Financial Ratios and Other Data:

             

Return on average assets

1.05%

1.55%

1.27%

1.28%

1.01%

1.28%

1.04%

Operating return on average assets-excluding MSR*

1.25%

1.28%

1.31%

1.29%

0.99%

1.28%

1.03%

Return on average shareholders' equity

8.52%

12.66%

10.57%

10.78%

8.75%

10.60%

8.99%

Operating return on average shareholders' equity-excluding MSR*

10.20%

10.45%

10.88%

10.80%

8.58%

10.57%

8.93%

Return on tangible equity*

12.81%

17.76%

15.00%

15.08%

10.67%

15.17%

10.97%

Operating return on tangible equity-excluding MSR*

15.33%

14.66%

15.44%

15.11%

10.46%

15.12%

10.90%

Noninterest income to average assets

1.31%

1.67%

1.70%

1.89%

1.69%

1.64%

1.81%

Noninterest expense to average assets

3.38%

3.31%

3.41%

3.54%

3.37%

3.41%

3.43%

Net interest margin-fully taxable equivalent

3.80%

3.67%

3.71%

3.67%

3.58%

3.72%

3.54%

Net interest margin-fully taxable equivalent, excluding net accretion

             

  on acquired loans and leases

3.71%

3.62%

3.63%

3.60%

N/A

3.64%

N/A

Net interest rate spread

3.53%

3.43%

3.52%

3.52%

3.44%

3.50%

3.41%

Efficiency ratio (tax equivalent)*

71.52%

66.29%

67.31%

67.66%

67.45%

68.22%

67.57%

Operating efficiency ratio-excluding MSR (tax equivalent)*

66.86%

66.34%

66.36%

66.79%

68.16%

66.62%

67.78%

Loan/deposit ratio

93.19%

93.28%

92.15%

88.50%

92.79%

93.19%

92.79%

Price to earnings multiple (avg)

11.67

15.07

17.07

17.77

18.95

11.67

18.95

Market value to book value

118.27%

152.23%

156.95%

153.77%

165.76%

118.27%

165.76%

Market value to book value (avg)

131.34%

158.19%

159.33%

159.14%

169.35%

146.37%

161.70%

Market value to tangible book value

178.79%

216.28%

225.06%

220.18%

203.64%

178.79%

203.64%

Market value to tangible book value (avg)

198.55%

224.75%

228.47%

227.87%

208.04%

221.26%

198.65%

Employee FTE

4,445

4,270

4,366

4,305

3,947

4,445

3,947

               

*Denotes non-GAAP financial measure.  Refer to related disclosure and reconciliation on pages 23 and 24.

         
               

 

 

BancorpSouth Bank

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

 

12/31/2018

9/30/2018

6/30/2018

3/31/2018

12/31/2017

12/31/2018

12/31/2017

               

Credit Quality Ratios:

             

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

0.06%

(0.04%)

0.07%

(0.01%)

0.06%

0.02%

0.08%

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

0.03%

0.00%

0.08%

0.03%

0.02%

0.04%

0.03%

Allowance for credit losses to net loans and leases

0.92%

0.97%

0.97%

0.97%

1.07%

0.92%

1.07%

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

1.02%

1.04%

1.05%

1.07%

N/A

1.02%

N/A

Allowance for credit losses to non-performing loans and leases

124.11%

183.28%

163.46%

146.54%

150.66%

124.11%

150.66%

Allowance for credit losses to non-performing assets

113.25%

172.07%

147.70%

131.44%

139.89%

113.25%

139.89%

Non-performing loans and leases to net loans and leases

0.74%

0.53%

0.59%

0.66%

0.71%

0.74%

0.71%

Non-performing assets to net loans and leases

0.81%

0.56%

0.65%

0.74%

0.76%

0.81%

0.76%

               

Equity Ratios:

             

Total shareholders' equity to total assets

12.25%

12.27%

12.03%

11.99%

11.20%

12.25%

11.20%

Tangible shareholders' equity to tangible assets*

8.46%

8.96%

8.71%

8.69%

9.31%

8.46%

9.31%

               
               

Capital Adequacy:

             

Common  Equity Tier 1 capital

10.85%

11.71%

11.42%

11.30%

12.15%

10.85%

12.15%

Tier 1 capital

10.85%

11.71%

11.42%

11.30%

12.15%

10.85%

12.15%

Total capital

11.68%

12.60%

12.30%

12.18%

13.13%

11.68%

13.13%

Tier 1 leverage capital

9.06%

9.68%

9.38%

9.39%

10.12%

9.06%

10.12%

   Estimated for current quarter

             
               

Common Share Data:

             

Basic earnings per share

$                          0.47

$                          0.68

$                          0.55

$                          0.54

$                          0.42

2.24

$                  1.67

Diluted earnings per share

0.47

0.67

0.55

0.54

0.41

2.23

1.67

Operating earnings per share*

0.51

0.57

0.56

0.58

0.42

2.22

1.67

Operating earnings per share- excluding MSR*

0.57

0.56

0.56

0.54

0.41

2.23

1.66

Cash dividends per share

0.17

0.17

0.14

0.14

0.14

0.62

0.53

Book value per share

22.10

21.48

20.99

20.68

18.97

22.10

18.97

Tangible book value per share*

14.62

15.12

14.64

14.44

15.44

14.62

15.44

Market value per share (last)

26.14

32.70

32.95

31.80

31.45

26.14

31.45

Market value per share (high)

33.50

35.40

35.45

35.55

34.45

35.55

34.45

Market value per share (low)

24.31

32.45

30.60

30.90

30.25

24.31

27.20

Market value per share (avg)

29.03

33.98

33.45

32.91

32.13

32.35

30.67

Dividend payout ratio

35.93%

25.15%

25.62%

25.85%

33.70%

27.72%

31.71%

Total shares outstanding

99,797,271

98,525,516

98,700,509

99,636,779

90,312,378

99,797,271

90,312,378

Average shares outstanding - basic

99,541,965

98,646,087

98,906,619

98,765,789

90,321,137

98,965,115

91,560,499

Average shares outstanding - diluted

99,720,219

98,819,905

99,057,054

98,942,268

90,546,824

99,134,861

91,754,749

               
               

Yield/Rate:

             

(Taxable equivalent basis)

             

