BancorpSouth Announces First Quarter 2020 Financial Results

TUPELO, Miss., April 20, 2020 /PRNewswire/ -- BancorpSouth Bank (NYSE: BXS) (the "Company") today announced financial results for the quarter ended March 31, 2020.

Highlights for the first quarter of 2020 included:

  • Achieved quarterly net income available to common shareholders of $21.9 million, or $0.21 per diluted common share and net operating income available to common shareholders – excluding MSR – of $34.4 million, or $0.33 per diluted common share.
  • Recorded provision for credit losses of $46.0 million primarily as a result of the impact of the coronavirus ("COVID-19") pandemic on the economic factors included in the Company's allowance for credit losses methodology; implemented Accounting Standards Update 2016-13 "Financial Instruments – Credit Losses" ("CECL") effective January 1, 2020.
  • Generated $91.7 million in pre-tax pre-provision net revenue, or 1.74 percent of average assets on an annualized basis, which represents an increase from 1.63 percent for the first quarter of 2019 and an increase from 1.68 percent for the fourth quarter of 2019.
  • Mortgage production volume of $477.1 million contributed to mortgage production and servicing revenue of $20.6 million; earnings were negatively impacted by a pre-tax mortgage servicing rights ("MSR") valuation adjustment of $11.1 million.
  • Completed the acquisition of Texas First Bancshares, Inc., the parent company of Texas First State Bank, effective January 1, 2020, which added $185 million in loans and $370 million in deposits to the Company's Central Texas presence; merger-related expenses totaled $4.5 million for the quarter.
  • Repurchased 3.3 million shares of outstanding common stock at a weighted average price of $26.42 per share.
  • Maintained strong regulatory capital metrics; estimated total risk-based capital of 13.73 percent at March 31, 2020 compared to 11.55 percent at March 31, 2019.

"Our first quarter efforts were obviously largely focused on navigating the health, logistical and economic impacts of the COVID-19 pandemic," remarked Dan Rollins, Chairman and Chief Executive Officer.  "We have worked diligently to create an environment that protects the health and wellbeing of our teammates while also meeting the needs of our customers.  Although it is still too early to predict the ultimate impact of the pandemic on our customers and loan portfolio, particularly in light of the government stimulus programs, we recorded a provision for credit losses of $46.0 million for the quarter primarily as a result of the deterioration of economic factors included in our reserve methodology.  Otherwise, we continue to be pleased with our financial performance given the current operating environment.  We reported pre-tax pre-provision net revenue of $91.7 million for the quarter, or 1.74 percent of average assets on an annualized basis, which is actually an improvement over both the first and fourth quarters of 2019." 

"As we look more specifically at our first quarter performance, our mortgage team had a great quarter, generating $477 million in total production.  Refinance activity has historically helped our Company during periods of declining rates, and the first quarter was no different as mortgage production and servicing income totaled $20.6 million for the quarter.  The rate environment certainly had a negative impact on our net interest margin and we expect this trend to continue into the second quarter.  Finally, we deployed a portion of the $470 million in capital that we raised late last year through the closing of our merger with Texas First as well as the repurchase of 3.3 million shares of our common stock.  With that said, our regulatory capital metrics remain strong.  As of the end of the quarter, each ratio was in excess of 300 basis points above the regulatory prescribed 'well-capitalized' levels.   We will continue to monitor the stability of the economy very closely with respect to any potential future share repurchase activity."

The Company is a participant in the U.S. Small Business Association ("SBA") Preferred Lender Program.  The Company is actively assisting its customers to obtain the stimulus aid provided by the CARES Act, including the Paycheck Protection Program ("PPP").  The Company has received approval for and is currently in the process of funding approximately 8,500 loans totaling $1.0 billion under the PPP program.  The Company continues to take applications and is prepared to process them should additional funding be approved.  Rollins added, "When you look at our balance sheet composition and footprint, small businesses are at the core of who we are as a company.  They are critical to the economic success of the geographies we serve.  Our relationship officers, credit administrators, and operational support staff have worked tirelessly over the past few weeks to accomplish what seemed to be an insurmountable task.  The customer experience during this unprecedented time provides a real opportunity to broaden and deepen relationships."

Earnings Summary

The Company reported net income available to common shareholders of $21.9 million, or $0.21 per diluted common share, for the first quarter of 2020, compared with net income available to common shareholders of $51.6 million, or $0.52 per diluted common share, for the first quarter of 2019 and net income available to common shareholders of $65.8 million, or $0.63 per diluted common share, for the fourth quarter of 2019.  The Company reported net operating income available to common shareholders – excluding MSR – of $34.4 million, or $0.33 per diluted common share, for the first quarter of 2020, compared with $55.9 million, or $0.56 per diluted common share, for the first quarter of 2019 and $67.8 million, or $0.65 per diluted common share, for the fourth quarter of 2019. 

The Company reported pre-tax pre-provision net revenue of $91.7 million, or 1.74 percent of average assets on an annualized basis, compared to $72.5 million, or 1.63 percent of average assets on an annualized basis, for the first quarter of 2019 and $85.8 million, or 1.68 percent of average assets, for the fourth quarter of 2019.

Net Interest Revenue

Net interest revenue was $167.5 million for the first quarter of 2020, an increase of 9.8 percent from $152.6 million for the first quarter of 2019 and a decrease of 1.9 percent from $170.8 million for the fourth quarter of 2019.  The fully taxable equivalent net interest margin was 3.54 percent for the first quarter of 2020, compared with 3.86 percent for the first quarter of 2019 and 3.76 percent for the fourth quarter of 2019.  Yields on net loans and leases were 5.00 percent for the first quarter of 2020, compared with 5.09 percent for the first quarter of 2019 and 5.13 percent for the fourth quarter of 2019, while yields on total interest earning assets were 4.27 percent for the first quarter of 2020, compared with 4.57 percent for the first quarter of 2019 and 4.48 percent for the fourth quarter of 2019.  The net interest margin, excluding accretable yield, was 3.48 percent for the first quarter of 2020, compared with 3.74 percent for the first quarter of 2019 and 3.61 percent for the fourth quarter of 2019, while yields on net loans and leases, excluding accretable yield, were 4.93 percent for the first quarter of 2020, compared with 4.95 percent for both the first quarter of 2019 and the fourth quarter of 2019.  The average cost of deposits was 0.67 percent for the first quarter of 2020, compared with 0.63 percent for the first quarter of 2019 and 0.68 percent for the fourth quarter of 2019.

Balance Sheet Activity

Loans and leases, net of unearned income, increased $135.0 million during the first quarter of 2020.  Excluding acquired balances, loans decreased approximately $50.0 million for the first quarter of 2020.  Deposits increased $477.2 million during the first quarter of 2020.  Excluding acquired deposits, total deposits increased approximately $105.0 million during the first quarter of 2020, or 2.6 percent on an annualized basis.

Provision for Credit Losses and Allowance for Credit Losses

Earnings for the first quarter of 2020 reflect a provision for credit losses of $46.0 million, compared with a provision of $0.5 million for the first quarter of 2019 and no provision for the fourth quarter of 2019.  Net charge-offs for the first quarter of 2020 were $13.7 million, compared with net charge-offs of $4.1 million for the first quarter of 2019 and net recoveries of $2.2 million for the fourth quarter of 2019.  Of the $13.7 million in net charge-offs for the first quarter of 2020, $12.7 million were acquired loans that were previously recorded as purchased credit impaired prior to the adoption of CECL and were subsequently classified as purchase credit deteriorated loans.  The allowance for credit losses was $218.2 million, or 1.53 percent of net loans and leases, at March 31, 2020, compared with $116.5 million, or 0.89 percent of net loans and leases, at March 31, 2019, and $119.1 million, or 0.85 percent of net loans and leases, at December 31, 2019. 

The Company implemented CECL effective January 1, 2020.  The increase in the allowance for credit losses resulting from this implementation was $62.6 million.  Of this increase, $22.6 million was a result of the reclassification of non-accretable difference on previously purchased credit impaired loans that are now considered purchase credit deteriorated loans, while $40.0 million was the result primarily of the requirement of estimating credits losses over the life of the loan portfolio.  The adoption of this standard impacted the comparability of credit quality and coverage metrics to prior periods.

Total non-performing assets were $137.8 million, or 0.97 percent of net loans and leases, at March 31, 2020, compared with $97.0 million, or 0.74 percent of net loans and leases, at March 31, 2019, and $118.3 million, or 0.84 percent of net loans and leases, at December 31, 2019.  Other real estate owned was $9.2 million at March 31, 2020, compared with $9.7 million at March 31, 2019 and $6.7 million at December 31, 2019.

Noninterest Revenue

Noninterest revenue was $76.5 million for the first quarter of 2020, compared with $64.2 million for the first quarter of 2019 and $74.7 million for the fourth quarter of 2019.  These results include a negative MSR valuation adjustment of $11.1 million for the first quarter of 2020, compared with a negative MSR valuation adjustment of $4.9 million for the first quarter of 2019 and a positive MSR valuation adjustment of $3.2 million for the fourth quarter of 2019.  Valuation adjustments in the MSR asset are driven primarily by fluctuations in interest rates period over period.   

Mortgage production and servicing revenue was $20.6 million for the first quarter of 2020, compared with $6.9 million for both the first and fourth quarters of 2019.  Mortgage origination volume for the first quarter of 2020 was $477.1 million, compared with $291.7 million for the first quarter of 2019 and $504.9 million for the fourth quarter of 2019.  Of the total mortgage origination volume for the first quarter of 2020, $85.6 million was portfolio loans, compared with $54.1 million for the first quarter of 2019 and $106.4 million for the fourth quarter of 2019.

Credit card, debit card, and merchant fee revenue was $9.2 million for the first quarter of 2020, compared with $8.9 million for the first quarter of 2019 and $9.8 million for the fourth quarter of 2019.  Deposit service charge revenue was $11.7 million for the first quarter of 2020, compared with $10.8 million for the first quarter of 2019 and $12.2 million for the fourth quarter of 2019.  Wealth management revenue was $6.6 million for the first quarter of 2020, compared with $5.6 million for the first quarter of 2019 and $6.6 million for the fourth quarter of 2019.  Insurance commission revenue was $29.6 million for the first quarter of 2020, compared with $30.2 million for the first quarter of 2019 and $27.6 million for the fourth quarter of 2019.  Other noninterest revenue was $10.1 million for the first quarter of 2020, compared with $6.7 million for the first quarter of 2019 and $8.3 million for the fourth quarter of 2019.  Other noninterest revenue for the first quarter of 2020 included a $4.2 million gain associated with the sale of a book of business within the Company's insurance agency.

