BancorpSouth Announces Second Quarter 2014 Earnings of $30.9 Million or $0.32 per Diluted Share; Merger Agreements with Ouachita Bancshares Corp. and Central Community Corporation Extended
PR Newswire
TUPELO, Miss.

TUPELO, Miss., July 21, 2014 /PRNewswire/ -- BancorpSouth, Inc. (NYSE: BXS) today announced financial results for the quarter ended June 30, 2014, as well as the extension of the merger agreements with Ouachita Bancshares Corp. and Central Community Corporation.

Highlights for the second quarter of 2014 included:

  • Net income of $30.9 million or $0.32 per diluted share.
  • Net operating income of $31.5 million or $0.33 per diluted share.
  • Acquired assets of Lafayette, Louisiana based Knox Insurance Group, LLC. Knox was formed in 1972 and currently produces annual revenues of approximately $3 million.
  • Generated net loan growth of $243.3 million, or 10.8 percent annualized, which represents the fifth consecutive quarter of net loan growth.
  • Mortgage loan production of $291.0 million, which contributed to mortgage lending revenue of $9.1 million for the quarter.
  • Continued progress toward reducing core operating expenses.
  • Net interest margin increased to 3.59 percent compared with 3.54 percent for the first quarter of 2014.
  • Non-performing loans and leases ("NPLs") declined $19.6 million, or 21.0 percent, compared to the first quarter of 2014, while non-performing assets ("NPAs") decreased $27.9 million, or 17.8 percent, over the same period.

The Company reported net income of $30.9 million, or $0.32 per diluted share, for the second quarter of 2014 compared with net income of $20.8 million, or $0.22 per diluted share, for the second quarter of 2013 and net income of $28.4 million, or $0.30 per diluted share, for the first quarter of 2014.  Additionally, the Company reported net income of $59.3 million, or $0.62 per diluted share, for the first six months of 2014 compared to $41.6 million, or $0.44 per diluted share, for the first six months of 2013.

The Company reported net operating income (excluding merger related and other non-operating expenses) of $31.5 million, or $0.33 per diluted share, for the second quarter of 2014 compared to $27.5 million, or $0.29 per diluted share, for the second quarter of 2013 and $28.8 million, or $0.30 per diluted share, for the first quarter of 2014. 

The Company and each of Ouachita Bancshares Corp. and Central Community Corporation have determined additional time will be required to obtain regulatory approvals and to satisfy closing conditions necessary to complete their respective mergers.  The Company and each of Ouachita Bancshares Corp. and Central Community Corporation have extended their respective merger agreements to June 30, 2015. 

"We continue to believe our proposed mergers with Ouachita Bancshares Corp. and Central Community Corporation are in the best interest of our shareholders, customers and communities," stated Dan Rollins, BancorpSouth Chairman and Chief Executive Officer.

As previously announced, the mergers have been unanimously approved by the boards of directors of all three companies, and by the shareholders of Ouachita Bancshares Corp. and Central Community Corporation.  The transactions remain subject to required regulatory approvals and the satisfaction of other closing conditions.

The Company has learned that federal bank regulators have identified concerns during the course of routine supervisory activities regarding the Company's procedures, systems and processes related to certain of its compliance programs, including its Bank Secrecy Act and anti-money-laundering programs.  In addition, the Consumer Financial Protection Bureau currently is conducting a review of the Company's fair lending practices.   

Rollins continued, "While disappointed in the delay in being able to close these transactions, we are working diligently to resolve the compliance concerns that have been identified and to make the necessary improvements in our compliance programs.  We are pleased with the confidence that our merger partners have demonstrated through the extension of the merger agreements." 

"Clearly, our financial performance continues to improve and reflect the internal progress that we have made both in shifting our focus towards growth and in continuing to challenge our cost structure.  Our loan production efforts during the quarter resulted in net loan growth of over ten percent on an annualized basis.  Our mortgage lending team produced over $290 million in mortgage loans and our insurance group continues to grow organically and benefit from the insurance transactions we recently closed.  We also continue to challenge and reduce core operating costs, as evidenced by the decline seen in salaries and employee benefits.  Total non-interest expense for the quarter was impacted by elevated other real estate costs and legal expense, as well as $1.0 million of merger-related expense.  Otherwise, we continue to be pleased with the trends in our operating expenses," Rollins added.

Earnings for the quarter reflect no recorded provision for credit losses, which is consistent with no recorded provision for the first quarter of 2014 and a decline from $3.0 million for the second quarter of 2013.  NPLs declined $19.6 million, or 21.0 percent, during the second quarter of 2014 to $73.7 million at June 30, 2014 compared with $93.3 million at March 31, 2014 and declined $94.3 million, or 56.1 percent, from $167.9 million at June 30, 2013.  In addition, total NPAs declined $27.9 million, or 17.8 percent, to $128.9 million at June 30, 2014 compared with $156.9 million at March 31, 2014 and declined $127.5 million, or 49.7 percent, from $256.4 million at June 30, 2013.  Net charge-offs were $2.6 million for the second quarter of 2014 compared with $3.5 million for the first quarter of 2014 and $4.6 million for the second quarter of 2013.