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

4.94%

4.72%

4.67%

4.60%

4.36%

4.73%

4.29%

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

             

  net accretion on acquired loans and leases

4.83%

4.64%

4.57%

4.51%

N/A

4.64%

N/A

Available-for-sale securities:

             

  Taxable

1.92%

1.80%

1.77%

1.72%

1.48%

1.80%

1.40%

  Tax-exempt

4.47%

4.40%

4.39%

4.30%

5.29%

4.39%

5.27%

Short-term, FHLB and other equity investments

2.84%

2.04%

2.02%

1.54%

1.27%

2.00%

0.89%

  Total interest earning assets and revenue

4.45%

4.21%

4.15%

4.05%

3.90%

4.22%

3.82%

Deposits

0.52%

0.43%

0.34%

0.31%

0.27%

0.40%

0.25%

  Demand - interest bearing

0.70%

0.59%

0.43%

0.36%

0.29%

0.52%

0.26%

  Savings

0.30%

0.24%

0.15%

0.13%

0.13%

0.20%

0.12%

  Other time

1.26%

1.06%

0.95%

0.89%

0.86%

1.04%

0.82%

Short-term borrowings

2.06%

1.79%

1.62%

1.25%

0.96%

1.71%

0.78%

Total interest bearing deposits and short-term borrowings

0.91%

0.77%

0.62%

0.51%

0.45%

0.71%

0.39%

Junior subordinated debt

N/A

N/A

N/A

0.00%

N/A

N/A

3.29%

Long-term debt

4.12%

4.06%

4.11%

4.17%

4.05%

4.11%

1.14%

  Total interest bearing liabilities and expense

0.92%

0.78%

0.63%

0.53%

0.46%

0.72%

0.41%

Interest bearing liabilities to interest earning assets

69.79%

69.12%

70.27%

70.91%

69.09%

70.01%

69.64%

Net interest tax equivalent adjustment

$                        1,088

$                        1,088

$                        1,119

$                        1,205

$                        2,155

$                4,390

$                8,897

               

*Denotes non-GAAP financial measure.  Refer to related disclosure and reconciliation on pages 23 and 24.

       

 

 

           

BancorpSouth Bank

Consolidated Balance Sheets

(Unaudited)

           
 

Dec-18

Sep-18

Jun-18

Mar-18

Dec-17

 

(Dollars in thousands)

Assets

         

Cash and due from banks

$                239,960

$                169,493

$                198,374

$                180,104

$                167,283

Interest bearing deposits with other banks

         

and Federal funds sold

92,476

138,677

152,566

127,345

53,440

Available-for-sale securities, at fair value

2,749,188

2,826,359

2,828,754

2,989,767

2,798,542

Loans and leases

13,129,012

12,464,877

12,433,152

12,312,346

11,072,062

  Less:  Unearned income

16,863

14,882

15,038

15,497

15,628

             Allowance for credit losses

120,070

121,019

119,920

119,434

118,200

Net loans and leases

12,992,079

12,328,976

12,298,194

12,177,415

10,938,234

Loans held for sale

140,300

132,080

153,396

141,979

136,577

Premises and equipment, net

361,859

342,947

339,372

342,353

314,362

Accrued interest receivable

57,054

56,369

51,921

52,856

45,671

Goodwill

695,720

590,292

588,004

580,900

300,798

Other identifiable intangibles

50,896

36,475

39,031

40,590

17,882

Bank owned life insurance

308,324

304,687

306,116

304,850

292,069

Other real estate owned

9,276

4,301

7,828

9,362

6,038

Other assets

304,408

318,519

258,935

238,251

227,622

Total Assets

$           18,001,540

$           17,249,175

$           17,222,491

$           17,185,772

$           15,298,518

Liabilities

         

Deposits:

         

  Demand:  Noninterest bearing

$             4,124,744

$             4,007,158

$             4,135,322

$             4,035,830

$             3,453,000

                  Interest bearing

5,898,851

5,535,689

5,509,901

5,945,359

5,066,614

  Savings

1,836,167

1,783,602

1,810,149

1,843,264

1,638,799

  Other time

2,210,204

2,020,744

2,021,186

2,069,848

1,757,183

Total deposits

14,069,966

13,347,193

13,476,558

13,894,301

11,915,596

Securities sold under agreement to repurchase

416,008

403,724

407,704

469,114

417,867

Federal funds purchased

         

   and other short-term borrowing

1,095,000

1,095,000

1,025,022

500,000

1,025,000

Accrued interest payable

8,543

7,330

5,961

5,525

4,882

Long-term debt

6,213

33,182

33,214

32,963

30,000

Other liabilities

200,073

246,371

201,949

223,382

191,688

Total Liabilities

15,795,803

15,132,800

15,150,408

15,125,285

13,585,033

Shareholders' Equity

         

Common stock

249,493

246,314

246,751

249,092

225,781

Capital surplus

484,482

439,590

441,950

465,699

177,624

Accumulated other comprehensive loss

(80,491)

(91,650)

(88,751)

(85,994)

(63,843)

Retained earnings

1,552,253

1,522,121

1,472,133

1,431,690

1,373,923

Total Shareholders' Equity

2,205,737

2,116,375

2,072,083

2,060,487

1,713,485

Total Liabilities & Shareholders' Equity

$           18,001,540

$           17,249,175

$           17,222,491

$           17,185,772

$           15,298,518

           

 

 

             

BancorpSouth Bank

Consolidated Average Balance Sheets

(Unaudited)

             
 

Dec-18

Sep-18

Jun-18

Mar-18

Dec-17

 
 

(Dollars in thousands)

 

Assets

           

Cash and due from banks

$                218,553

$                179,098

$                203,220

$                202,141

$                154,843

 

Interest bearing deposits with other banks

           

and Federal funds sold

62,516

57,204

66,035

182,488

108,880

 

Available-for-sale securities, at fair value

2,784,437

2,814,751

2,906,235

2,966,917

2,414,140

 

Loans and leases

13,079,321

12,448,814

12,350,226

12,099,694

11,026,437

 

  Less:  Unearned income

15,899

15,113

15,470

15,674

16,250

 

             Allowance for credit losses

120,426

120,678

119,622

118,840

119,124

 

Net loans and leases

12,942,996

12,313,023

12,215,134

11,965,180

10,891,063

 

Loans held for sale

96,588

112,387

144,400

98,662

112,118

 