Noninterest Expense

Noninterest expense for the first quarter of 2020 was $168.0 million, compared with $150.0 million for the first quarter of 2019 and $162.4 million for the fourth quarter of 2019.  Salaries and employee benefits expense was $108.3 million for the first quarter of 2020, compared with $97.2 million for the first quarter of 2019 and $97.1 million for the fourth quarter of 2019.  Occupancy expense was $12.7 million for the first quarter of 2020, compared with $11.6 million for the first quarter of 2019 and $12.3 million for the fourth quarter of 2019.  Other noninterest expense was $40.8 million for the first quarter of 2020, compared with $34.6 million for the first quarter of 2019 and $46.0 million for the fourth quarter of 2019.  Additionally, merger-related expense for the first quarter of 2020 was $4.5 million, compared with merger-related expense of $0.9 million for the first quarter of 2019 and $5.8 million for the fourth quarter of 2019. 

Capital Management

The Company's ratio of shareholders' equity to assets was 12.75 percent at March 31, 2020, compared with 12.16 percent at March 31, 2019 and 12.75 percent at December 31, 2019.  The ratio of tangible common shareholders' equity to tangible assets was 7.99 percent at March 31, 2020, compared with 8.41 percent at March 31, 2019 and 8.09 percent at December 31, 2019.

In November 2019, the Company completed an underwritten public offering of $300.0 million aggregate principal amount of its 4.125 percent Fixed-to-Floating Rate Subordinated Notes due November 20, 2029 (the "Notes") and an underwritten public offering of $172.5 million  of its 5.50 percent Series A Non-Cumulative Perpetual Preferred Stock, par value $0.01 per share (the "Series A Preferred Stock"). For additional details regarding the terms of the Notes, including those related to interest rates and interest payment dates, redemption, seniority, and maturity, and the terms of the Series A Preferred Stock, including those related to dividends and dividend payment dates, redemption, seniority, and maturity, please refer to the offering circulars related to each offering that the Company filed with the Federal Deposit Insurance Corporation ("FDIC") on November 15, 2019.

During the first quarter of 2020, the Company repurchased 3,300,000 shares of its outstanding common stock at a weighted average price of $26.42 per share pursuant to its share repurchase program.  As of March 31, 2020, the Company had 4,700,000 remaining shares available for repurchase under its current share repurchase authorization which expires on December 31, 2020.

Estimated regulatory capital ratios at March 31, 2020 were calculated in accordance with the Basel III capital framework as well as the interagency interim final rule published on March 31, 2020 entitled "Revised Transition of the Current Expected Credit Losses Methodology for Allowances".  The Company is a "well capitalized" bank, as defined by federal regulations, at March 31, 2020, with Tier 1 risk-based capital of 11.11 percent and total risk-based capital of 13.73 percent, compared with required minimum levels of 8 percent and 10 percent, respectively, in order to qualify for "well capitalized" classification. 

Summary

Rollins concluded, "As we move forward, we believe our Company is well positioned to weather the economic effects of this pandemic.  We have worked diligently over the past several years to further diversify our loan portfolio and enhance our credit underwriting standards.  We are pleased with our regulatory capital ratios and other liquidity metrics, including additional off balance sheet funding availability.  Finally, we have a resilient team of professionals dedicated to serving our customers and communities as well as improving shareholder value."

TRANSACTIONS

Texas First Bancshares, Inc.

On January 1, 2020, the Company completed the merger with Texas First Bancshares, Inc., the parent company of Texas First State Bank, (collectively referred to as "Texas First"), pursuant to which Texas First was merged with and into the Company.  Texas First operated 6 full-service banking offices in the Waco, Texas and Killeen-Temple, Texas metropolitan statistical areas ("MSA").  As of January 1, 2020, Texas First collectively reported total assets of $396.9 million, total loans of $185.7 million and total deposits of $369.3 million.  Under the terms of the definitive merger agreement, the Company issued approximately 1,040,000 shares of the Company's common stock plus $13.0 million in cash for all outstanding shares of Texas First.  For more information regarding this transaction, see our Current Report on Form 8-K that was filed with the FDIC on January 2, 2020.  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.

Van Alstyne Financial Corporation & Summit Financial Enterprises, Inc.

On September 1, 2019, the Company completed the mergers with Van Alstyne Financial Corporation and its wholly owned subsidiary, Texas Star Bank (collectively referred to as "Texas Star"), pursuant to which Texas Star was merged with and into the Company, and with Summit Financial Enterprises, Inc. and its wholly owned subsidiary, Summit Bank (collectively referred to as "Summit"), pursuant to which Summit was merged with and into the Company.  Texas Star operated 7 full-service banking offices in Collin and Grayson counties in Texas, and one loan production office in Durant, Oklahoma, while Summit operated 4 offices located in Panama City, Panama City Beach, Fort Walton Beach, and Pensacola, Florida.  As of September 1, 2019, Texas Star and Summit collectively reported total assets of $805.2 million, total loans of $610.2 million and total deposits of $794.2 million.  Under the terms of the definitive merger agreements, the Company issued approximately 4,600,000 shares of the Company's common stock plus $48.2 million in cash for all outstanding shares of both institutions.  For more information regarding these transactions, see our Current Report on Form 8-K that was filed with the FDIC on September 3, 2019.  The purchase accounting for these transactions 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.

Casey Bancorp, Inc. & Merchants Trust, Inc.

On April 1, 2019, the Company completed the mergers with Casey Bancorp, Inc. and its wholly owned subsidiary, Grand Bank of Texas (collectively referred to as "Grand Bank"), pursuant to which Grand Bank was merged with and into the Company, and with Merchants Trust, Inc. and its wholly owned subsidiary, Merchants Bank (collectively referred to as "Merchants"), pursuant to which Merchants was merged with and into the Company.  Grand Bank operated 4 full-service banking offices in the cities of Dallas, Grand Prairie, Horseshoe Bay and Marble Falls, all in Texas, while Merchants, which was based in Jackson, Alabama, operated 6 full-service banking offices in Clarke and Mobile counties in Alabama.  As of April 1, 2019, Grand Bank and Merchants collectively reported total assets of $566.0 million, total loans of $415.0 million and total deposits of $529.0 million.  Under the terms of the definitive merger agreements, the Company issued approximately 2,225,000 shares of the Company's common stock plus $24.2 million in cash for all outstanding shares of both institutions.  For more information regarding these transactions, see our Current Report on Form 8-K that was filed with the FDIC on April 1, 2019. 

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 24 of this news release.

Statement Regarding Impact of COVID-19 Pandemic

The Company prioritizes the health and safety of its teammates and customers, and it will continue to do so throughout the duration of the pandemic.  At the same time, the Company remains focused on improving shareholder value, managing credit exposure, challenging expenses, enhancing the customer experience and supporting the communities it serves. Lastly, as an SBA Preferred Lender, the Company is actively participating in the SBA's Paycheck Protection Program for the betterment of its customers and the communities that it serves.

In this news release, the Company has sought to describe the historical and future impact of the COVID-19 pandemic on the Company's assets, business, cash flows, financial condition, liquidity, prospects and results of operations, including the discussions regarding the increases in its provision and allowance for credit losses and the discussion regarding negative pressure to its net interest revenue and net interest margin.  Although the Company believes that the statements that pertain to future events, results and trends and their impact on the Company's business are reasonable at the present time, those statements are not historical facts and are based upon current assumptions, expectations, estimates and projections, many of which, by their nature, are beyond the Company's control.  Accordingly, all discussions regarding future events, results and trends and their impact on the Company's business, even in the near term, are necessarily uncertain given the fluid and evolving nature of the pandemic.

If the health, logistical or economic effects of the pandemic worsen, or if the assumptions, expectations, estimates or projections that underlie the Company's statements regarding future effects or trends prove to be incorrect, then the Company's actual assets, business, cash flows, financial condition, liquidity, prospects and results of operations may be materially and adversely impacted in ways that the Company cannot reasonably forecast.

Accordingly, when reading this news release, undue reliance should not be placed upon any statement pertaining to future events, results and trends and their impact on the Company's business in future periods.

Conference Call and Webcast

The Company will conduct a conference call to discuss its first quarter 2020 financial results on April 21, 2020, at 10:00 a.m. (Central Time).  This conference call will be an interactive session between management and analysts. 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 $21 billion in assets.  BancorpSouth operates approximately 310 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 made in this news release are not statements of historical fact and constitute "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbor created under the Private Securities Litigation Reform Act of 1995.  These statements are often, but not always, made through the use of words or phrases such as "may," "should," "could," "predict," "potential," "believe," "will likely result," "expect," "continue," "will," "anticipate," "seek," "aspire," "roadmap," "achieve," "estimate," "intend," "plan," "project," "projection," "forecast," "goal," "target," "would," and "outlook," or the negative version of those words or other comparable words of a future or forward-looking nature. These forward-looking statements include, without limitation, those relating to the impact of the COVID-19 pandemic on the Company's assets, business, cash flows, financial condition, liquidity, prospects and results of operations, the benefits, costs, synergies and financial and operational impact of the Texas First merger on the Company, the acceptance by customers of Texas First of the Company's products and services after the closing of the merger, 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 ability to pay dividends or coupons on Series A Preferred Stock or the Notes or its ability to ultimately repay the Notes or otherwise comply with the terms of such instruments, amortization expense for intangible assets, goodwill impairments, loan impairments, utilization of appraisals and inspections for real estate loans, maturity, renewal or extension of construction, acquisition and development loans, net interest revenue and net interest margin, 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, the ability of the Company to access successfully the capital and credit markets when needed or as desired, sources of funding, 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, and the impact of certain claims and ongoing, pending or threatened litigation, administrative and investigatory matters.

These forward-looking statements are not historical facts, and are based upon current expectations, estimates and projections about the Company's industry, management's beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain, involve risk and are beyond the Company's control. The inclusion of these forward-looking statements should not be regarded as a representation by the Company or any other person that such expectations, estimates and projections will be achieved. Accordingly, the Company cautions that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict and that are beyond the Company's control. These risks, assumptions and uncertainties may include, but are not limited to, the impact of the COVID-19 pandemic on the Company's assets, business, cash flows, financial condition, liquidity, prospects and results of operations, increases in the provision and allowance for credit losses and interest rate pressure on net interest revenue and net interest margin, 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 ability of the Company to meet expectations regarding the benefits, costs, synergies, and financial and operational impact of the Texas First merger, the possibility that any of the anticipated benefits, costs, synergies and financial and operational improvements of the Texas First merger will not be realized or will not be realized as expected, the ability of the Company and Texas First to meet expectations regarding the accounting and tax treatments of the Texas First merger, the possibility that any of the anticipated benefits of the Texas First merger will not be realized or will not be realized as expected, the lack of availability of the Company's filings mandated by the Exchange Act from the Securities and Exchange Commission'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 Wall Street Reform and Consumer Protection Act, and supervision of the Company's operations, the short-term and long-term impact of changes to banking capital standards on the Company's regulatory capital and liquidity, the impact of regulations on service charges on the Company's core deposit accounts, the susceptibility of the Company's business to local economic and environmental conditions, the soundness of other financial institutions, changes in interest rates, the impact of monetary policies and economic factors on the Company's ability to attract deposits or make loans, volatility in capital and credit markets, reputational risk, the impact of the loss of any key Company personnel, the impact of hurricanes or other adverse weather events, any requirement that the Company write down goodwill or other intangible assets, diversification in the types of financial services the Company offers, the growth of the Company's insurance business and commission revenue, the growth of the Company's loan, deposit and fee revenue sources, the Company's ability to adapt its products and services to evolving industry standards and consumer preferences, competition with other financial services companies, risks in connection with completed or potential acquisitions, 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 capital 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.