Net Interest Revenue

Net interest revenue was $103.1 million for the second quarter of 2014, an increase of 5.0 percent from $98.2 million for the second quarter of 2013 and an increase of 1.5 percent from $101.5 million for the first quarter of 2014.  The fully taxable equivalent net interest margin was 3.59 percent for the second quarter of 2014 compared to 3.36 percent for the second quarter of 2013 and 3.54 percent for the first quarter of 2014.  Yields on loans and leases declined to 4.38 percent for the second quarter of 2014 compared with 4.62 percent for the second quarter of 2013 and 4.48 percent for the first quarter of 2014, while yields on total interest earning assets were relatively flat at 3.88 percent for the second quarter of 2014 compared with 3.82 percent for the second quarter of 2013 and 3.85 percent for the first quarter of 2014.  The average cost of deposits declined to 0.28 percent for the second quarter of 2014 from 0.39 percent for the second quarter of 2013 and 0.31 percent for the first quarter of 2014.

Asset, Deposit and Loan Activity

Total assets were $13.0 billion at June 30, 2014 compared with $13.2 billion at June 30, 2013.  Total deposits were $10.7 billion at June 30, 2014 compared with $11.0 billion at June 30, 2013.  Loans and leases, net of unearned income, were $9.3 billion at June 30, 2014 compared with $8.7 billion at June 30, 2013. 

The decrease in time deposits of $332.1 million, or 13.4 percent, at June 30, 2014 compared to June 30, 2013 was partially offset by growth in noninterest bearing demand deposits, which increased $107.5 million, or 4.1 percent, over the same period.  Additionally, savings deposits increased $88.7 million, or 7.3 percent, while interest bearing demand deposits declined $155.3 million, or 3.3 percent, over the same period.  As of June 30, 2014, $834.1 million of time deposits were scheduled to mature during the following two quarters at a weighted average rate of 0.77 percent. 

Provision for Credit Losses and Allowance for Credit Losses

For the second quarter of 2014, no provision for credit losses was recorded, compared with $3.0 million for the second quarter of 2013 and no provision for the first quarter of 2014.  Net charge-offs for the second quarter of 2014 were $2.6 million, compared with $4.6 million for the second quarter of 2013 and $3.5 million for the first quarter of 2014.  Recoveries of previously charged-off loans were $3.0 million for the second quarter of 2014, compared with $7.7 million for the second quarter of 2013 and $4.5 million for the first quarter of 2014.  Annualized net charge-offs were 0.11 percent of average loans and leases for the second quarter of 2014, compared with 0.21 percent for the second quarter of 2013 and 0.16 percent for the first quarter of 2014. 

NPLs were $73.7 million, or 0.79 percent of net loans and leases, at June 30, 2014, compared with $167.9 million, or 1.94 percent of net loans and leases, at June 30, 2013, and $93.3 million, or 1.03 percent of net loans and leases, at March 31, 2014.  The allowance for credit losses was $147.1 million, or 1.58 percent of net loans and leases, at June 30, 2014 compared with $161.0 million, or 1.86 percent of net loans and leases, at June 30, 2013 and $149.7 million, or 1.65 percent of net loans and leases, at March 31, 2014. 

NPLs at June 30, 2014 consisted primarily of $64.5 million of nonaccrual loans, compared with $77.5 million of nonaccrual loans at March 31, 2014.  Payments received on nonaccrual loans during the second quarter of 2014 totaled $12.9 million, compared with payments received on such loans of $23.2 million during the first quarter of 2014.  NPLs at June 30, 2014 also included $2.4 million of loans 90 days or more past due and still accruing, compared with $1.9 million of such loans at March 31, 2014, and included restructured loans still accruing of $6.7 million at June 30, 2014, compared with $13.8 million of such loans at March 31, 2014.  Early stage past due loans, representing loans 30-89 days past due, totaled $28.8 million at June 30, 2014 compared to $28.3 million at March 31, 2014.  

Included in nonaccrual loans at June 30, 2014 were $36.6 million of loans, or 56.7 percent of total nonaccrual loans, that were paying as agreed, compared with $44.2 million, or 57.0 percent of total nonaccrual loans, at March 31, 2014.  These loans were generally placed on nonaccrual status because the collateral values were less than the outstanding balances, and because of uncertainty as to whether the borrowers possessed adequate liquidity or would be able to generate sufficient cash flow to satisfy the debt given the short-fall in collateral values.  Such loans are generally deemed to be impaired, with a specific reserve established for the difference in the balance owed and the disposition value of the collateral.