Premises and equipment, net

372,488

340,456

342,395

343,098

313,874

 

Accrued interest receivable

54,156

50,437

48,767

47,770

40,228

 

Goodwill

668,544

588,777

583,188

544,840

300,798

 

Other identifiable intangibles

47,567

37,529

39,752

17,811

18,231

 

Bank owned life insurance

305,888

305,476

305,016

301,982

265,761

 

Other real estate owned

15,048

6,245

8,997

9,300

5,777

 

Other assets

310,300

254,482

231,144

238,379

183,784

 

Total Assets

$           17,879,081

$           17,059,865

$           17,094,283

$           16,918,568

$           14,809,497

 

Liabilities

           

Deposits:

           

  Demand:  Noninterest bearing

$             4,284,521

$             4,076,890

$             3,976,039

$             3,822,216

$             3,479,771

 

                  Interest bearing

5,753,655

5,495,517

5,697,444

5,898,269

4,949,183

 

  Savings

1,836,148

1,794,229

1,820,013

1,801,128

1,631,617

 

  Other time

2,198,092

2,021,213

2,045,828

2,041,897

1,779,478

 

Total deposits

14,072,416

13,387,849

13,539,324

13,563,510

11,840,049

 

Securities sold under agreement to repurchase

447,727

427,583

416,839

445,840

471,581

 

Federal funds purchased

           

   and other short-term borrowing

953,137

918,153

875,641

667,546

589,261

 

Accrued interest payable

8,305

6,617

5,600

5,177

4,718

 

Long-term debt

17,403

33,196

33,147

34,433

30,000

 

Other liabilities

188,241

196,721

172,280

189,423

172,660

 

Total Liabilities

15,687,229

14,970,119

15,042,831

14,905,929

13,108,269

 

Shareholders' Equity

           

Common stock

250,752

246,635

247,120

247,189

225,808

 

Capital surplus

497,330

441,779

444,379

447,576

176,613

 

Accumulated other comprehensive loss

(91,541)

(89,244)

(88,962)

(71,205)

(55,181)

 

Retained earnings

1,535,311

1,490,576

1,448,915

1,389,079

1,353,988

 

Total Shareholders' Equity

2,191,852

2,089,746

2,051,452

2,012,639

1,701,228

 

Total Liabilities & Shareholders' Equity

$           17,879,081

$           17,059,865

$           17,094,283

$           16,918,568

$           14,809,497

 
             

 

 

BancorpSouth Bank

Consolidated Condensed Statements of Income

(Dollars in thousands, except per share data)

(Unaudited)

                           
 

Quarter Ended

     

Year to Date

 

Dec-18

 

Sep-18

 

Jun-18

 

Mar-18

 

Dec-17

 

Dec-18

 

Dec-17

INTEREST REVENUE:

                         

Loans and leases

$  162,237

 

$  147,404

 

$   143,029

 

$  136,568

 

$  120,381

 

$ 589,238

 

$ 466,764

Deposits with other banks

457

 

243

 

331

 

664

 

300

 

1,695

 

1,255

Federal funds sold, securities purchased

                         

   under agreement to resell, FHLB and 

                         

      other equity investments

344

 

295

 

226

 

191

 

157

 

1,056

 

518

Available-for-sale securities:

                         

    Taxable

12,208

 

11,529

 

11,554

 

11,313

 

7,957

 

46,604

 

29,833

    Tax-exempt

2,308

 

2,394

 

2,435

 

2,504

 

2,417

 

9,641

 

10,074

Loans held for sale

1,296

 

1,293

 

1,715

 

955

 

1,064

 

5,259

 

4,547

        Total interest revenue

178,850

 

163,158

 

159,290

 

152,195

 

132,276

 

653,493

 

512,991

                           

INTEREST EXPENSE:

                         

Interest bearing demand

10,191

 

8,113

 

6,075

 

5,278

 

3,645

 

29,657

 

13,117

Savings

1,367

 

1,087

 

667

 

584

 

517

 

3,705

 

1,966

Other time

6,967

 

5,399

 

4,862

 

4,457

 

3,853

 

21,685

 

14,979

Federal funds purchased and securities sold

                         

   under agreement to repurchase

2,563

 

2,071

 

1,898

 

1,341

 

930

 

7,873

 

2,515

Short-term and long-term debt

4,880

 

4,353

 

3,660

 

2,455

 

1,943

 

15,348

 

6,365

Junior subordinated debt

-

 

-

 

-

 

-

 

-

 

-

 

9

Other

1

 

-

 

-

 

2

 

2

 

3

 

4

        Total interest expense

25,969

 

21,023

 

17,162

 

14,117

 

10,890

 

78,271

 

38,955

                           

        Net interest revenue

152,881

 

142,135

 

142,128

 

138,078

 

121,386

 

575,222

 

474,036

  Provision for credit losses

1,000

 

-

 

2,500

 

1,000

 

500

 

4,500

 

3,000

        Net interest revenue, after provision for

                         

          credit losses

151,881

 

142,135

 

139,628

 

137,078

 

120,886

 

570,722

 

471,036

                           

NONINTEREST REVENUE:

                         

Mortgage banking

(3,275)

 

6,517

 

6,904

 

13,265

 

7,246

 

23,411

 

29,279

Credit card, debit card and merchant fees

9,941

 

9,857

 

10,530

 

9,564

 

9,530

 

39,892

 

37,344

Deposit service charges

11,699

 

11,278

 

10,767

 

10,901

 

10,257

 

44,645

 

40,040

Security gains, net

162

 

(54)

 

(2)

 

27

 

523

 

133

 

1,622

Insurance commissions

27,981

 

31,705

 

32,965

 

29,130

 

25,758

 

121,781

 

118,440

Wealth management

5,534

 

6,016

 

5,745

 

5,697

 

5,619

 

22,992

 

21,454

Other

6,989

 

6,297

 

5,547

 

10,350

 

4,141

 

29,183

 

19,854

        Total noninterest revenue

59,031

 

71,616

 

72,456

 

78,934

 

63,074

 

282,037

 

268,033

                           

NONINTEREST EXPENSE:

                         

Salaries and employee benefits

92,013

 

89,646

 

91,451

 

91,197

 

77,268

 

364,307

 

319,044

Occupancy, net of rental income

12,107

 

11,690

 

11,103

 

10,804

 

10,064

 

45,704

 

41,164

Equipment

3,837

 