The foregoing factors should not be construed as exhaustive and should be read in conjunction with those factors that are set forth from time to time in our periodic and current reports filed with the FDIC, including those factors included in our Annual Report on Form 10-K for the year ended December 31, 2019 under the heading "Item 1A. Risk Factors," in our Quarterly Reports on Form 10-Q and in our Current Reports on Form 8-K.

Although the Company believes that the expectations reflected in these forward-looking statements are reasonable as of the date of this news release, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. If one or more events related to these or other risks or uncertainties materialize, or if the Company's underlying assumptions prove to be incorrect, actual results may differ materially from the Company's forward-looking statements.  Accordingly, undue reliance should not be placed on any such forward-looking statements. Any forward-looking statement speaks only as of the date of this news release, and the Company does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.  New risks and uncertainties may emerge from time to time, and it is not possible for the Company to predict their occurrence or how they will affect the Company.

BancorpSouth Bank

Selected Financial Information

(Dollars in thousands, except per share data)

(Unaudited)

           
           
 

Quarter Ended

Quarter Ended

Quarter Ended

Quarter Ended

Quarter Ended

 

3/31/2020

12/31/2019

9/30/2019

6/30/2019

3/31/2019

Earnings Summary:

         

Interest revenue

$                    202,064

$                    203,812

$                    199,004

$                    191,063

$                    181,133

Interest expense

34,534

33,038

32,405

31,046

28,579

Net interest revenue

167,530

170,774

166,599

160,017

152,554

Provision for credit losses

46,000

-

500

500

500

Net interest revenue, after provision

         

   for credit losses

121,530

170,774

166,099

159,517

152,054

Noninterest revenue

76,496

74,697

75,432

66,332

64,220

Noninterest expense

168,006

162,351

159,614

157,674

149,968

Income before income taxes

30,020

83,120

81,917

68,175

66,306

Income tax expense

5,759

17,271

18,160

15,118

14,708

Net income

$                      24,261

$                      65,849

$                      63,757

$                      53,057

$                      51,598

Less: Preferred dividends

2,372

-

-

-

-

Net income available to common shareholders

$                      21,889

$                      65,849

$                      63,757

$                      53,057

$                      51,598

           

Balance Sheet - Period End Balances

         

Total assets

$               21,032,524

$               21,052,576

$               19,850,225

$               18,936,814

$               18,314,183

Total earning assets

18,939,750

18,891,021

17,619,053

16,948,009

16,426,872

Total securities

4,468,340

4,481,974

2,766,446

2,760,732

2,692,499

Loans and leases, net of unearned income

14,224,645

14,089,683

14,120,783

13,658,527

13,071,059

Allowance for credit losses

218,199

119,066

116,908

115,691

116,499

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

1,661,329

1,628,265

1,845,056

1,421,303

1,191,673

Remaining loan mark on acquired loans

22,286

46,240

53,137

38,408

30,782

Total deposits

16,887,916

16,410,699

16,025,756

15,136,648

14,692,609

Long-term debt

4,721

5,053

5,161

5,271

5,503

Junior subordinated debt securities

296,723

296,547

-

-

-

Total shareholders' equity

2,681,904

2,685,017

2,489,427

2,327,120

2,226,585

Common shareholders' equity

2,514,911

2,517,996

2,489,427

2,327,120

2,226,585

           

Balance Sheet - Average Balances

         

Total assets

$               21,189,637

$               20,243,023

$               19,170,926

$               18,637,258

$               18,033,513

Total earning assets

19,113,449

18,125,676

17,148,574

16,693,115

16,156,235

Total securities

4,461,298

3,555,014

2,738,691

2,733,335

2,704,383

Loans and leases, net of unearned income

14,226,788

14,061,118

13,726,755

13,549,591

13,078,221

Total deposits

16,905,229

16,218,715

15,509,511

15,080,885

14,445,834

Long-term debt

4,800

5,138

5,303

5,403

5,826

Junior subordinated debt securities

296,617

135,535

-

-

-

Total shareholders' equity

2,658,699

2,572,750

2,378,882

2,298,512

2,212,748

Common shareholders' equity

2,491,678

2,498,033

2,378,882

2,298,512

2,212,748

           

Nonperforming Assets:

         

Non-accrual loans and leases

$                    110,074

$                      78,796

$                      76,383

$                      71,076

$                      68,949

Loans and leases 90+ days past due, still accruing

7,272

17,531

16,659

8,053

8,471

Restructured loans and leases, still accruing

11,284

15,184

15,033

10,676

9,874

Non-performing loans (NPLs)

128,630

111,511

108,075

89,805

87,294

Other real estate owned

9,200

6,746

7,929

6,179

9,686

Non-performing assets (NPAs)

$                    137,830

$                    118,257

$                    116,004

$                      95,984

$                      96,980

           

Financial Ratios and Other Data:

         

Return on average assets

0.46%

1.29%

1.32%

1.14%

1.16%

Operating return on average assets-excluding MSR*

0.70%

1.33%

1.44%

1.33%

1.26%

Return on average shareholders' equity

3.67%

10.15%

10.63%

9.26%

9.46%

Operating return on average shareholders' equity-excluding MSR*

5.56%

10.46%

11.63%

10.82%

10.24%

Return on average common shareholders' equity

3.53%

10.46%

10.63%

9.26%

9.46%

Operating return on average common shareholders' equity-excluding MSR*

5.55%

10.78%

11.63%

10.82%

10.24%

Return on average tangible equity*

5.56%

15.47%

16.23%

14.06%

14.27%

Operating return on average tangible equity-excluding MSR*

8.42%

15.94%

17.75%

16.42%

15.45%

Return on average tangible common equity*

5.54%

16.19%

16.23%

14.06%

14.27%

Operating return on average tangible common equity-excluding MSR*

8.71%

16.68%

17.75%

16.42%

15.45%

Pre-tax pre-provision net revenue to total average assets

1.74%

1.68%

1.87%

1.73%

1.63%

Noninterest income to average assets

1.45%

1.46%

1.56%

1.43%

1.44%

Noninterest expense to average assets

3.19%

3.18%

3.30%

3.39%

3.37%

Net interest margin-fully taxable equivalent

3.54%

3.76%

3.88%

3.87%

3.86%

Net interest margin-fully taxable equivalent, excluding net accretion

         

  on acquired loans and leases

3.48%

3.61%

3.76%

3.79%

3.74%

Net interest rate spread

3.24%

3.44%

3.56%

3.56%

3.56%

Efficiency ratio (tax equivalent)*

68.65%

65.92%

65.68%

69.36%

68.85%

Operating efficiency ratio-excluding MSR (tax equivalent)*

63.89%

64.39%

63.01%

65.46%

66.89%

Loan/deposit ratio

84.23%

85.86%

88.11%

90.23%

88.96%

Price to earnings multiple (close)

9.46

13.60

13.77

13.26

16.60

Market value to common book value

77.21%

130.38%

124.62%

125.60%

125.56%

Market value to common book value (avg)

107.86%

128.18%

120.12%

125.47%

132.05%

Market value to common tangible book value

120.81%

201.13%

193.15%

191.45%

189.14%

Market value to common tangible book value (avg)

168.76%

197.74%

186.17%

191.25%

198.92%

Employee FTE

4,737

4,693

4,674

4,581

4,370

           

*Denotes non-GAAP financial measure.  Refer to related disclosure and reconciliation on pages 24 and 25.

           

Credit Quality Ratios:

         

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

0.39%

(0.06%)

(0.02%)

0.04%

0.12%

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

1.30%

0.00%

0.01%

0.01%

0.02%

Allowance for credit losses to net loans and leases

1.53%

0.85%

0.83%

0.85%

0.89%

Allowance for credit losses to non-performing loans and leases

169.63%

106.78%

108.17%

128.83%

133.46%

Allowance for credit losses to non-performing assets

158.31%

100.68%

100.78%

120.53%

120.13%

Non-performing loans and leases to net loans and leases

0.90%

0.79%

0.77%

0.66%

0.67%

Non-performing loans and leases to net loans and leases, excluding

         

  acquired loans and leases

0.64%

0.65%

0.66%

0.61%

0.62%

Non-performing assets to net loans and leases

0.97%

0.84%

0.82%

0.70%

0.74%

Non-performing assets to net loans and leases, excluding

         

  acquired loans and leases

0.68%

0.68%

0.69%

0.63%

0.65%

           

Equity Ratios:

         

Total shareholders' equity to total assets

12.75%

12.75%

12.54%

12.29%

12.16%

Total common shareholders' equity to total assets

11.96%

11.96%

12.54%

12.29%

12.16%

Tangible shareholders' equity to tangible assets*

8.82%

8.92%

8.47%

8.42%

8.41%

Tangible common shareholders' equity to tangible assets*

7.99%

8.09%

8.47%

8.42%

8.41%

           
           

Capital Adequacy:

         

Common  Equity Tier 1 capital

10.08%

10.57%

10.54%

10.52%

10.75%

Tier 1 capital

11.11%

11.60%

10.54%

10.52%

10.75%

Total capital

13.73%

14.17%

11.28%

11.28%

11.55%

Tier 1 leverage capital

8.85%

9.69%

9.14%

8.96%

9.03%

   Estimated for current quarter

         
           

Common Share Data:

         

Basic earnings per share

$                          0.21

$                          0.63

$                          0.63

$                          0.53

$                          0.52

Diluted earnings per share

0.21

0.63

0.63

0.53

0.52

Operating earnings per share*

0.25

0.67

0.66

0.55

0.52

Operating earnings per share- excluding MSR*

0.33

0.65

0.69

0.61

0.56

Cash dividends per share

0.19

0.19

0.19

0.17

0.17

Book value per share

24.50

24.09

23.76

23.12

22.48

Tangible book value per share*

15.66

15.62

15.33

15.17

14.92

Market value per share (last)

18.92

31.41

29.61

29.04

28.22

Market value per share (high)

31.61

32.97

30.54

31.10

33.45

Market value per share (low)

17.24

28.13

26.47

26.92

25.76

Market value per share (avg)

26.43

30.88

28.54

29.01

29.68

Dividend payout ratio

88.20%

29.43%

29.36%

32.24%

32.78%

Total shares outstanding

102,632,484

104,522,804

104,775,876

100,651,798

99,066,856

Average shares outstanding - basic

104,354,328

104,739,906

101,168,730

100,610,746

99,506,952

Average shares outstanding - diluted

104,733,897

105,144,032

101,493,247

100,888,164

99,717,119

           
           