Other real estate owned ("OREO") decreased $8.3 million to $55.3 million during the second quarter of 2014 from $63.6 million at March 31, 2014.  This net decrease reflected $4.1 million of OREO added through foreclosure, offset by sales of OREO of $10.3 million.  Write-downs in the value of existing properties were $2.2 million for the second quarter of 2014 compared to $1.8 million for the first quarter of 2014.  Sales of OREO during the second quarter of 2014 resulted in a net loss of $1.1 million compared to a net loss of $0.5 million for the first quarter of 2014.  At June 30, 2014, OREO was carried at 44.2 percent of the aggregate loan balances at the time of foreclosure, compared with 44.5 percent at March 31, 2014.

Noninterest Revenue

Noninterest revenue was $69.8 million for the second quarter of 2014, compared with $76.1 million for the second quarter of 2013 and $66.5 million for the first quarter of 2014.  These results included a negative mortgage servicing rights ("MSR") valuation adjustment of $2.1 million for the second quarter of 2014 compared with a positive MSR valuation adjustment of $5.3 million for the second quarter of 2013 and a negative MSR valuation adjustment of $1.5 million for the first quarter of 2014. 

Excluding the MSR valuation adjustments, net mortgage lending revenue was $11.2 million for the second quarter of 2014, compared with $12.6 million for the second quarter of 2013 and $4.9 million for the first quarter of 2014.  Mortgage origination volume for the second quarter of 2014 was $291.0 million, compared with $435.0 million for the second quarter of 2013 and $197.1 million for the first quarter of 2014.

Credit and debit card fee revenue was $8.6 million for the second quarter of 2014, compared with $8.3 million for the second quarter of 2013 and $7.8 million for the first quarter of 2014.  Deposit service charge revenue was $12.4 million for the second quarter of 2014, compared with $12.8 million for the second quarter of 2013 and $12.5 million for the first quarter of 2014.  Insurance commission revenue was $28.6 million for the second quarter of 2014, compared with $25.9 million for the second quarter of 2013 and $31.6 million for the first quarter of 2014. 

Noninterest Expense

Noninterest expense for the second quarter of 2014 was $128.0 million, compared with $142.3 million for the second quarter of 2013 and $126.7 million for the first quarter of 2014.  Salaries and employee benefits expense declined to $74.7 million for the second quarter of 2014 compared to $78.3 million for the second quarter of 2013 and $78.9 million for the first quarter of 2014.  Foreclosed property expense was $4.2 million for the second quarter of 2014 compared with $3.2 million for the second quarter of 2013 and $2.6 million for the first quarter of 2014.  Deposit insurance assessments were $2.0 million for the second quarter of 2014 compared to $2.9 million for the second quarter of 2013 and $1.6 million for the first quarter of 2014.  Noninterest expense for the second quarter of 2013 included a pre-tax charge of $10.9 million related to the Voluntary Early Retirement Program ("VERO").    

Capital Management

BancorpSouth is a "well capitalized" financial holding company, as defined by federal regulations, with Tier 1 risk-based capital of 13.09 percent at June 30, 2014 and total risk based capital of 14.35 percent, compared with required minimum levels of 6 percent and 10 percent, respectively, for "well capitalized" classification.  The Company's equity capitalization consists of 100 percent common stock.  BancorpSouth's ratio of shareholders' equity to assets was 12.24 percent at June 30, 2014, compared with 11.04 percent at June 30, 2013 and 11.83 percent at March 31, 2014.  The ratio of tangible shareholders' equity to tangible assets was 10.03 percent at June 30, 2014, compared with 9.04 percent at June 30, 2013 and 9.69 percent at March 31, 2014.

Transaction Closings and Announcements

On December 18, 2013, BancorpSouth Insurance Services, Inc. acquired the assets of Houston, Texas based GEM Insurance Agencies, LP ("GEM").  GEM was formed in 1954 and produces annual commission revenues of approximately $9 million.  As a part of the transaction, the Company's existing Houston office re-located into GEM's current office located at 3355 West Alabama Street in Houston.  The combined operations are expected to produce annual revenues of approximately $11 million.

On January 8, 2014, the Company announced the signing of a definitive merger agreement with Ouachita Bancshares Corp., parent company of Ouachita Independent Bank (collectively referred to as "OIB"), headquartered in Monroe, Louisiana, pursuant to which Ouachita Bancshares Corp. will be merged with and into the Company.  OIB operates 12 full-service banking offices along the I-20 corridor and has loan production offices in Madison, Mississippi and Natchitoches, Louisiana.  As of June 30, 2014, OIB, on a consolidated basis, reported total assets of $645.2 million, total loans of $484.6 million and total deposits of $538.3 million.  Under the terms of the definitive agreement, the Company will issue approximately 3,675,000 shares of the Company's common stock plus $22.875 million in cash for all outstanding shares of Ouachita Bancshares Corp.'s capital stock, subject to certain conditions and potential adjustments.  The terms of the amended agreement provide for a minimum total deal value of $107.5 million but also allow Ouachita Bancshares Corp. to terminate the agreement if the average closing price of the Company's common stock declines below a certain threshold prior to closing.  The merger has been unanimously approved by the Board of Directors of each company and was approved by OIB shareholders on April 8, 2014.  As previously discussed, the merger agreement has been extended to allow for additional time to obtain the necessary regulatory approvals and to satisfy all closing conditions.  The transaction is expected to close shortly after receiving all required regulatory approvals, though the Company can provide no assurance that the merger will close timely or at all.