3,994

 

3,804

 

3,754

 

3,710

 

15,389

 

14,068

Deposit insurance assessments

1,866

 

2,954

 

3,129

 

2,360

 

2,659

 

10,309

 

9,903

Other

42,519

 

34,125

 

35,695

 

39,586

 

32,180

 

151,925

 

123,267

        Total noninterest expense

152,342

 

142,409

 

145,182

 

147,701

 

125,881

 

587,634

 

507,446

        Income before income taxes

58,570

 

71,342

 

66,902

 

68,311

 

58,079

 

265,125

 

231,623

Income tax expense

11,473

 

4,659

 

12,856

 

14,820

 

20,556

 

43,808

 

78,590

        Net income

$    47,097

 

$   66,683

 

$     54,046

 

$    53,491

 

$   37,523

 

$ 221,317

 

$ 153,033

                           

Net income per share: Basic

$       0.47

 

$       0.68

 

$        0.55

 

$       0.54

 

$       0.42

 

$      2.24

 

$      1.67

                                  Diluted

$       0.47

 

$       0.67

 

$        0.55

 

$       0.54

 

$       0.41

 

$      2.23

 

$      1.67

                           

 

 

BancorpSouth Bank

 

Selected Loan Data

 

(Dollars in thousands)

 

(Unaudited)

 
                     
 

Quarter Ended

 
 

Dec-18

 

Sep-18

 

Jun-18

 

Mar-18

 

Dec-17

 

LOAN AND LEASE PORTFOLIO:

                   

Commercial and industrial

1,766,515

 

$   1,617,293

 

$   1,668,174

 

$    1,695,718

 

$  1,480,279

 

Real estate

                   

   Consumer mortgages

3,259,390

 

3,184,674

 

3,143,215

 

3,000,479

 

2,864,623

 

   Home equity

663,572

 

655,213

 

653,450

 

655,634

 

638,394

 

   Agricultural

318,038

 

315,842

 

315,828

 

313,470

 

243,449

 

   Commercial and industrial-owner occupied

2,267,902

 

2,157,177

 

2,147,176

 

2,102,493

 

1,846,085

 

   Construction, acquisition and development

1,286,786

 

1,103,532

 

1,346,370

 

1,377,153

 

1,153,187

 

   Commercial real estate

3,026,214

 

2,923,791

 

2,636,533

 

2,640,503

 

2,345,231

 

Credit cards

105,569

 

102,353

 

102,790

 

102,114

 

107,848

 

All other

418,163

 

390,120

 

404,578

 

409,285

 

377,338

 

     Total loans

$ 13,112,149

 

$ 12,449,995

 

$ 12,418,114

 

$  12,296,849

 

$ 11,056,434

 
                     

ALLOWANCE FOR CREDIT LOSSES:

                   

Balance, beginning of period

$     121,019

 

$      119,920

 

$     119,434

 

$       118,200

 

$     119,496

 
                     

Loans and leases charged-off:

                   

Commercial and industrial

(1,042)

 

(322)

 

(1,057)

 

(484)

 

(1,234)

 

Real estate

                   

   Consumer mortgages

(298)

 

(210)

 

(366)

 

(134)

 

(773)

 

   Home equity

(237)

 

(227)

 

(107)

 

(143)

 

(95)

 

   Agricultural

(6)

 

(6)

 

(6)

 

(12)

 

(5)

 

   Commercial and industrial-owner occupied

(237)

 

(315)

 

(279)

 

(41)

 

(720)

 

   Construction, acquisition and development

(142)

 

(41)

 

(66)

 

(163)

 

(206)

 

   Commercial real estate

(594)

 

-

 

(946)

 

(35)

 

(159)

 

Credit cards

(816)

 

(596)

 

(830)

 

(794)

 

(849)

 

All other

(761)

 

(941)

 

(551)

 

(725)

 

(627)

 

     Total loans charged-off

(4,133)

 

(2,658)

 

(4,208)

 

(2,531)

 

(4,668)

 
                     

Recoveries:

                   

Commercial and industrial

504

 

1,558

 

684

 

372

 

599

 

Real estate

                   

   Consumer mortgages

419

 

522

 

361

 

95

 

755

 

   Home equity

86

 

58

 

72

 

333

 

69

 

   Agricultural

304

 

20

 

10

 

79

 

7

 

   Commercial and industrial-owner occupied

40

 

413

 

46

 

80

 

391

 

   Construction, acquisition and development

197

 

564

 

308

 

1,262

 

483

 

   Commercial real estate

139

 

200

 

149

 

53

 

98

 

Credit cards

245

 

198

 

367

 

220

 

218

 

All other

250

 

224

 

197

 

271

 

252

 

     Total recoveries

2,184

 

3,757

 

2,194

 

2,765

 

2,872

 
                     

Net (charge-offs) recoveries 

(1,949)

 

1,099

 

(2,014)

 

234

 

(1,796)

 
                     

Provision charged to operating expense

1,000

 

-

 

2,500

 

1,000

 

500

 

Balance, end of period

$     120,070

 

$      121,019

 

$     119,920

 

$       119,434

 

$     118,200

 
                     

Average loans for period

$ 13,063,422

 

$ 12,433,701

 

$ 12,334,756

 

$ 12,084,020

 

$ 11,010,187

 
                     

Ratio:

                   

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

0.06%

 

(0.04%)

 

0.07%

 

(0.01%)

 

0.06%

 
                     

 

 

BancorpSouth Bank

Selected Loan Data

(Dollars in thousands)

(Unaudited)

                   
 

Quarter Ended

 

Dec-18

 

Sep-18

 

Jun-18

 

Mar-18

 

Dec-17

NON-PERFORMING ASSETS

                 

NON-PERFORMING LOANS AND LEASES:

                 

  Nonaccrual Loans and Leases

                 

    Commercial and industrial

$    10,537

 

$       11,158

 

$       11,090

 

$    11,122

 

$       10,178

    Real estate

                 

       Consumer mortgages

23,932

 

23,015

 

22,588

 

26,832

 

22,988

       Home equity

2,686

 

2,349

 

2,446

 

2,587

 

2,956

       Agricultural

4,617

 

1,603

 

1,536

 

6,225

 

6,160

       Commercial and industrial-owner occupied

8,637

 

7,927

 

12,275

 

12,210

 