Yield/Rate:

         

(Taxable equivalent basis)

         

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

5.00%

5.13%

5.16%

5.12%

5.09%

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

         

  net accretion on acquired loans and leases

4.93%

4.95%

5.02%

5.02%

4.95%

Available-for-sale securities:

         

  Taxable

1.99%

2.00%

2.13%

2.10%

2.04%

  Tax-exempt

4.44%

4.69%

5.56%

4.53%

4.63%

Short-term, FHLB and other equity investments

1.53%

1.95%

2.41%

2.52%

2.67%

  Total interest earning assets and revenue

4.27%

4.48%

4.63%

4.61%

4.57%

Deposits

0.67%

0.68%

0.71%

0.68%

0.63%

  Demand - interest bearing

0.84%

0.88%

0.94%

0.91%

0.85%

  Savings

0.26%

0.28%

0.28%

0.29%

0.30%

  Other time

1.64%

1.68%

1.67%

1.60%

1.46%

Short-term borrowings

1.25%

1.51%

1.90%

2.14%

2.16%

Total interest bearing deposits and short-term borrowings

0.95%

1.01%

1.07%

1.06%

1.01%

Junior subordinated debt

4.42%

4.17%

N/A

N/A

N/A

Long-term debt

4.96%

4.83%

4.93%

4.87%

4.88%

  Total interest bearing liabilities and expense

1.03%

1.04%

1.07%

1.06%

1.01%

Interest bearing liabilities to interest earning assets

70.81%

69.37%

70.15%

70.47%

71.15%

Net interest tax equivalent adjustment

$                           714

$                           800

$                           972

$                           974

$                        1,035

           

*Denotes non-GAAP financial measure.  Refer to related disclosure and reconciliation on pages 24 and 25.

 

 

BancorpSouth Bank

Consolidated Balance Sheets

(Unaudited)

           
 

Mar-20

Dec-19

Sep-19

Jun-19

Mar-19

 

(Dollars in thousands)

Assets

         

Cash and due from banks

$                253,495

$                261,773

$                333,108

$                212,080

$                207,486

Interest bearing deposits with other banks

         

and Federal funds sold

29,490

71,233

466,650

314,172

490,667

Available-for-sale securities, at fair value

4,468,340

4,481,974

2,766,446

2,760,732

2,692,499

Loans and leases

14,241,912

14,107,743

14,137,563

13,674,990

13,086,801

  Less:  Unearned income

17,267

18,060

16,780

16,463

15,742

             Allowance for credit losses

218,199

119,066

116,908

115,691

116,499

Net loans and leases

14,006,446

13,970,617

14,003,875

13,542,836

12,954,560

Loans held for sale

194,321

210,361

229,514

175,898

138,379

Premises and equipment, net

497,669

480,901

480,819

447,564

432,540

Accrued interest receivable

70,463

65,173

62,818

60,598

59,038

Goodwill

848,242

825,679

822,093

734,473

699,073

Other identifiable intangibles

59,345

60,008

61,100

65,930

49,396

Bank owned life insurance

327,312

326,417

328,670

315,398

305,315

Other real estate owned

9,200

6,746

7,929

6,179

9,686

Other assets

268,201

291,694

287,203

300,954

275,544

Total Assets

$           21,032,524

$           21,052,576

$           19,850,225

$           18,936,814

$           18,314,183

Liabilities

         

Deposits:

         

  Demand:  Noninterest bearing

$             4,861,155

$             4,661,821

$             4,770,907

$             4,329,172

$             4,201,695

                  Interest bearing

7,268,053

7,176,934

6,745,329

6,511,332

6,353,731

  Savings

2,013,343

1,937,985

1,898,813

1,861,247

1,855,024

  Other time

2,745,365

2,633,959

2,610,707

2,434,897

2,282,159

Total deposits

16,887,916

16,410,699

16,025,756

15,136,648

14,692,609

Securities sold under agreement to repurchase

538,962

513,422

529,788

439,541

481,567

Federal funds purchased

         

   and other short-term borrowing

290,224

725,000

480,000

730,000

630,000

Accrued interest payable

17,482

15,124

13,120

12,225

9,718

Junior subordinated debt securities

296,723

296,547

-

-

-

Long-term debt

4,721

5,053

5,161

5,271

5,503

Other liabilities

314,592

401,714

306,973

286,009

268,201

Total Liabilities

18,350,620

18,367,559

17,360,798

16,609,694

16,087,598

Shareholders' Equity

         

Preferred stock

166,993

167,021

-

-

-

Common stock

256,581

261,307

261,940

251,629

247,667

Capital surplus

558,114

605,976

611,115

506,201

462,256

Accumulated other comprehensive income (loss)

17,849

(62,663)

(50,538)

(53,252)

(69,924)

Retained earnings

1,682,367

1,713,376

1,666,910

1,622,542

1,586,586

Total Shareholders' Equity

2,681,904

2,685,017

2,489,427

2,327,120

2,226,585

Total Liabilities & Shareholders' Equity

$           21,032,524

$           21,052,576

$           19,850,225

$           18,936,814

$           18,314,183

 

 

BancorpSouth Bank

Consolidated Average Balance Sheets

(Unaudited)

           
 

Mar-20

Dec-19

Sep-19

Jun-19

Mar-19

 

(Dollars in thousands)

Assets

         

Cash and due from banks

$                246,860

$                244,444

$                229,814

$                202,564

$                213,415

Interest bearing deposits with other banks

         

and Federal funds sold

239,766

300,495

486,716

254,951

238,194

Available-for-sale securities, at fair value

4,461,298

3,555,014

2,738,691

2,733,335

2,704,383

Loans and leases

14,244,649

14,078,793

13,743,876

13,565,632

13,094,817

  Less:  Unearned income

17,861

17,675

17,121

16,041

16,596

             Allowance for credit losses

193,796

117,668

116,232

116,339

118,352

Net loans and leases

14,032,992

13,943,450

13,610,523

13,433,252

12,959,869

Loans held for sale

147,798

173,649

157,691

117,995

86,294

Premises and equipment, net

494,413

481,623

458,758

453,239

430,675

Accrued interest receivable

64,010

60,678

57,941

54,977

54,296

Goodwill

844,635

823,812

761,084

735,540

695,787

Other identifiable intangibles

58,805

60,559

59,253

49,058

50,115

Bank owned life insurance

326,808

328,567

319,894

313,550

306,134

Other real estate owned

8,151

7,820

6,908

7,313

9,555

Other assets

264,101

262,912

283,653

281,484

284,796

Total Assets

$           21,189,637

$           20,243,023

$           19,170,926

$           18,637,258

$           18,033,513

Liabilities

         

Deposits:

         

  Demand:  Noninterest bearing

$             4,717,202

$             4,803,104

$             4,479,698

$             4,307,570

$             4,078,027

                  Interest bearing

7,466,674

6,872,921

6,655,962

6,485,523

6,283,089

  Savings

1,975,690

1,913,650

1,869,045

1,872,552

1,837,197

  Other time

2,745,663

2,629,040

2,504,806

2,415,240

2,247,521

Total deposits

16,905,229

16,218,715

15,509,511

15,080,885

14,445,834

Securities sold under agreement to repurchase

541,707

530,217

507,558

484,950

457,875

Federal funds purchased

         

   and other short-term borrowing

502,257

487,272

487,456

499,385

664,056

Accrued interest payable

19,205

14,942

13,756

12,239

9,998

Junior subordinated debt securities

296,617

135,535

-

-

-

Long-term debt

4,800

5,138

5,303

5,403

5,826

Other liabilities

261,123

278,454

268,460

255,884

237,176

Total Liabilities

18,530,938

17,670,273

16,792,044

16,338,746

15,820,765

Shareholders' Equity

         

Preferred stock

167,021

74,717

-

-

-

Common stock

261,065

261,905

254,881

252,351

248,810

Capital surplus

600,880

611,667

538,665

511,786

475,390

Accumulated other comprehensive loss

(36,367)

(53,111)

(52,204)

(66,048)

(78,255)

Retained earnings

1,666,100

1,677,572

1,637,540

1,600,423

1,566,803

Total Shareholders' Equity

2,658,699

2,572,750

2,378,882

2,298,512

2,212,748

Total Liabilities & Shareholders' Equity

$           21,189,637

$           20,243,023

$           19,170,926

$           18,637,258

$           18,033,513

 

 

BancorpSouth Bank

Consolidated Condensed Statements of Income

(Dollars in thousands, except per share data)

(Unaudited)

                   
 

Quarter Ended

 

Mar-20

 

Dec-19

 

Sep-19

 

Jun-19

 

Mar-19

INTEREST REVENUE:

                 

Loans and leases

$      177,019

 

$     182,269

 

$        178,729

 

$      172,748

 

$     163,679

Deposits with other banks

739

 

1,225

 

2,456

 

1,292

 

1,516

Federal funds sold, securities purchased

                 

   under agreement to resell, FHLB and 

                 

      other equity investments

315

 

426

 

735

 

542

 

374

Available-for-sale securities:

                 

    Taxable

21,508

 

17,241

 

13,759

 

13,223

 

12,437

    Tax-exempt

1,060

 

1,266

 

1,883

 

1,890

 

2,121

Loans held for sale

1,423

 

1,385

 

1,442

 

1,368

 

1,006

        Total interest revenue

202,064

 

203,812

 

199,004

 

191,063

 

181,133

                   

INTEREST EXPENSE:

                 

Interest bearing demand

15,522

 

15,202

 

15,689

 

14,741

 

13,139

Savings

1,290

 

1,334

 

1,341

 

1,348

 

1,338

Other time

11,168

 

11,134

 

10,546

 

9,635

 

8,065

Federal funds purchased and securities sold

                 

   under agreement to repurchase

1,436

 

1,591

 

1,857

 

1,972

 

1,775

Short-term and long-term debt

1,857

 

2,293

 

2,971

 

3,349

 

4,262

Junior subordinated debt

3,261

 

1,482

 

-

 

-

 

-

Other

-

 

2

 

1

 

1

 

-

        Total interest expense

34,534

 

33,038

 

32,405

 

31,046

 

28,579

                   

        Net interest revenue

167,530

 

170,774

 

166,599

 

160,017

 

152,554

  Provision for credit losses

46,000

 

-

 

500

 

500

 

500

        Net interest revenue, after provision for

                 

          credit losses

121,530

 

170,774

 

166,099

 

159,517

 

152,054

                   

NONINTEREST REVENUE:

                 

Mortgage banking

9,470

 

10,102

 

7,289

 

351

 

2,040

Credit card, debit card and merchant fees

9,176

 

9,836

 

9,778

 

10,168

 

8,874

Deposit service charges

11,682

 

12,193

 

11,939

 

11,117

 

10,766

Security gains(losses), net

(85)

 

(41)

 

117

 