On January 21, 2014, the Company announced the signing of a definitive merger agreement with Central Community Corporation, headquartered in Temple, Texas, pursuant to which Central Community Corporation will be merged with and into the Company.  Central Community Corporation is the parent company of First State Bank Central Texas ("First State Bank"), which is headquartered in Austin, Texas.  First State Bank operates 31 full-service banking offices in central Texas.  As of June 30, 2014, Central Community Corporation, on a consolidated basis, reported total assets of $1.4 billion, total loans of $562.0 million and total deposits of $1.1 billion.  Under the terms of the definitive agreement, the Company will issue approximately 7,250,000 shares of the Company's common stock plus $28.5 million in cash for all outstanding shares of Central Community Corporation's capital stock, subject to certain conditions and potential adjustments.  The terms of the amended agreement provide for a minimum total deal value of $191.0 million but also allow Central Community Corporation to terminate the agreement if the average closing price of the Company's common stock declines below a certain threshold prior to closing.  The merger has been unanimously approved by the Board of Directors of each company and was approved by Central Community Corporation shareholders on April 24, 2014.  As previously discussed, the merger agreement has been extended to allow for additional time to obtain the necessary regulatory approvals and to satisfy all closing conditions.  The transaction is expected to close shortly after receiving all required regulatory approvals, though the Company can provide no assurance that the merger will close timely or at all.

On April 9, 2014, BancorpSouth Insurance Services, Inc. acquired assets of Lafayette, Louisiana based Knox Insurance Group, LLC.  Knox was formed in 1972 and currently produces annual revenues of approximately $3 millionKnox will continue to operate under current leadership in Lafayette.

Summary

Rollins concluded, "While the delay in being able to close the two pending bank transactions is unfortunate, it does not impact our ability to continue to do the things internally that improve performance.  Our lending team continues to feed off the momentum they have built and our lines of business, including insurance, mortgage, and wealth management, continue to win new customers and grow revenue.  We have plenty of work to do internally and a lot of runway left to continue to improve performance while we await the required regulatory approvals to close the transactions." 

Conference Call

BancorpSouth will conduct a conference call to discuss its second quarter 2014 results on July 22, 2014, at 10:00 a.m. (Central Time).  Investors may listen via the Internet by accessing BancorpSouth's website at http://www.bancorpsouth.com.  A replay of the conference call will be available at BancorpSouth's website for at least two weeks following the call.

About BancorpSouth, Inc.

BancorpSouth, Inc. is a financial holding company headquartered in Tupelo, Mississippi, with $13.0 billion in assets.  BancorpSouth Bank, a wholly-owned subsidiary of BancorpSouth, Inc., operates 295 commercial banking, mortgage, and insurance locations in Alabama, Arkansas, Florida, Louisiana, Mississippi, Missouri, Tennessee and Texas, including an insurance location in Illinois.

Forward-Looking Statements

Certain statements contained in this news release may not be based upon historical facts and are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  These forward-looking statements may be identified by their reference to a future period or periods or by the use of forward-looking terminology such as "anticipate," "believe," "could," "estimate," "expect," "foresee," "intend," "may," "might," "plan," "will," or "would" or future or conditional verb tenses and variations or negatives of such terms. These forward-looking statements include, without limitation, statements relating to the terms, timing and closings of the proposed mergers with Ouachita Bancshares Corp. and Central Community Corporation, the Company's undertaking and performance of the necessary actions to remediate and fully resolve those concerns regarding the Company's procedures, systems and processes related to certain of its compliance programs, including its Bank Secrecy Act and anti-money-laundering programs, that have been identified by its federal bank regulators, the acceptance by customers of Ouachita Bancshares Corp. and Central Community Corporation of the Company's products and services if the proposed mergers close, non-accrual loans and any uncertainty regarding repayment, or determinations of impairment, of such non-accrual loans, revenue estimates for the Company's operations in Houston, Texas following the closing of the transaction with GEM, the retention of key personnel, Knox's continued operations and generation of revenues, the Company's opportunities to grow organically and through acquisitions, the Company's ability to enhance market share in existing markets and to gain acceptance of the Company generally in new markets, the Company's focus on and impact of cost-saving initiatives, the Company's ability to improve efficiency, trends in the Company's operating expenses, and the Company's use of non-GAAP financial measures.