12,585

       Construction, acquisition and development

3,124

 

1,410

 

1,563

 

2,223

 

2,197

       Commercial real estate

16,590

 

7,787

 

8,265

 

3,597

 

4,318

    Credit cards

173

 

120

 

104

 

136

 

74

    All other

259

 

163

 

178

 

371

 

435

         Total nonaccrual loans and leases

$    70,555

 

$       55,532

 

$       60,045

 

$    65,303

 

$       61,891

                   

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

18,695

 

2,934

 

6,335

 

6,519

 

8,503

  Restructured Loans and Leases, Still Accruing

7,498

 

7,564

 

6,982

 

9,681

 

8,060

     Total non-performing loans and leases*

$    96,748

 

$       66,030

 

$       73,362

 

$    81,503

 

$       78,454

                   

OTHER REAL ESTATE OWNED:

9,276

 

4,301

 

7,828

 

9,362

 

6,038

                   

Total Non-performing Assets*

$  106,024

 

$       70,331

 

$       81,190

 

$    90,865

 

$       84,492

                   

  BXS originated assets

$    72,527

 

$       66,062

 

$       75,980

 

$    84,586

 

$       84,492

  Assets acquired during 2018*

33,497

 

4,269

 

5,210

 

6,279

 

-

Total Non-performing Assets*

$  106,024

 

$       70,331

 

$       81,190

 

$    90,865

 

$       84,492

                   

Additions to Nonaccrual Loans and Leases During the Quarter

$    28,572

 

$       12,217

 

$       16,902

 

$    16,641

 

$       20,799

                   

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

                 

    BXS originated loans

$    43,922

 

$       33,093

 

$       27,225

 

$    29,422

 

$       25,162

    Loans acquired during 2018

9,769

 

11,294

 

11,810

 

3,425

 

-

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

$    53,691

 

$       44,387

 

$       39,035

 

$    32,847

 

$       25,162

                   

Credit Quality Ratios:

                 

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

0.03%

 

0.00%

 

0.08%

 

0.03%

 

0.02%

Allowance for credit losses to net loans and leases

0.92%

 

0.97%

 

0.97%

 

0.97%

 

1.07%

Allowance for credit losses to non-performing loans and leases

124.11%

 

183.28%

 

163.46%

 

146.54%

 

150.66%

Allowance for credit losses to non-performing assets

113.25%

 

172.07%

 

147.70%

 

131.44%

 

139.89%

Non-performing loans and leases to net loans and leases

0.74%

 

0.53%

 

0.59%

 

0.66%

 

0.71%

Non-performing assets to net loans and leases

0.81%

 

0.56%

 

0.65%

 

0.74%

 

0.76%

                   
                   

* Included within these totals are certain acquired loans for which $7.0 million was held in escrow as of December 31, 2018 to cover potential losses related to the resolution of these credits.

 

 

BancorpSouth Bank

       

Selected Loan Data

       

(Dollars in thousands)

       

(Unaudited)

       
                   
 

December 31, 2018

   

Special

       

Purchased

   
 

Pass

Mention

Substandard

Doubtful

Loss

Impaired

Credit Impaired

 

Total

LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE:

                 

Commercial and industrial

$   1,700,639

$                -

$       50,174

$        361

$                -

$    5,263

$        10,078

 

$   1,766,515

Real estate

                 

   Consumer mortgages

3,197,333

-

57,660

383

-

3,560

454

 

3,259,390

   Home equity

656,435

-

6,911

-

-

226

-

 

663,572

   Agricultural

303,035

-

12,248

-

-

184

2,571

 

318,038

   Commercial and industrial-owner occupied

2,181,778

-

77,941

-

-

3,551

4,632

 

2,267,902

   Construction, acquisition and development

1,248,823

-

32,021

-

-

-

5,942

 

1,286,786

   Commercial real estate

2,944,036

-

68,615

-

-

13,563

-

 

3,026,214

Credit cards

105,569

-

-

-

-

-

-

 

105,569

All other

412,095

-

6,068

-

-

-

-

 

418,163

     Total loans

$  12,749,743

$               -

$      311,638

$        744

$               -

$  26,347

$        23,677

 

$ 13,112,149

                   

  BXS originated loans

$  11,415,919

$               -

$      230,627

$        744

$               -

$  26,347

$                  -

 

$ 11,673,637

  Loans acquired during 2018

1,333,824

-

81,011

-

-

-

23,677

 

1,438,512

     Total Loans

$  12,749,743

$               -

$      311,638

$        744

$               -

$  26,347

$        23,677

 

$ 13,112,149

                   
 

September 30, 2018

   

Special

       

Purchased

   
 

Pass

Mention

Substandard

Doubtful

Loss

Impaired

Credit Impaired

 

Total

LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE:

                 

Commercial and industrial

$   1,559,723

$                -

$       52,855

$        802

$                -

$    3,912

$                1

 

$   1,617,293

Real estate

                 

   Consumer mortgages

3,127,420

-

53,310

384

-

3,560

-

 

3,184,674

   Home equity

648,216

-

6,767

-

-

230

-

 

655,213

   Agricultural

302,645

-

9,775

-

-

228

3,194

 

315,842

   Commercial and industrial-owner occupied

2,094,604

-

56,949

-

-

3,715

1,909

 

2,157,177

   Construction, acquisition and development

1,083,200

1,000

19,328

-

-

-

4

 

1,103,532

   Commercial real estate

2,864,040

-

53,870

-

-

5,881

-

 

2,923,791

Credit cards

102,353

-

-

-

-

-

-

 

102,353

All other

379,358

-

10,762

-

-

-

-

 

390,120

     Total loans

$ 12,161,559

$         1,000

$      263,616

$      1,186

$              -

$  17,526

$          5,108

 

$  12,449,995

                   

  BXS originated loans

$ 11,257,934

$         1,000

$      241,974

$      1,186

$              -

$  17,526

$                  -

 

$  11,519,620

  Loans acquired during 2018

903,625

-

21,642

-

-

-

5,108

 

930,375

     Total Loans

$ 12,161,559

$         1,000

$      263,616

$      1,186

$              -

$  17,526

$          5,108

 

$ 12,449,995

 

 

BancorpSouth Bank

Geographical Information

(Dollars in thousands)

(Unaudited)

                   
 

December 31, 2018

 

Alabama

               
 

and Florida

               
 