59

 

39

Insurance commissions

29,603

 

27,648

 

31,512

 

33,951

 

30,180

Wealth management

6,570

 

6,617

 

6,651

 

5,906

 

5,635

Other

10,080

 

8,342

 

8,146

 

4,780

 

6,686

        Total noninterest revenue

76,496

 

74,697

 

75,432

 

66,332

 

64,220

                   

NONINTEREST EXPENSE:

                 

Salaries and employee benefits

108,272

 

97,137

 

101,154

 

100,981

 

97,228

Occupancy, net of rental income

12,708

 

12,267

 

12,323

 

11,988

 

11,551

Equipment

4,649

 

4,725

 

4,676

 

4,423

 

3,888

Deposit insurance assessments

1,546

 

2,200

 

2,038

 

2,165

 

2,740

Other

40,831

 

46,022

 

39,423

 

38,117

 

34,561

        Total noninterest expense

168,006

 

162,351

 

159,614

 

157,674

 

149,968

        Income before income taxes

30,020

 

83,120

 

81,917

 

68,175

 

66,306

Income tax expense

5,759

 

17,271

 

18,160

 

15,118

 

14,708

        Net income

$        24,261

 

$       65,849

 

$          63,757

 

$        53,057

 

$       51,598

Less: Preferred dividends

2,372

 

-

 

-

 

-

 

-

        Net income available to common shareholders

$        21,889

 

$       65,849

 

$          63,757

 

$        53,057

 

$       51,598

                   

Net income per common share: Basic

$            0.21

 

$           0.63

 

$              0.63

 

$            0.53

 

$           0.52

                                                   Diluted

$            0.21

 

$           0.63

 

$              0.63

 

$            0.53

 

$           0.52

 

 

BancorpSouth Bank

Selected Loan Data

(Dollars in thousands)

(Unaudited)

                   
 

Quarter Ended

 

Mar-20

 

Dec-19

 

Sep-19

 

Jun-19

 

Mar-19

LOAN AND LEASE PORTFOLIO:

                 

Commercial and industrial

                 

   Commercial and industrial-non real estate

2,008,043

 

1,979,507

 

1,887,817

 

1,832,016

 

1,728,897

   Commercial and industrial-owner occupied

2,290,585

 

2,268,813

 

2,276,338

 

2,157,292

 

2,128,763

      Total commercial and industrial

4,298,628

 

4,248,320

 

4,164,155

 

3,989,308

 

3,857,660

Commercial real estate

                 

   Agricultural

339,539

 

337,349

 

347,866

 

332,902

 

309,931

   Construction, acquisition and development

1,582,039

 

1,577,342

 

1,538,073

 

1,441,269

 

1,322,671

   Commercial real estate

3,303,537

 

3,220,914

 

3,345,166

 

3,287,453

 

3,169,117

      Total commercial real estate

5,225,115

 

5,135,605

 

5,231,105

 

5,061,624

 

4,801,719

Consumer

                 

   Consumer mortgages

3,572,277

 

3,543,075

 

3,519,449

 

3,422,661

 

3,242,769

   Home equity

686,202

 

683,515

 

678,294

 

670,352

 

663,120

   Credit cards

93,896

 

102,559

 

101,213

 

101,024

 

99,260

      Total consumer

4,352,375

 

4,329,149

 

4,298,956

 

4,194,037

 

4,005,149

All other

348,527

 

376,609

 

426,567

 

413,558

 

406,531

      Total loans

$  14,224,645

 

$  14,089,683

 

$  14,120,783

 

$  13,658,527

 

$  13,071,059

                   

ALLOWANCE FOR CREDIT LOSSES:

                 

Balance, beginning of period

$      119,066

 

$      116,908

 

$      115,691

 

$       116,499

 

$      120,070

                   

Impact of adopting ASC 326 - cumulative effect adjustment

40,000

 

-

 

-

 

-

 

-

                   

Impact of adopting ASC 326 - purchased loans with credt

                 

   deterioration

22,634

 

-

 

-

 

-

 

-

                   

Loans and leases charged-off:

                 

Commercial and industrial

                 

   Commercial and industrial-non real estate

(10,792)

 

(1,273)

 

(218)

 

(866)

 

(819)

   Commercial and industrial-owner occupied

(184)

 

(192)

 

(65)

 

-

 

-

     Total commercial and industrial

(10,976)

 

(1,465)

 

(283)

 

(866)

 

(819)

Commercial real estate

                 

   Agricultural

(65)

 

(11)

 

-

 

-

 

-

   Construction, acquisition and development

(3,173)

 

(26)

 

-

 

(45)

 

-

   Commercial real estate

(67)

 

-

 

(49)

 

(250)

 

(3,815)

     Total commercial real estate

(3,305)

 

(37)

 

(49)

 

(295)

 

(3,815)

Consumer

                 

   Consumer mortgages

(524)

 

(687)

 

(255)

 

(237)

 

(185)

   Home equity

(236)

 

(173)

 

(39)

 

(124)

 

(353)

   Credit cards

(798)

 

(797)

 

(631)

 

(922)

 

(955)

     Total consumer

(1,558)

 

(1,657)

 

(925)

 

(1,283)

 

(1,493)

All other

(914)

 

(965)

 

(895)

 

(912)

 

(831)

     Total loans charged-off

(16,753)

 

(4,124)

 

(2,152)

 

(3,356)

 

(6,958)

                   

Recoveries:

                 

Commercial and industrial

                 

   Commercial and industrial-non real estate

355

 

353

 

835

 

747

 

360

   Commercial and industrial-owner occupied

1,179

 

30

 

49

 

71

 

100

     Total commercial and industrial

1,534

 

383

 

884

 

818

 

460

Commercial real estate

                 

   Agricultural

6

 

4

 

3

 

10

 

4

   Construction, acquisition and development

245

 

584

 

480

 

63

 

714

   Commercial real estate

135

 

4,212

 

29

 

218

 

78

     Total commercial real estate

386

 

4,800

 

512

 

291

 

796

Consumer

                 

   Consumer mortgages

397

 

407

 

278

 

244

 

1,081

   Home equity

80

 

216

 

731

 

179

 

75

   Credit cards

285

 

218

 

224

 

223

 

218

     Total consumer

762

 

841

 

1,233

 

646

 

1,374

All other

344

 

258

 

240

 

293

 

257

     Total recoveries

3,026

 

6,282

 

2,869

 

2,048

 

2,887

                   

Net (charge-offs)recoveries

(13,727)

 

2,158

 

717

 

(1,308)

 

(4,071)

                   

Initial allowance on loans purchased with credit deterioration

4,226

 

-

 

-

 

-

 

-

                   

Provision:

                 

   Initial provision for loans acquired during the quarter

1,000

 

-

 

-

 

-

 

-

   Provision for credit losses related to loans and leases

45,000

 

-

 

500

 

500

 

500

     Total provision

46,000

 

-

 

500

 

500

 

500

                   

Balance, end of period

$      218,199

 

$      119,066

 

$      116,908

 

$       115,691

 

$      116,499

                   

Average loans for period

$ 14,226,788

 

$ 14,061,118

 

$ 13,726,755

 

$ 13,549,591

 

$ 13,078,221

                   

Ratio:

                 

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

0.39%

 

(0.06%)

 

(0.02%)

 

0.04%

 

0.12%

 

 

BancorpSouth Bank

Selected Loan Data

(Dollars in thousands)

(Unaudited)

                     
   

Quarter Ended

   

Mar-20

 

Dec-19

 

Sep-19

 

Jun-19

 

Mar-19

BXS ORIGINATED LOANS AND LEASES:

                   
                     

Loans and leases charged off:

                   

Commercial and industrial

                   

   Commercial and industrial-non real estate

 

$           (230)

 

$          (844)

 

$          (185)

 

$           (773)

 

$          (651)

   Commercial and industrial-owner occupied

 

(19)

 

(184)

 

(65)

 

-

 

-

     Total commercial and industrial

 

(249)

 

(1,028)

 

(250)

 

(773)

 

(651)

Commercial Real estate

                   

   Agricultural

 

(65)

 

(6)

 

-

 

-

 

-

   Construction, acquisition and development

 

(121)

 

(26)

 

-

 

(45)

 

-

   Commercial real estate

 

(67)

 

-

 

(49)

 

(250)

 

(3,815)

     Total real estate

 

(253)

 

(32)

 

(49)

 

(295)

 

(3,815)

Consumer

                   

   Consumer mortgages

 

(357)

 

(648)

 

(255)

 

(237)

 

(178)

   Home equity

 

(236)

 

(173)

 

(39)

 

(124)

 

(353)

   Credit cards

 

(798)

 

(797)

 

(631)

 

(922)

 

(955)

     Total consumer

 

(1,391)

 

(1,618)

 

(925)

 

(1,283)

 

(1,486)

All other

 

(704)

 

(782)

 

(848)

 

(832)

 

(823)

     Total loans charged off

 

(2,597)

 

(3,460)

 

(2,072)

 

(3,183)

 

(6,775)

                     

Recoveries:

                   

Commercial and industrial

                   

   Commercial and industrial-non real estate

 

325

 

277

 

833

 

720

 

357

   Commercial and industrial-owner occupied

 

1,177

 

30

 

49

 

41

 

100

     Total commercial and industrial

 

1,502

 

307

 

882

 

761

 

457

Commercial Real estate

                   

   Agricultural

 

4

 

4

 

3

 

10

 

4

   Construction, acquisition and development

 

244

 

583

 

480

 

63

 

714

   Commercial real estate

 

135

 

4,212

 

29

 

218

 

78

     Total real estate

 

383

 

4,799

 

512

 

291

 

796

Consumer

                   

   Consumer mortgages

 

395

 

405

 

275

 

241

 

1,081

   Home equity

 

79

 

215

 

729

 

177

 

75

   Credit cards

 

285

 

218

 

224

 

223

 

218

     Total consumer

 

759

 

838

 

1,228

 

641

 

1,374

All other

 

316

 

245

 

226

 

291

 

253

     Total recoveries

 

2,960

 

6,189

 

2,848

 

1,984

 

2,880

                     

Net (charge-offs)/recoveries

 

$            363

 

$         2,729

 

$           776

 

$        (1,199)

 

$        (3,895)

 

 

 

BancorpSouth Bank

Selected Loan Data

(Dollars in thousands)

(Unaudited)

                   
 

Quarter Ended

 

Mar-20

 

Dec-19

 

Sep-19

 

Jun-19

 

Mar-19

ACQUIRED LOANS AND LEASES:

                 
                   

Loans and leases charged off:

                 

Commercial and industrial

                 

   Commercial and industrial-non real estate

$       (10,562)

 

$          (429)

 

$            (33)

 

$            (93)

 

$          (168)

   Commercial and industrial-owner occupied

(165)

 

(8)

 

-

 

-

 

-

     Total commercial and industrial

(10,727)

 

(437)

 

(33)

 

(93)