The Company cautions you not to place undue reliance on the forward-looking statements contained in this news release in that actual results could differ materially from those indicated in such forward-looking statements because of a variety of factors.  These factors may include, but are not limited to, the ability of the Company to resolve to the satisfaction of its federal bank regulators those identified concerns regarding the Company's procedures, systems and processes related to certain of its compliance programs, including its Bank Secrecy Act and anti-money-laundering programs, the findings and results of the Consumer Financial Protection Bureau in its review of the Company's fair lending practices, the ability of the Company, Ouachita Bancshares Corp. and Central Community Corporation to obtain regulatory approval of and close the proposed mergers, the potential impact upon the Company of the delay in the closings, if any, of these proposed mergers, the ability of the Company to retain key personnel after the closings, if any, of these proposed mergers and the Knox acquisition, 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, losses resulting from the significant amount of the Company's other real estate owned, limitations on the Company's ability to declare and pay dividends, the impact of legal or administrative proceedings, the availability of capital on favorable terms if and when needed, liquidity risk, governmental regulation, including the Dodd Frank Act, and supervision of the Company's operations, the short-term and long-term impact of changes to banking capital standards on the Company's regulatory capital and liquidity, the impact of regulations on service charges on the Company's core deposit accounts, the susceptibility of the Company's business to local economic or 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 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 Company's ability to adapt its products and services to evolving industry standards and consumer preferences, competition with other financial services companies, risks in connection with completed or potential acquisitions, the Company's growth strategy, interruptions or breaches in the Company's information system security, the failure of certain third party vendors to perform, unfavorable ratings by rating agencies, dilution caused by the Company's issuance of any additional shares of its common stock to raise capital or acquire other banks, bank holding companies, financial holding companies and insurance agencies, 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 releases and filings with the Securities and Exchange Commission.  Forward-looking statements speak only as of the date that they were made, and, except as required by law, the Company does not undertake any obligation to update or revise forward-looking statements to reflect events or circumstances after the date of this news release. Unless otherwise noted, any quotes in this news release can be attributed to company management.

 

BancorpSouth, Inc.

Selected Financial Information

(Dollars in thousands, except per share data)

(Unaudited)














Quarter Ended

Quarter Ended

Quarter Ended

Quarter Ended

Quarter Ended


6/30/2014

3/31/2014

12/31/2013

9/30/2013

6/30/2013

Earnings Summary:






Interest revenue

$            111,499

$             110,599

$            112,510

$            111,961

$            112,009

Interest expense

8,418

9,076

10,093

11,720

13,796

Net interest revenue

103,081

101,523

102,417

100,241

98,213

Provision for credit losses

-

-

-

500

3,000

Net interest revenue, after provision for credit losses






103,081

101,523

102,417

99,741

95,213

Noninterest revenue

69,838

66,517

65,125

62,514

76,109

Noninterest expense

127,954

126,707

127,830

129,397

142,251

Income before income taxes

44,965

41,333

39,712

32,858

29,071

Income tax expense

14,097

12,889

12,014

8,001

8,316

Net income

$              30,868

$               28,444

$              27,698

$              24,857

$              20,755







Balance Sheet - Period End Balances






Total assets

$       12,985,887

$        13,143,555

$       13,029,733

$       12,916,153

$       13,217,705

Total earning assets

11,794,445

11,948,897

11,814,060

11,765,785

11,961,836

Total securities

2,332,192

2,426,758

2,466,989

2,554,156

2,644,939

Loans and leases, net of unearned income

9,311,661

9,068,376

8,958,015

8,773,115

8,678,714

Allowance for credit losses

147,132

149,704

153,236

153,974

161,047

Total deposits

10,670,414

10,811,790

10,773,836

10,717,946

10,961,618

Long-term debt

83,835

85,835

81,714

83,500

33,500

Total shareholders' equity

1,588,850

1,554,676

1,513,130

1,480,611

1,459,793







Balance Sheet - Average Balances






Total assets

$       12,933,879

$        13,087,128

$       12,955,127

$       12,928,505

$       13,146,040

Total earning assets

11,825,994

11,958,836

11,869,072

11,846,790

12,060,189

Total securities

2,394,045

2,452,178

2,511,888

2,598,786

2,616,274

Loans and leases, net of unearned income

9,232,743

9,022,155

8,830,917

8,682,966

8,588,673

Total deposits

10,650,077

10,825,308

10,739,352

10,745,945

10,938,489

Long-term debt

83,967

87,767

81,714

62,848

33,500

Total shareholders' equity

1,574,588

1,537,897

1,501,928

1,474,047

1,475,211







Nonperforming Assets:






Non-accrual loans and leases

$              64,533

$               77,531

$              92,173

$            121,353

$            149,542

Loans and leases 90+ days past due, still accruing

2,406

1,949

1,226

1,479

1,440

Restructured loans and leases, still accruing

6,712

13,776

27,007

21,502

16,953

Non-performing loans (NPLs)

73,651

93,256

120,406

144,334

167,935

Other real estate owned

55,253

63,595

69,338

76,853

88,438

Non-performing assets (NPAs)

$            128,904

$             156,851

$            189,744

$            221,187

$            256,373







Financial Ratios and Other Data:






Return on average assets

0.96%

0.88%

0.85%

0.76%

0.63%

Return on average shareholders' equity

7.86%

7.50%

7.32%

6.69%

5.64%

Return on tangible equity

9.74%

9.28%

9.16%

8.29%

7.12%

Pre-tax pre-provision return on average assets

1.39%

1.28%

1.22%

1.02%

0.98%

Non-interest income to average assets

2.17%

2.06%

1.99%

1.92%

2.32%

Non-interest expense to average assets

3.97%

3.93%

3.91%

3.97%

4.34%

Net interest margin-fully taxable equivalent

3.59%

3.54%

3.52%

3.45%

3.36%

Net interest rate spread

3.48%

3.43%

3.39%

3.32%

3.21%

Efficiency ratio (tax equivalent)

72.76%

74.16%

75.00%

78.11%

80.25%

Loan/deposit ratio

87.27%

83.87%

83.15%

81.85%

79.17%

Price to earnings mult (avg)

21.00

23.33

25.68

22.66

20.34

Market value to book value

148.53%

154.13%

160.04%

128.22%

115.42%

Market value to book value (avg)

143.72%

150.43%

143.60%

126.22%

107.59%

Market value to tangible book value

185.73%

192.80%

201.75%

159.52%

144.16%

Market value to tangible book value (avg)

179.72%

188.17%

181.04%

157.02%

134.39%

Headcount FTE

3,981

3,981

4,005

3,994

4,077













Credit Quality Ratios:






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

0.11%

0.16%

0.03%

0.35%

0.21%

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

0.00%

0.00%

0.00%

0.02%

0.14%

Allowance for credit losses to net loans and leases

1.58%

1.65%

1.71%

1.76%

1.86%

Allowance for credit losses to non-performing loans and leases

199.77%

160.53%

127.27%

106.68%

95.90%

Allowance for credit losses to non-performing assets

114.14%

95.44%

80.76%

69.61%

62.82%

Non-performing loans and leases to net loans and leases

0.79%

1.03%

1.34%

1.65%

1.94%

Non-performing assets to net loans and leases

1.38%

1.73%

2.12%

2.52%

2.95%







Equity Ratios:






Total shareholders' equity to total assets

12.24%

11.83%

11.61%

11.46%

11.04%

Tangible shareholders' equity to tangible assets

10.03%

9.69%

9.44%

9.43%

9.04%













Capital Adequacy:






Tier 1 capital

13.09%

13.18%

12.99%

13.25%

14.21%

Total capital

14.35%

14.44%

14.25%

14.50%

15.47%

Tier 1 leverage capital

10.33%

10.04%

9.93%

9.93%

10.58%

   Estimated for current quarter












Common Share Data:






Basic earnings per share

$                  0.32

$                   0.30

$                  0.29

$                  0.26

$                  0.22

Diluted earnings per share

0.32

0.30

0.29

0.26

0.22

Cash dividends per share

0.05

0.05

0.05

0.05

0.01

Book value per share

16.54

16.19

15.89

15.55

15.34

Tangible book value per share

13.23

12.95

12.60

12.50

12.28

Market value per share (last)

24.57

24.96

25.42

19.94

17.70

Market value per share (high)

25.55

26.24

25.54

20.77

18.06

Market value per share (low)

22.16

22.46

19.64

17.76

14.72

Market value per share (avg)

23.78

24.36

22.81

19.63

16.50

Dividend payout ratio

15.56%

16.80%

17.19%

19.15%

4.59%

Total shares outstanding

96,046,057

96,004,679

95,231,691

95,211,602

95,190,797

Average shares outstanding - basic

96,034,475

95,629,890

95,217,203

95,201,238

95,177,167

Average shares outstanding - diluted

96,373,121

95,952,611

95,644,383

95,519,318

95,405,965













Yield/Rate:






(Taxable equivalent basis)






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

4.38%

4.48%

4.52%

4.55%

4.62%

Available-for-sale securities:






  Taxable

1.45%

1.50%

1.51%

1.50%

1.55%

  Tax-exempt

5.44%

5.58%

5.52%

5.61%

5.47%

Short-term investments

0.24%

0.25%

0.25%

0.25%

0.25%

  Total interest earning assets and revenue

3.88%

3.85%

3.86%

3.85%

3.82%

Deposits:

0.28%

0.31%

0.34%

0.36%

0.39%

  Demand - interest bearing

0.17%

0.17%

0.18%

0.18%

0.21%

  Savings

0.12%

0.13%

0.13%

0.12%

0.14%

  Other time

0.97%

1.06%

1.13%

1.18%

1.23%

Short-term borrowings

0.09%

0.07%

0.07%

0.07%

0.07%

Total int bearing dep & s/t borrowings

0.37%

0.39%

0.43%

0.45%

0.48%

Junior subordinated debt

2.81%

2.86%

2.96%

6.57%

7.16%

Long-term debt

2.84%

2.91%

2.94%

3.19%

4.18%

  Total interest bearing liabilities and expense

0.40%

0.42%

0.46%

0.53%

0.61%

Interest bearing liabilities to interest earning assets

71.98%

73.51%

72.91%

74.15%

74.70%

Net interest tax equivalent adjustment

$                2,860

$                 2,823

$                2,893

$                2,905

$                2,931

 

BancorpSouth, Inc.

Consolidated Balance Sheets

(Unaudited)








Jun-14

Mar-14

Dec-13

Sep-13

Jun-13


(Dollars in thousands)

Assets






Cash and due from banks

$         201,196

$         199,214

$         208,961

$         199,464

$         268,647

Interest bearing deposits with other banks

44,949

390,896

319,462

361,401

526,608

Available-for-sale securities, at fair value

2,332,192

2,426,758

2,466,989

2,554,156

2,644,939

Loans and leases

9,347,429

9,103,850

8,993,888

8,806,392

8,711,023

  Less:  Unearned income

35,768

35,474

35,873

33,277

32,309

             Allowance for credit losses

147,132

149,704

153,236

153,974

161,047

Net loans and leases

9,164,529

8,918,672

8,804,779

8,619,141

8,517,667

Loans held for sale

105,643

62,867

69,593

77,114

111,574

Premises and equipment, net

310,515

314,367

315,260

314,441

313,079

Accrued interest receivable

40,697

42,666

42,150

43,034

41,425

Goodwill

291,498

286,800

286,800

275,173

275,173

Other identifiable intangibles

26,745

25,021

26,079

15,179

15,865

Bank owned life insurance

241,962

240,077

239,434

236,969

235,015

Other real estate owned

55,253

63,595

69,338

76,853

88,438

Other assets

170,708

172,622

180,888

143,228

179,275

Total Assets

$    12,985,887

$    13,143,555

$    13,029,733

$    12,916,153

$    13,217,705

Liabilities






Deposits:






  Demand:  Noninterest bearing

$      2,718,242

$      2,725,042

$      2,644,592

$      2,597,762

$      2,610,768

                  Interest bearing

4,511,760

4,583,481

4,582,450

4,493,359

4,667,041

  Savings

1,299,203

1,297,344

1,234,130

1,220,227

1,210,497

  Other time

2,141,209

2,205,923

2,312,664

2,406,598

2,473,312

Total deposits

10,670,414

10,811,790

10,773,836

10,717,946

10,961,618

Federal funds purchased and






    securities sold under agreement






    to repurchase

394,446

456,303

421,028

418,623

382,871

Short-term Federal Home Loan Bank borrowings






   and other short-term borrowing

2,000

-

-

-

-

Accrued interest payable

3,926

4,050

4,836

5,156

5,230

Junior subordinated debt securities

23,198

23,198

31,446

31,446

160,312

Long-term debt

83,835

85,835

81,714

83,500

33,500

Other liabilities

219,218

207,703

203,743

178,871

214,381

Total Liabilities

11,397,037

11,588,879

11,516,603

11,435,542

11,757,912

Shareholders' Equity






Common stock

240,118

240,012

238,079

238,029

237,976

Capital surplus

321,952

320,969

312,900

312,798

312,074

Accumulated other comprehensive loss

(15,040)

(22,060)

(29,959)

(39,389)

(39,333)

Retained earnings

1,041,820

1,015,755

992,110

969,173

949,076

Total Shareholders' Equity

1,588,850

1,554,676

1,513,130

1,480,611

1,459,793

Total Liabilities & Shareholders' Equity

$    12,985,887

$    13,143,555

$    13,029,733

$    12,916,153

$    13,217,705

 

BancorpSouth, Inc.