Panhandle

Arkansas

Louisiana

Mississippi

Missouri

Tennessee

Texas

Other

Total

LOAN AND LEASE PORTFOLIO:

                 

Commercial and industrial

111,219

145,758

285,914

585,275

69,131

97,714

446,526

24,978

$   1,766,515

Real estate

                 

   Consumer mortgages

459,465

338,353

332,949

887,085

95,506

321,512

757,699

66,821

3,259,390

   Home equity

100,688

48,294

91,643

235,479

19,582

143,441

22,619

1,826

663,572

   Agricultural

8,920

84,701

36,401

71,684

6,236

12,018

98,078

-

318,038

   Commercial and industrial-owner occupied

210,101

211,584

338,618

761,713

48,734

151,633

545,519

-

2,267,902

   Construction, acquisition and development

108,244

57,812

88,962

258,580

15,542

179,925

577,721

-

1,286,786

   Commercial real estate

293,564

359,435

361,781

616,918

202,603

205,689

986,224

-

3,026,214

Credit cards

-

-

-

-

-

-

-

105,569

105,569

All other

46,177

39,641

27,568

181,008

2,802

19,130

96,264

5,573

418,163

     Total loans

$ 1,338,378

$ 1,285,578

$ 1,563,836

$ 3,597,742

$    460,136

$ 1,131,062

$ 3,530,650

$    204,767

$ 13,112,149

                   

NON-PERFORMING LOANS AND LEASES:

                 

Commercial and industrial

404

282

1,341

3,161

735

973

15,067

258

$       22,221

Real estate

                 

   Consumer mortgages

2,367

3,406

5,744

11,827

551

2,293

4,069

68

30,325

   Home equity

443

85

470

801

229

708

48

-

2,784

   Agricultural

50

703

5

284

-

-

3,887

-

4,929

   Commercial and industrial-owner occupied

37

928

1,502

3,495

140

904

6,797

-

13,803

   Construction, acquisition and development

102

412

102

741

-

-

2,080

-

3,437

   Commercial real estate

160

369

6,712

1,479

-

-

9,010

-

17,730

Credit cards

-

-

-

-

-

-

-

1,101

1,101

All other

-

148

1

44

-

178

47

-

418

     Total loans

$       3,563

$       6,333

$      15,877

$     21,832

$       1,655

$       5,056

$      41,005

$       1,427

$       96,748

                   

NON-PERFORMING LOANS AND LEASES

                 

   AS A PERCENTAGE OF OUTSTANDING:

                 

Commercial and industrial

0.36%

0.19%

0.47%

0.54%

1.06%

1.00%

3.37%

1.03%

1.26%

Real estate

                 

   Consumer mortgages

0.52%

1.01%

1.73%

1.33%

0.58%

0.71%

0.54%

0.10%

0.93%

   Home equity

0.44%

0.18%

0.51%

0.34%

1.17%

0.49%

0.21%

0.00%

0.42%

   Agricultural

0.56%

0.83%

0.01%

0.40%

0.00%

0.00%

3.96%

N/A

1.55%

   Commercial and industrial-owner occupied

0.02%

0.44%

0.44%

0.46%

0.29%

0.60%

1.25%

N/A

0.61%

   Construction, acquisition and development

0.09%

0.71%

0.11%

0.29%

0.00%

0.00%

0.36%

N/A

0.27%

   Commercial real estate

0.05%

0.10%

1.86%

0.24%

0.00%

0.00%

0.91%

N/A

0.59%

Credit cards

N/A

N/A

N/A

N/A

N/A

N/A

N/A

1.04%

1.04%

All other

0.00%

0.37%

0.00%

0.02%

0.00%

0.93%

0.05%

0.00%

0.10%

     Total loans

0.27%

0.49%

1.02%

0.61%

0.36%

0.45%

1.16%

0.70%

0.74%

                   

 

 

BancorpSouth Bank

 

Acquired Loan Information

 

(Dollars in thousands)

 

(Unaudited)

 
         
         
 

Quarter Ended December 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

$              830,831

$                  5,108

$       835,939

 

Fair value of loans acquired during the period

610,392

19,018

629,410

 

Changes in acquired loans

(149,144)

(449)

(149,593)

 

Net book value of acquired loans at end of period

$            1,292,079

$                23,677

$     1,315,756

 
         
         

Loan mark on acquired loans at beginning of period

$                (9,414)

$                (3,954)

$        (13,368)

 

Loan mark recorded on loans acquired during the period

(10,437)

(12,705)

(23,142)

 

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

-

545

545

 

Net accretion recognized on acquired loans

3,566

524

4,090

 

Remaining loan mark on acquired loans*

$               (16,285)

$              (15,590)

$        (31,875)

 
         
 

Quarter Ended September 30, 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

$              919,712

$                 6,220

$       925,932

 

Fair value of loans acquired during the period

-

-

-

 

Changes in acquired loans

(88,881)

(1,112)

(89,993)

 

Net book value of acquired loans at end of period

$              830,831

$                 5,108

$       835,939

 
         
         

Loan mark on acquired loans at beginning of period

$               (10,824)

$                (4,725)

$        (15,549)

 

Loan mark recorded on loans acquired during the period

-

-

-

 

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

-

-

-

 

Net accretion recognized on acquired loans

1,410

771

2,181

 

Remaining loan mark on acquired loans

$                 (9,414)

$                (3,954)

$        (13,368)

 
         
         
 

Quarter Ended

Quarter Ended

Quarter Ended

 
 

12/31/2018

9/30/2018

6/30/2018

 

Loan yield, as reported

4.94%

4.72%

4.67%

 
         

Loan yield, excluding net accretion on acquired loans

4.83%

4.64%

4.57%

 
         

Net interest margin, as reported

3.80%

3.67%

3.71%

 
         

Net interest margin, excluding net accretion on acquired loans 

3.71%

3.62%

3.63%

 
         
         

Certain balances within the Acquired Loan Information have been adjusted for prior periods to reflect changes made to loans accounted for under ASC
310-30 during the measurement period. These changes may result in certain balances not agreeing to other prior period information presented within this
press release.

 
     
     

* The remaining loan mark shown above for loans accounted for under ASC 310-30 includes $895 thousand in accretable yield as of December 31,
2018 compared to $357 thousand in accretable yield as of September 30, 2018. In addition, the same loans include $14.7 million in nonaccretable
difference as of December 31, 2018 compared to $3.6 million as of September 30, 2018.