 

(168)

Commercial Real estate

                 

   Agricultural

-

 

(5)

 

-

 

-

 

-

   Construction, acquisition and development

(3,052)

 

-

 

-

 

-

 

-

   Commercial real estate

-

 

-

 

-

 

-

 

-

     Total real estate

(3,052)

 

(5)

 

-

 

-

 

-

Consumer

                 

   Consumer mortgages

(167)

 

(39)

 

-

 

-

 

(7)

   Home equity

-

 

-

 

-

 

-

 

-

   Credit cards

-

 

-

 

-

 

-

 

-

     Total consumer

(167)

 

(39)

 

-

 

-

 

(7)

All other

(210)

 

(183)

 

(47)

 

(80)

 

(8)

     Total loans charged off

(14,156)

 

(664)

 

(80)

 

(173)

 

(183)

                   

Recoveries:

                 

Commercial and industrial

                 

   Commercial and industrial-non real estate

30

 

76

 

2

 

27

 

3

   Commercial and industrial-owner occupied

2

 

-

 

-

 

30

 

-

     Total commercial and industrial

32

 

76

 

2

 

57

 

3

Commercial Real estate

                 

   Agricultural

2

 

-

 

-

 

-

 

-

   Construction, acquisition and development

1

 

1

 

-

 

-

 

-

   Commercial real estate

-

 

-

 

-

 

-

 

-

     Total real estate

3

 

1

 

-

 

-

 

-

Consumer

                 

   Consumer mortgages

2

 

2

 

3

 

3

 

-

   Home equity

1

 

1

 

2

 

2

 

-

   Credit cards

-

 

-

 

-

 

-

 

-

     Total consumer

3

 

3

 

5

 

5

 

-

All other

28

 

13

 

14

 

2

 

4

     Total recoveries

66

 

93

 

21

 

64

 

7

                   

Net (charge-offs)/recoveries

$       (14,090)

 

$          (571)

 

$            (59)

 

$           (109)

 

$          (176)

 

 

BancorpSouth Bank

Selected Loan Data

(Dollars in thousands)

(Unaudited)

                   
 

Quarter Ended

 

Mar-20

 

Dec-19

 

Sep-19

 

Jun-19

 

Mar-19

NON-PERFORMING ASSETS

                 

NON-PERFORMING LOANS AND LEASES:

                 

  Nonaccrual Loans and Leases

                 

    Commercial and industrial

                 

       Commercial and industrial-non real estate

$    16,589

 

$       11,105

 

$       10,430

 

$      9,456

 

$       10,431

       Commercial and industrial-owner occupied

11,212

 

7,838

 

7,446

 

8,648

 

8,782

         Total commercial and industrial

27,801

 

18,943

 

17,876

 

18,104

 

19,213

    Commercial real estate

                 

       Agricultural

5,454

 

4,772

 

4,423

 

6,115

 

6,263

       Construction, acquisition and development

13,899

 

6,225

 

2,231

 

2,071

 

2,710

       Commercial real estate

29,697

 

16,199

 

16,823

 

13,064

 

12,283

         Total commercial real estate

49,050

 

27,196

 

23,477

 

21,250

 

21,256

    Consumer

                 

       Consumer mortgages

29,834

 

28,879

 

31,744

 

28,779

 

25,680

       Home equity

2,597

 

2,993

 

2,767

 

2,432

 

2,259

       Credit cards

122

 

63

 

85

 

86

 

160

         Total consumer

32,553

 

31,935

 

34,596

 

31,297

 

28,099

    All other

670

 

722

 

434

 

425

 

381

         Total nonaccrual loans and leases

$  110,074

 

$       78,796

 

$       76,383

 

$    71,076

 

$       68,949

                   

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

7,272

 

17,531

 

16,659

 

8,053

 

8,471

  Restructured Loans and Leases, Still Accruing

11,284

 

15,184

 

15,033

 

10,676

 

9,874

     Total non-performing loans and leases

$  128,630

 

$      111,511

 

$      108,075

 

$    89,805

 

$       87,294

                   

OTHER REAL ESTATE OWNED:

9,200

 

6,746

 

7,929

 

6,179

 

9,686

                   

Total Non-performing Assets

$  137,830

 

$      118,257

 

$      116,004

 

$    95,984

 

$       96,980

                   

  BXS originated assets

$    85,908

 

$       78,295

 

$       84,413

 

$    76,816

 

$       77,110

  Acquired assets

51,922

 

39,962

 

31,591

 

19,168

 

19,870

Total Non-performing Assets

$  137,830

 

$      118,257

 

$      116,004

 

$    95,984

 

$       96,980

                   

Additions to Nonaccrual Loans and Leases During the Quarter

$    47,523

 

$       25,147

 

$       26,331

 

$    22,002

 

$       15,419

                   

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

                 

    BXS originated loans

$    54,315

 

$       44,559

 

$       40,668

 

$    42,968

 

$       34,591

    Acquired loans

14,405

 

23,054

 

16,741

 

14,042

 

10,840

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

$    68,720

 

$       67,613

 

$       57,409

 

$    57,010

 

$       45,431

 

 

BancorpSouth Bank

Selected Loan Data

(Dollars in thousands)

(Unaudited)

                   
 

March 31, 2020

             

Purchased

   
   

Special

       

Credit

   
 

Pass

Mention

Substandard

Doubtful

Loss

Impaired

Deteriorated (Loss)

 

Total

LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE:

                 

Commercial and industrial

                 

   Commercial and industrial-non real estate

$   1,936,032

$         3,424

$       53,713

$        191

$            667

$    1,769

$              12,247

 

$          2,008,043

   Commercial and industrial-owner occupied

2,224,075

-

56,824

-

-

5,568

4,118

 

2,290,585

     Total commercial and industrial

4,160,107

3,424

110,537

191

667

7,337

16,365

 

4,298,628

Commercial real estate

                 

   Agricultural

324,412

-

12,006

-

-

711

2,410

 

339,539

   Construction, acquisition and development

1,551,667

2,045

14,739

-

-

7,778

5,810

 

1,582,039

   Commercial real estate

3,199,726

-

74,263

-

-

24,205

5,343

 

3,303,537

     Total commercial real estate

5,075,805

2,045

101,008

-

-

32,694

13,563

 

5,225,115

Consumer

                 

   Consumer mortgages

3,476,631

-

94,324

-

-

596

726

 

3,572,277

   Home equity

679,135

-

7,067

-

-

-

-

 

686,202

   Credit cards

93,896

-

-

-

-

-

-

 

93,896

     Total consumer

4,249,662

-

101,391

-

-

596

726

 

4,352,375

All other

336,028

1,660

10,761

-

-

-

78

 

348,527

     Total loans

$ 13,821,602

$         7,129

$      323,697

$        191

$            667

$  40,627

$              30,732

 

$         14,224,645

                   

  BXS originated loans

$ 12,150,616

$         2,045

$      225,506

$        191

$                -

$  22,356

$                    -

 

$         12,400,714

  Acquired loans*

1,670,986

5,084

98,191

-

667

18,271

30,732

 

1,823,931

     Total Loans

$ 13,821,602

$         7,129

$      323,697

$        191

$            667

$  40,627

$              30,732

 

$         14,224,645

                   
 

December 31, 2019

   

Special

       

Purchased

   
 

Pass

Mention

Substandard

Doubtful

Loss

Impaired

Credit Impaired

 

Total

LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE:

                 

Commercial and industrial

                 

   Commercial and industrial-non real estate

$   1,914,055

$                -

$       56,035

$        194

$                -

$    1,054

$                8,169

 

$          1,979,507

   Commercial and industrial-owner occupied

2,214,870

-

44,077

-

-

4,296

5,570

 

2,268,813

     Total commercial and industrial

4,128,925

-

100,112

194

-

5,350

13,739

 

4,248,320

Commercial real estate

                 

   Agricultural

326,983

-

8,200

-

-

757

1,409

 

337,349

   Construction, acquisition and development

1,554,291

-

11,759

-

-

5,457

5,835

 

1,577,342

   Commercial real estate

3,130,489

-

74,606

-

-

11,934

3,885

 

3,220,914

     Total commercial real estate

5,011,763

-

94,565

-

-

18,148

11,129

 

5,135,605

Consumer

                 

   Consumer mortgages

3,455,307

-

86,373

-

-

596

799

 

3,543,075

   Home equity

675,642

-

7,873

-

-

-

-

 

683,515

   Credit cards

102,559

-

-

-

-

-

-

 

102,559

     Total consumer

4,233,508

-

94,246

-

-

596

799

 

4,329,149

All other

364,783

2,240

9,568

-

-

-

18

 

376,609

     Total loans

$ 13,738,979

$         2,240

$      298,491

$        194

$                -

$  24,094

$              25,685

 

$         14,089,683

                   

  BXS originated loans

$ 12,080,336

$              -

$      202,017

$        194

$                -

$  17,110

$                    -

 

$         12,299,657

  Acquired loans*

1,658,643

2,240

96,474

-

-

6,984

25,685

 

1,790,026

     Total Loans

$ 13,738,979

$         2,240

$      298,491

$        194

$                -

$  24,094

$              25,685

 

$         14,089,683

                   
                   

*Includes certain loans that are no longer included in the "Net book value of acquired loans" on page 10 as a result of maturity, refinance, or other triggering event.