 

 

 

BancorpSouth Bank

       

Noninterest Revenue and Expense

       

(Dollars in thousands)

       

(Unaudited)

       
                           
 

Quarter Ended

 

Year to Date

 

Dec-18

 

Sep-18

 

Jun-18

 

Mar-18

 

Dec-17

 

Dec-18

 

Dec-17

NONINTEREST REVENUE:

                         

Mortgage banking excl. MSR and MSR Hedge market value adj

$      4,789

 

$         5,045

 

$         7,105

 

$      7,732

 

$         4,868

 

$  24,671

 

$  27,522

MSR and MSR Hedge market value adjustment

(8,064)

 

1,472

 

(201)

 

5,533

 

2,378

 

(1,260)

 

1,757

Credit card, debit card and merchant fees

9,941

 

9,857

 

10,530

 

9,564

 

9,530

 

39,892

 

37,344

Deposit service charges

11,699

 

11,278

 

10,767

 

10,901

 

10,257

 

44,645

 

40,040

Securities gains, net

162

 

(54)

 

(2)

 

27

 

523

 

133

 

1,622

Insurance commissions

27,981

 

31,705

 

32,965

 

29,130

 

25,758

 

121,781

 

118,440

Trust income

3,681

 

3,742

 

3,850

 

3,848

 

3,985

 

15,121

 

15,028

Annuity fees

218

 

276

 

357

 

297

 

216

 

1,148

 

1,075

Brokerage commissions and fees

1,635

 

1,998

 

1,538

 

1,552

 

1,418

 

6,723

 

5,351

Bank-owned life insurance

3,636

 

2,842

 

3,259

 

1,947

 

1,732

 

11,684

 

7,811

Other miscellaneous income

3,353

 

3,455

 

2,288

 

8,403

 

2,409

 

17,499

 

12,043

     Total noninterest revenue

$    59,031

 

$       71,616

 

$       72,456

 

$    78,934

 

$       63,074

 

$ 282,037

 

$ 268,033

                           

NONINTEREST EXPENSE:

                         

Salaries and employee benefits

$    92,013

 

$       89,646

 

$       91,451

 

$    91,197

 

$       77,268

 

$ 364,307

 

$ 319,044

Occupancy, net of rental income

12,107

 

11,690

 

11,103

 

10,804

 

10,064

 

45,704

 

41,164

Equipment

3,837

 

3,994

 

3,804

 

3,754

 

3,710

 

15,389

 

14,068

Deposit insurance assessments

1,866

 

2,954

 

3,129

 

2,360

 

2,659

 

10,309

 

9,903

Advertising

1,440

 

1,522

 

1,226

 

855

 

1,671

 

5,043

 

4,556

Foreclosed property expense

1,113

 

920

 

997

 

366

 

1,035

 

3,396

 

3,492

Telecommunications

1,364

 

1,318

 

1,327

 

1,217

 

1,219

 

5,226

 

4,791

Public relations

834

 

795

 

829

 

794

 

705

 

3,252

 

2,754

Data processing

8,231

 

8,113

 

7,970

 

7,360

 

6,855

 

31,674

 

27,650

Computer software

3,840

 

3,652

 

3,624

 

3,336

 

3,172

 

14,452

 

12,140

Amortization of intangibles

2,040

 

1,438

 

1,559

 

1,602

 

979

 

6,639

 

4,013

Legal

1,082

 

657

 

1,568

 

691

 

1,326

 

3,998

 

4,901

Merger expense

4,456

 

942

 

1,911

 

5,727

 

688

 

13,036

 

688

Postage and shipping

1,214

 

1,238

 

1,151

 

1,237

 

1,092

 

4,840

 

4,397

Other miscellaneous expense

16,905

 

13,530

 

13,533

 

16,401

 

13,438

 

60,369

 

53,885

     Total noninterest expense

$  152,342

 

$      142,409

 

$      145,182

 

$  147,701

 

$      125,881

 

$ 587,634

 

$ 507,446

                           

INSURANCE COMMISSIONS:

                         

Property and casualty commissions

$    19,242

 

$       21,907

 

$       23,041

 

$    20,100

 

$       18,667

 

$  84,290

 

$  81,871

Life and health commissions

5,892

 

6,162

 

6,753

 

5,943

 

5,900

 

24,750

 

25,122

Risk management income

558

 

635

 

605

 

750

 

608

 

2,548

 

2,559

Other

2,289

 

3,001

 

2,566

 

2,337

 

583

 

10,193

 

8,888

     Total insurance commissions

$    27,981

 

$       31,705

 

$       32,965

 

$    29,130

 

$       25,758

 

$ 121,781

 

$ 118,440

 

 

BancorpSouth Bank

Selected Additional Information

(Dollars in thousands)

(Unaudited)

           
 

Quarter Ended

 

Dec-18

Sep-18

Jun-18

Mar-18

Dec-17

MORTGAGE SERVICING RIGHTS:

         

Fair value, beginning of period

$      77,796

$       75,614

$       75,206

$      69,190

$       66,417

Additions to mortgage servicing rights:

         

   Originations of servicing assets

2,840

3,520

3,516

2,683

3,011

Changes in fair value:

         

   Due to payoffs/paydowns

(2,465)

(2,984)

(2,916)

(2,382)

(2,659)

   Due to change in valuation inputs or

         

     assumptions used in the valuation model

(8,348)

1,646

(191)

5,716

2,422

   Other changes in fair value

(1)

-

(1)

(1)

(1)

Fair value, end of period

$      69,822

$       77,796

$       75,614

$      75,206

$       69,190

           

MORTGAGE BANKING REVENUE:

         

Production revenue:

         

   Origination

$       2,207

$         3,161

$         5,295

$       5,239

$         2,824

   Servicing

5,047

4,868

4,726

4,875

4,703

   Payoffs/Paydowns

(2,465)

(2,984)

(2,916)

(2,382)

(2,659)

     Total production revenue

4,789

5,045

7,105

7,732

4,868

Market value adjustment on MSR

(8,348)

1,646

(191)

5,716

2,422

Market value adjustment on MSR Hedge

284

(174)

(10)

(183)

(44)

Total mortgage banking revenue

$       5,073

$         6,517

$         6,904

$      13,265

$         7,246

           
           
           

Mortgage loans serviced

$ 6,686,475

$   6,628,445

$   6,579,444

$ 6,532,950

$   6,533,642

MSR/mtg loans serviced

1.04%

1.17%

1.15%

1.15%

1.06%

           

AVAILABLE-FOR-SALE SECURITIES, at fair value

         

U.S. Government agencies

$ 2,200,158

$   2,260,949

$   2,235,238

$ 2,385,962

$   2,214,995

U.S. Government agency issued residential

         

   mortgage-back securities

136,846

138,624

141,443

139,148

148,548

U.S. Government agency issued commercial

         

   mortgage-back securities

107,841

107,506

122,974

124,041

122,068

Obligations of states and political subdivisions

304,343

319,280

329,099

340,616

312,931

Total available-for-sale securities

$ 2,749,188

$   2,826,359

$   2,828,754

$ 2,989,767

$   2,798,542

           

 

 

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

 

Year to Date

     

12/31/2018

 

9/30/2018

 

6/30/2018

 

3/31/2018

 

12/31/2017

 

12/31/2018

 

12/31/2017

                               

Net income

 

$      47,097

 

$   66,683

 

$          54,046

 

$          53,491

 

$          37,523

 

$         221,317

 

$       153,033

Plus:

Merger expense, net of tax

 

3,345

 

707

 

1,434

 

4,298

 

427

 

9,784

 

427

 

Tax-related matters

 

-

 

-

 

-

 

-

 

623

 

-

 

623

Less:

Security (losses)/gains, net of tax

 

122

 

(40)

 

(2)

 

20

 

325

 

100

 

1,006

 

Tax-related matters

 

-

 

11,288

 

-

 

-

 

-

 

11,288

 

-

Net operating income

 

$      50,320

 

$   56,142

 

$          55,482

 

$          57,769

 

$          38,248

 

$         219,713

 

$       153,077

                               

Less:

MSR market value adjustment, net of tax

 

(6,052)

 

1,103

 

(151)

 

4,153

 

1,476

 

(946)

 

1,091

Net operating income-excluding MSR

 

$      56,372

 

$   55,039

 

$          55,633

 

$          53,616

 

$          36,772

 

$         220,659

 

$       151,986

                               
                               

Reconciliation of Total Operating Expense to Total Noninterest Expense:

       
                               

Total noninterest expense

 

$    152,342

 

$ 142,409

 

$        145,182

 

$         147,701

 

$         125,881

 

$         587,634

 

$       507,446

Less:

Merger expense

 

4,456

 

942

 

1,911

 

5,727

 

688

 

13,036

 

688

Total operating expense

 

$    147,886

 

$ 141,467

 

$        143,271

 

$         141,974

 

$         125,193

 

$         574,598

 

$       506,758

 

 

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

 

Year to Date

     

12/31/2018

 

9/30/2018

 

6/30/2018

 

3/31/2018

 

12/31/2017

 

12/31/2018

 

12/31/2017

Tangible assets

                           

Total assets

 

$ 18,001,540

 

$  17,249,175

 

$  17,222,491

 

$ 17,185,772

 

$  15,298,518

 

$ 18,001,540

 

$ 15,298,518

Less:  

Goodwill

 

695,720

 

590,292

 

588,004

 

580,900

 

300,798

 

695,720

 

300,798

 

Other identifiable intangible assets

 

50,896

 

36,475

 

39,031

 

40,590

 

17,882

 

50,896

 

17,882

Total tangible assets

 

$ 17,254,924

 

$  16,622,408

 

$  16,595,456

 

$ 16,564,282

 

$  14,979,838

 

$ 17,254,924

 

$ 14,979,838

                               

Tangible shareholders' equity

                           

Total shareholders' equity

 

$   2,205,737

 

$    2,116,375

 

$    2,072,083

 

$   2,060,487

 

$    1,713,485

 

$   2,205,737

 

$   1,713,485

Less:

Goodwill

 

695,720

 

590,292

 

588,004

 

580,900

 

300,798

 

695,720

 

300,798

 

Other identifiable intangible assets

 

50,896

 

36,475

 

39,031

 

40,590

 

17,882

 

50,896

 

17,882

Total tangible shareholders' equity

 

$   1,459,121

 

$    1,489,608

 

$    1,445,048

 

$   1,438,997

 

$    1,394,805

 

$   1,459,121

 

$   1,394,805

                               

Total average assets

 

$ 17,879,081

 

$  17,059,865

 

$  17,094,283

 

$ 16,918,568

 

$  14,809,497

 

$ 17,240,092

 

$ 14,773,217

Total shares of common stock outstanding

 

99,797,271

 

98,525,516

 

98,700,509

 

99,636,779

 

90,312,378

 

99,797,271

 

90,312,378

Average shares outstanding-diluted

 

99,720,219

 

98,819,905

 

99,057,054

 

98,942,268

 

90,546,824

 

99,134,861

 

91,754,749

                               

Tangible shareholders' equity to tangible assets (1)

 

8.46%

 

8.96%

 

8.71%

 

8.69%

 

9.31%

 

8.46%

 

9.31%

Return on tangible equity (2)

 

12.81%

 

17.76%

 

15.00%

 

15.08%

 

10.67%

 

15.17%

 

10.97%

Operating return on tangible equity-excluding MSR (3)

 

15.33%

 

14.66%

 

15.44%

 

15.11%

 

10.46%

 

15.12%

 

10.90%

Operating return on average assets-excluding MSR (4)

 

1.25%

 

1.28%

 

1.31%

 

1.29%

 

0.99%

 

1.28%

 

1.03%

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

 

10.20%

 

10.45%

 

10.88%

 

10.80%

 

8.58%

 

10.57%

 

8.93%

Tangible book value per share (6)

 

$         14.62

 

$          15.12

 

$          14.64

 

$         14.44

 

$         15.44

 

$         14.62

 

$         15.44

Operating earnings per share (7)

 

$           0.51

 

$            0.57

 

$            0.56

 

$           0.58

 

$           0.42

 

$           2.22

 

$           1.67

Operating earnings per share-excluding MSR (8)

 

$           0.57

 

$            0.56

 

$            0.56

 

$           0.54

 

$           0.41

 

$           2.23

 

$           1.66

                               
                               

(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; Will Fisackerly, Senior Vice President and Director of Corporate Finance, 662/680-2475

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