 

 

BancorpSouth Bank

Selected Loan Data

(Dollars in thousands)

(Unaudited)

                   
                   
                   
 

Quarter Ended

 

Mar-20

 

Dec-19

 

Sep-19

 

Jun-19

 

Mar-19

LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE:

                 

Pass

$ 13,821,602

 

$ 13,738,979

 

$ 13,782,584

 

$ 13,363,023

 

$  12,757,342

Special Mention

7,129

 

2,240

 

2,530

 

490

 

534

Substandard

323,697

 

298,491

 

280,059

 

244,585

 

264,138

Doubtful

191

 

194

 

194

 

218

 

786

Loss

667

 

-

 

-

 

-

 

-

Impaired

40,627

 

24,094

 

24,948

 

24,048

 

25,545

Purchased Credit Deteriorated (Loss)

30,732

 

-

 

-

 

-

 

-

Purchased Credit Impaired

-

 

25,685

 

30,468

 

26,163

 

22,714

   Total

$ 14,224,645

 

$ 14,089,683

 

$ 14,120,783

 

$ 13,658,527

 

$  13,071,059

                   

BXS ORIGINATED LOAN PORTFOLIO BY INTERNALLY

                 

   ASSIGNED GRADE:

                 

Pass

$ 12,150,616

 

$ 12,080,336

 

$ 11,901,311

 

$ 11,876,557

 

$  11,537,493

Special Mention

2,045

 

-

 

-

 

-

 

534

Substandard

225,506

 

202,017

 

192,133

 

181,045

 

205,512

Doubtful

191

 

194

 

194

 

218

 

786

Loss

-

 

-

 

-

 

-

 

-

Impaired

22,356

 

17,110

 

24,379

 

22,821

 

25,545

Purchased Credit Deteriorated (Loss)

-

 

-

 

-

 

-

 

-

Purchased Credit Impaired

-

 

-

 

-

 

-

 

-

   Total

$ 12,400,714

 

$ 12,299,657

 

$ 12,118,017

 

$ 12,080,641

 

$  11,769,870

                   

ACQUIRED LOAN PORTFOLIO BY INTERNALLY

                 

   ASSIGNED GRADE:

                 

Pass

$  1,670,986

 

$   1,658,643

 

$  1,881,273

 

$   1,486,466

 

$    1,219,849

Special Mention

5,084

 

2,240

 

2,530

 

490

 

-

Substandard

98,191

 

96,474

 

87,926

 

63,540

 

58,626

Doubtful

-

 

-

 

-

 

-

 

-

Loss

667

 

-

 

-

 

-

 

-

Impaired

18,271

 

6,984

 

569

 

1,227

 

-

Purchased Credit Deteriorated (Loss)

30,732

 

-

 

-

 

-

 

-

Purchased Credit Impaired

-

 

25,685

 

30,468

 

26,163

 

22,714

   Total

$  1,823,931

 

$   1,790,026

 

$  2,002,766

 

$   1,577,886

 

$    1,301,189

 

 

BancorpSouth Bank

Geographical Information

(Dollars in thousands)

(Unaudited)

                   
 

March 31, 2020

 

Alabama

               
 

and Florida

               
 

Panhandle

Arkansas

Louisiana

Mississippi

Missouri

Tennessee

Texas

Other

Total

LOAN AND LEASE PORTFOLIO:

                 

Commercial and industrial

                 

   Commercial and industrial-non real estate

$    161,379

$    147,987

$    245,925

$    569,402

$      73,625

$      90,747

$    713,421

$       5,557

$   2,008,043

   Commercial and industrial-owner occupied

280,031

177,657

260,897

636,396

63,915

139,738

731,951

-

2,290,585

     Total commercial and industrial

441,410

325,644

506,822

1,205,798

137,540

230,485

1,445,372

5,557

4,298,628

Commercial real estate

                 

   Agricultural

31,654

71,630

27,448

69,331

6,649

11,992

120,835

-

339,539

   Construction, acquisition and development

151,040

53,615

72,365

303,362

18,206

120,200

863,251

-

1,582,039

   Commercial real estate

347,572

350,034

325,375

687,595

227,905

212,568

1,151,833

655

3,303,537

     Total commercial real estate

530,266

475,279

425,188

1,060,288

252,760

344,760

2,135,919

655

5,225,115

Consumer

                 

   Consumer mortgages

579,516

338,882

337,456

846,244

100,368

318,084

987,688

64,039

3,572,277

   Home equity

110,978

50,228

90,722

243,681

17,080

137,408

35,993

112

686,202

   Credit cards

-

-

-

-

-

-

-

93,896

93,896

     Total consumer

690,494

389,110

428,178

1,089,925

117,448

455,492

1,023,681

158,047

4,352,375

All other

59,698

38,146

24,908

113,905

2,817

14,855

84,782

9,416

348,527

     Total loans

$ 1,721,868

$ 1,228,179

$ 1,385,096

$ 3,469,916

$    510,565

$ 1,045,592

$ 4,689,754

$    173,675

$ 14,224,645

                   

Loan growth, excluding loans acquired during

                 

    the quarter (annualized)

(0.99%)

(15.66%)

(17.95%)

8.26%

14.61%

(7.46%)

11.02%

(164.48%)

(1.45%)

                   

NON-PERFORMING LOANS AND LEASES:

                 

Commercial and industrial

                 

   Commercial and industrial-non real estate

$          252

$       1,387

$       1,334

$       1,332

$          796

$          427

$      12,022

$          183

$       17,733

   Commercial and industrial-owner occupied

2,848

2,230

1,295

3,089

-

40

7,569

-

17,071

     Total commercial and industrial

3,100

3,617

2,629

4,421

796

467

19,591

183

34,804

Commercial real estate

                 

   Agricultural

509

569

224

81

-

-

4,077

-

5,460

   Construction, acquisition and development

210

219

2,404

12

-

393

10,848

-

14,086

   Commercial real estate

1,100

14

5,134

1,243

-

-

23,515

-

31,006

     Total commercial real estate

1,819

802

7,762

1,336

-

393

38,440

-

50,552

Consumer

                 

   Consumer mortgages

7,076

3,880

2,225

14,103

151

2,459

7,563

926

38,383

   Home equity

291

259

391

810

162

1,023

119

-

3,055

   Credit cards

-

-

-

-

-

-

-

1,111

1,111

     Total consumer

7,367

4,139

2,616

14,913

313

3,482

7,682

2,037

42,549

All other

165

122

10

76

-

18

331

3

725

     Total loans

$      12,451

$       8,680

$      13,017

$      20,746

$       1,109

$       4,360

$      66,044

$       2,223

$      128,630

                   

NON-PERFORMING LOANS AND LEASES

                 

   AS A PERCENTAGE OF OUTSTANDING:

                 

Commercial and industrial

                 

   Commercial and industrial-non real estate

0.16%

0.94%

0.54%

0.23%

1.08%

0.47%

1.69%

3.29%

0.88%

   Commercial and industrial-owner occupied

1.02%

1.26%

0.50%

0.49%

0.00%

0.03%

1.03%

N/A

0.75%

     Total commercial and industrial

0.70%

1.11%

0.52%

0.37%

0.58%

0.20%

1.36%

3.29%

0.81%

Commercial real estate

                 

   Agricultural

1.61%

0.79%

0.82%

0.12%

0.00%

0.00%

3.37%

N/A

1.61%

   Construction, acquisition and development

0.14%

0.41%

3.32%

0.00%

0.00%

0.33%

1.26%

N/A

0.89%

   Commercial real estate

0.32%

0.00%

1.58%

0.18%

0.00%

0.00%

2.04%

0.00%

0.94%

     Total commercial real estate

0.34%

0.17%

1.83%

0.13%

0.00%

0.11%

1.80%

0.00%

0.97%

Consumer

                 

   Consumer mortgages

1.22%

1.14%

0.66%

1.67%

0.15%

0.77%

0.77%

1.45%

1.07%

   Home equity

0.26%

0.52%

0.43%

0.33%

0.95%

0.74%

0.33%

0.00%

0.45%

   Credit cards

N/A

N/A

N/A

N/A

N/A

N/A

N/A

1.18%

1.18%

     Total consumer

1.07%

1.06%

0.61%

1.37%

0.27%

0.76%

0.75%

1.29%

0.98%

All other

0.28%

0.32%

0.04%

0.07%

0.00%

0.12%

0.39%

0.03%

0.21%

     Total loans

0.72%

0.71%

0.94%

0.60%

0.22%

0.42%

1.41%

1.28%

0.90%

 

 

BancorpSouth Bank

Noninterest Revenue and Expense

(Dollars in thousands)

(Unaudited)

                   
 

Quarter Ended

 

Mar-20

 

Dec-19

 

Sep-19

 

Jun-19

 

Mar-19

NONINTEREST REVENUE:

                 

Mortgage banking excl. MSR and MSR Hedge market value adj

$    20,553

 

$         6,938

 

$       11,283

 

$      9,167

 

$         6,909

MSR and MSR Hedge market value adjustment

(11,083)

 

3,164

 

(3,994)

 

(8,816)

 

(4,869)

Credit card, debit card and merchant fees

9,176

 

9,836

 

9,778

 

10,168

 

8,874

Deposit service charges

11,682

 

12,193

 

11,939

 

11,117

 

10,766

Securities gains (losses), net

(85)

 

(41)

 

117

 

59

 

39

Insurance commissions

29,603

 

27,648

 

31,512

 

33,951

 

30,180

Trust income

4,013

 

3,951

 

4,488

 

3,815

 

3,788

Annuity fees

55

 

136

 

184

 

245

 

265

Brokerage commissions and fees

2,502

 

2,530

 

1,979

 

1,846

 

1,582

Bank-owned life insurance

1,999

 

3,427

 

2,529

 

1,854

 

1,822

Other miscellaneous income

8,081

 

4,915

 

5,617

 

2,926

 

4,864

     Total noninterest revenue

$    76,496

 

$       74,697

 

$       75,432

 

$    66,332

 

$       64,220

                   

NONINTEREST EXPENSE:

                 

Salaries and employee benefits

$  108,272

 

$       97,137

 

$      101,154

 

$  100,981

 

$       97,228

Occupancy, net of rental income

12,708

 

12,267

 

12,323

 

11,988

 

11,551

Equipment

4,649

 

4,725

 

4,676

 

4,423

 

3,888

Deposit insurance assessments

1,546

 

2,200

 

2,038

 

2,165

 

2,740

Advertising

1,099

 

1,153

 

1,382

 

1,427

 

947

Foreclosed property expense

924

 

855

 

870

 

519

 

624

Telecommunications

1,461

 

1,504

 

1,400

 

1,419

 

1,340

Public relations

680

 

880

 

1,069

 

934

 

765

Data processing

9,646

 

10,041

 

9,066

 

7,968

 

8,442

Computer software

4,315

 

4,478

 

3,825

 

3,835

 

3,699

Amortization of intangibles

2,394

 

2,508

 

2,117

 

2,508

 

1,985

Legal

898

 

854

 

786

 

1,310

 

605

Merger expense

4,494

 

5,782

 

4,062

 

3,136

 

891

Postage and shipping

1,441

 

1,353

 

1,281

 

1,217

 

1,412

Other miscellaneous expense

13,479

 

16,614

 

13,565

 

13,844

 

13,851

     Total noninterest expense

$  168,006

 

$      162,351

 

$      159,614

 

$  157,674

 

$      149,968

                   

INSURANCE COMMISSIONS:

                 

Property and casualty commissions

$    21,246

 

$       19,994

 

$       22,643

 

$    23,429

 

$       21,238

Life and health commissions

6,175

 

5,979

 

6,116

 

7,355

 

5,982

Risk management income

532

 

667

 

564

 

622

 

587

Other

1,650

 

1,008

 

2,189

 

2,545

 

2,373

     Total insurance commissions

$    29,603

 

$       27,648

 

$       31,512

 

$    33,951

 

$       30,180

 

 

BancorpSouth Bank

Selected Additional Information

(Dollars in thousands)

(Unaudited)

           
 

Quarter Ended

 

Mar-20

Dec-19

Sep-19

Jun-19

Mar-19

MORTGAGE SERVICING RIGHTS:

         

Fair value, beginning of period

$      57,109

$       51,492

$       55,294

$      64,643

$       69,822

Additions to mortgage servicing rights:

         

   Originations of servicing assets

3,079

4,025

3,410

2,790

1,976

Changes in fair value:

         

   Due to payoffs/paydowns

(2,506)

(2,323)

(2,542)

(2,739)

(2,052)

   Due to change in valuation inputs or

         

     assumptions used in the valuation model

(15,438)

3,915

(4,669)

(9,399)

(5,103)

   Other changes in fair value

(1)

-

(1)

(1)

-

Fair value, end of period

$      42,243

$       57,109

$       51,492

$      55,294

$       64,643

           

MORTGAGE BANKING REVENUE:

         

Production revenue:

         

   Origination

$      17,906

$         4,326

$         8,922

$       7,016

$         4,068

   Servicing

5,153

4,935

4,903

4,890

4,893

   Payoffs/Paydowns

(2,506)

(2,323)

(2,542)

(2,739)

(2,052)

     Total production revenue

20,553

6,938

11,283

9,167

6,909

Market value adjustment on MSR

(15,438)

3,915

(4,669)

(9,399)

(5,103)

Market value adjustment on MSR Hedge

4,355

(751)

675

583

234

Total mortgage banking revenue

$       9,470

$       10,102

$         7,289

$          351

$         2,040

           
           
           

Mortgage loans serviced

$ 6,999,383

$   6,898,195

$   6,799,186

$ 6,749,416

$   6,718,236

MSR/mtg loans serviced

0.60%

0.83%

0.76%

0.82%

0.96%

           

AVAILABLE-FOR-SALE SECURITIES, at fair value

         

U.S. Government agencies

3,532,905

3,599,317

2,323,159

$ 2,283,899

$   2,179,699

U.S. Government agency issued residential

         

   mortgage-back securities

132,902

133,375

128,677

134,648

141,542

U.S. Government agency issued commercial

         

   mortgage-back securities

595,885

609,009

115,228

94,878

98,941

Obligations of states and political subdivisions

206,648

140,273

199,382

247,307

272,317

Total available-for-sale securities

$ 4,468,340

$   4,481,974

$   2,766,446

$ 2,760,732

$   2,692,499

 

 

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 available to common shareholders, net operating income-excluding MSR, net operating income available to common shareholders-excluding MSR, pre-tax pre-provision net revenue, total operating expense, tangible shareholders' equity to tangible assets, tangible common shareholders' equity to tangible assets, return on tangible equity, return on tangible common equity, operating return on tangible equity-excluding MSR, operating return on tangible common equity-excluding MSR,  operating return on average assets-excluding MSR, operating return on average shareholders' equity-excluding MSR, operating return on average common shareholders' equity-excluding MSR, pre-tax pre-provision net revenue to total average assets, tangible book value per common share, operating earnings per common share, operating earnings per common 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, Net Operating Income Available to Common Shareholders, Net Operating Income-Excluding MSR, and Net Operating Income Available to Common Shareholders-excluding MSR to Net Income:

 
     

Quarter ended

     

3/31/2020

 

12/31/2019

 

9/30/2019

 

6/30/2019

 

3/31/2019

                       

Net income

 

$      24,261

 

$   65,849

 

$          63,757

 

$          53,057

 

$          51,598

Plus:

Merger expense, net of tax

 

3,372

 

4,339

 

3,049

 

2,354

 

669

 

Initial provision for acquired loans,

                   
 

  net of tax

 

751

 

-

 

-

 

-

 

-

Less:

Security gains(losses), net of tax

 

(64)

 

(30)

 

88

 

45

 

29

Net operating income

 

$      28,448

 

$   70,218

 

$          66,718

 

$          55,366

 

$          52,238

Less:

Preferred dividends

 

2,372

 

-

 

-

 

-

 

-

Net operating income available to

                   

common shareholders

 

$      26,076

 

$   70,218

 

$          66,718

 

$          55,366

 

$          52,238

                       
                       

Net operating income

 

$      28,448

 

$   70,218

 

$          66,718

 

$          55,366

 

$          52,238

Less:

MSR market value adjustment, net of tax

 

(8,318)

 

2,374

 

(2,998)

 

(6,616)

 

(3,654)

Net operating income-excluding MSR

 

$      36,766

 

$   67,844

 

$          69,716

 

$          61,982

 

$          55,892

Less:

Preferred dividends

 

2,372

 

-

 

-

 

-

 

-

Net operating income available to common

                   

shareholders-excluding MSR

 

$      34,394

 

$   67,844

 

$          69,716

 

$          61,982

 

$          55,892

                       
                       

Reconciliation of Net Income to Pre-Tax Pre-Provision Net Revenue

             
                       

Net income

 

$      24,261

 

$   65,849

 

$          63,757

 

$          53,057

 

$          51,598

Plus:

Provision for credit losses

 

46,000

 

-

 

500

 

500

 

500

 

Merger expense

 

4,494

 

5,782

 

4,062

 

3,136

 

891

 

Income tax expense

 

5,759

 

17,271

 

18,160

 

15,118

 

14,708

Less:

Security gains(losses)

 

(85)

 

(41)

 

117

 

59

 

39

 

MSR market value adjustment

 

(11,083)

 

3,164

 

(3,994)

 

(8,816)

 

(4,869)

Pre-tax pre-provision net revenue

 

$      91,682

 

$   85,779

 

$          90,356

 

$          80,568

 

$          72,527

                       
                       

Reconciliation of Total Operating Expense to Total Noninterest Expense:

           
                       

Total noninterest expense

 

$    168,006

 

$ 162,351

 

$        159,614

 

$         157,674

 

$         149,968

Less:

Merger expense

 

4,494

 

5,782

 

4,062

 

3,136

 

891

Total operating expense

 

$    163,512

 

$ 156,569

 

$        155,552

 

$         154,538

 

$         149,077

 

 

 

BancorpSouth Bank

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

(Dollars in thousands, except per share amounts)

(Unaudited)

                       
                       
                       

Reconciliation of Tangible Assets and Tangible Shareholders' Equity to 

                   

Total Assets and Total Shareholders' Equity:

                   
                       
     

Quarter ended

     

3/31/2020

 

12/31/2019

 

9/30/2019

 

6/30/2019

 

3/31/2019

Tangible assets

                   

Total assets

 

$ 21,032,524

 

$  21,052,576

 

$  19,850,225

 

$ 18,936,814

 

$  18,314,183

Less:  

Goodwill

 

848,242

 

825,679

 

822,093

 

734,473

 

699,073

 

Other identifiable intangible assets

 

59,345

 

60,008

 

61,100

 

65,930

 

49,396

Total tangible assets

 

$ 20,124,937

 

$  20,166,889

 

$  18,967,032

 

$ 18,136,411

 

$  17,565,714

                       

PERIOD END BALANCES:

                   

Tangible shareholders' equity

                   

Total shareholders' equity

 

$   2,681,904

 

$    2,685,017

 

$    2,489,427

 

$   2,327,120

 

$    2,226,585

Less:

Goodwill

 

848,242

 

825,679

 

822,093

 

734,473

 

699,073

 

Other identifiable intangible assets

 

59,345

 

60,008

 

61,100

 

65,930

 

49,396

Total tangible shareholders' equity

 

$   1,774,317

 

$    1,799,330

 

$    1,606,234

 

$   1,526,717

 

$    1,478,116

Less:

Preferred stock

 

166,993

 

167,021

 

-

 

-

 

-

Total tangible common shareholders' equity

 

$   1,607,324

 

$    1,632,309

 

$    1,606,234

 

$   1,526,717

 

$    1,478,116

                       

AVERAGE BALANCES:

                   

Tangible shareholders' equity

                   

Total shareholders' equity

 

$   2,658,699

 

$    2,572,750

 

$    2,378,882

 

$   2,298,512

 

$    2,212,748

Less:

Goodwill

 

844,635

 

823,812

 

761,084

 

735,540

 

695,787

 

Other identifiable intangible assets

 

58,805

 

60,559

 

59,253

 

49,058

 

50,115

Total tangible shareholders' equity

 

$   1,755,259

 

$    1,688,379

 

$    1,558,545

 

$   1,513,914

 

$    1,466,846

Less:

Preferred stock

 

167,021

 

74,717

 

-

 

-

 

-

Total tangible common shareholders' equity

 

$   1,588,238

 

$    1,613,662

 

$    1,558,545

 

$   1,513,914

 

$    1,466,846

                       

Total average assets

 

$ 21,189,637

 

$  20,243,023

 

$  19,170,926

 

$ 18,637,258

 

$  18,033,513

Total shares of common stock outstanding

 

102,632,484

 

104,522,804

 

104,775,876

 

100,651,798

 

99,066,856

Average shares outstanding-diluted

 

104,733,897

 

105,144,032

 

101,493,247

 

100,888,164

 

99,717,119

                       

Tangible shareholders' equity to tangible assets (1)

 

8.82%

 

8.92%

 

8.47%

 

8.42%

 

8.41%

Tangible common shareholders' equity to tangible assets (2)

 

7.99%

 

8.09%

 

8.47%

 

8.42%

 

8.41%

Return on average tangible equity (3)

 

5.56%

 

15.47%

 

16.23%

 

14.06%

 

14.27%

Return on average tangible common equity (4)

 

5.54%

 

16.19%

 

16.23%

 

14.06%

 

14.27%

Operating return on average tangible equity-excluding MSR (5)

 

8.42%

 

15.94%

 

17.75%

 

16.42%

 

15.45%

Operating return on average tangible common equity-excluding MSR (6)

 

8.71%

 

16.68%

 

17.75%

 

16.42%

 

15.45%

Operating return on average assets-excluding MSR (7)

 

0.70%

 

1.33%

 

1.44%

 

1.33%

 

1.26%

Operating return on average shareholders' equity-excluding MSR (8)

 

5.56%

 

10.46%

 

11.63%

 

10.82%

 

10.24%

Operating return on average common shareholders' equity-excluding MSR (9)

 

5.55%

 

10.78%

 

11.63%

 

10.82%

 

10.24%

Pre-tax pre-provision net revenue to total average assets (10)

 

1.74%

 

1.68%

 

1.87%

 

1.73%

 

1.63%

Tangible book value per common share (11)

 

$         15.66

 

$          15.62

 

$          15.33

 

$         15.17

 

$         14.92

Operating earnings per common share (12)

 

$           0.25

 

$            0.67

 

$            0.66

 

$           0.55

 

$           0.52

Operating earnings per common share-excluding MSR (13)

 

$           0.33

 

$            0.65

 

$            0.69

 

$           0.61

 

$           0.56

 

(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)

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

(3)

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

(4)

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

(5)

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

(6)

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

(7)

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

(8)

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.

(9)

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

(10)

Pre-tax pre-provision net revenue to total average assets is defined by the Company as annualized pre-tax pre-provision net revenue divided by total average assets adjusted for other non-operating items included in the definition and calculation of net operating income-excluding MSR.

(11)

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

(12)

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

(13)

Operating earnings per common share-excluding MSR is defined by the Company as net operating income available to common shareholders-excluding MSR divided by average common 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, Executive Vice President and Director of Corporate Finance, 662/680-2475

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