Consolidated Average Balance Sheets

(Unaudited)








Jun-14

Mar-14

Dec-13

Sep-13

Jun-13


(Dollars in thousands)

Assets






Cash and due from banks

$      157,813

$      168,056

$      163,948

$      163,322

$      160,615

Interest bearing deposits with other banks

145,530

449,207

471,695

487,075

765,729

Available-for-sale securities, at fair value

2,394,045

2,452,178

2,511,888

2,598,786

2,616,274

Loans and leases

9,269,469

9,058,081

8,864,983

8,715,894

8,621,849

  Less:  Unearned income

36,726

35,926

34,066

32,928

33,176

             Allowance for credit losses

149,676

153,615

153,443

160,609

163,252

Net loans and leases

9,083,067

8,868,540

8,677,474

8,522,357

8,425,421

Loans held for sale

53,676

35,297

54,572

77,964

89,513

Premises and equipment, net

313,012

315,804

315,174

312,724

313,147

Accrued interest receivable

38,291

39,336

39,665

39,354

39,317

Goodwill

293,082

286,800

279,091

275,173

275,173

Other identifiable intangibles

25,271

25,420

18,658

15,446

16,142

Bank owned life insurance

240,736

239,969

237,657

235,708

233,670

Other real estate owned

60,822

69,086

77,211

86,545

91,505

Other assets

128,534

137,435

108,094

114,051

119,534

Total Assets

$ 12,933,879

$ 13,087,128

$ 12,955,127

$ 12,928,505

$ 13,146,040

Liabilities






Deposits:






  Demand:  Noninterest bearing

$   2,683,939

$   2,647,376

$   2,667,667

$   2,551,812

$   2,522,577

                  Interest bearing

4,492,495

4,657,785

4,484,269

4,530,219

4,707,277

  Savings

1,298,829

1,260,838

1,224,588

1,216,599

1,208,454

  Other time

2,174,814

2,259,309

2,362,828

2,447,315

2,500,181

Total deposits

10,650,077

10,825,308

10,739,352

10,745,945

10,938,489

Federal funds purchased and






    securities sold under agreement






    to repurchase

435,505

458,436

469,245

441,807

399,789

Short-term Federal Home Loan Bank borrowings






   and other short-term borrowing

3,621

-

-

-

-

Accrued interest payable

3,926

4,400

5,051

5,391

5,481

Junior subordinated debt securities

23,198

23,748

31,446

86,074

160,312

Long-term debt

83,967

87,767

81,714

62,848

33,500

Other liabilities

158,997

149,572

126,391

112,393

133,258

Total Liabilities

11,359,291

11,549,231

11,453,199

11,454,458

11,670,829

Shareholders' Equity






Common stock

240,071

238,853

238,038

237,997

237,956

Capital surplus

321,628

314,117

312,835

312,349

311,480

Accumulated other comprehensive loss

(16,663)

(23,644)

(32,267)

(43,695)

(15,277)

Retained earnings

1,029,552

1,008,571

983,322

967,396

941,052

Total Shareholders' Equity

1,574,588

1,537,897

1,501,928

1,474,047

1,475,211

Total Liabilities & Shareholders' Equity

$ 12,933,879

$ 13,087,128

$ 12,955,127

$ 12,928,505

$ 13,146,040

 

BancorpSouth, Inc.

Consolidated Condensed Statements of Income

(Dollars in thousands, except per share data)

(Unaudited)
















Quarter Ended


Year Ended


Jun-14


Mar-14


Dec-13


Sep-13


Jun-13


Jun-14


Jun-13

INTEREST REVENUE:














Loans and leases

$    99,962


$   98,744


$     99,989


$    98,836


$   98,524


$ 198,706


$ 197,616

Deposits with other banks

87


276


299


310


483


363


1,085

Available-for-sale securities:














    Taxable

7,133


7,547


7,963


8,218


8,405


14,680


17,105

    Tax-exempt

3,669


3,715


3,810


3,866


3,911


7,384


7,871

Loans held for sale

648


317


449


731


686


965


1,359

        Total interest revenue

111,499


110,599


112,510


111,961


112,009


222,098


225,036















INTEREST EXPENSE:














Interest bearing demand

1,905


1,920


2,036


2,061


2,423


3,825


5,548

Savings

402


391


387


383


422


793


935

Other time

5,249


5,890


6,746


7,271


7,671


11,139


15,712

Federal funds purchased and securities sold under agreement to repurchase














80


78


84


80


70


158


133

Long-term debt

619


629


605


501


349


1,248


697

Junior subordinated debt

162


168


235


1,424


2,860


330


5,717

Other

1


-


-


-


1


1


3

        Total interest expense

8,418


9,076


10,093


11,720


13,796


17,494


28,745















        Net interest revenue

103,081


101,523


102,417


100,241


98,213


204,604


196,291

  Provision for credit losses

-


-


-


500


3,000


-


7,000

        Net interest revenue, after provision for credit losses














103,081


101,523


102,417


99,741


95,213


204,604


189,291















NONINTEREST REVENUE:














Mortgage lending

9,089


3,394


9,605


5,134


17,892


12,483


30,238

Credit card, debit card and merchant fees

8,567


7,843


8,324


8,834


8,324


16,410


15,847

Deposit service charges

12,437


12,536


13,570


13,679


12,824


24,973


25,656

Security gains (losses), net

5


(4)


29


(5)


3


1


22

Insurance commissions

28,621


31,599


21,397


23,800


25,862


60,220


52,503

Wealth Management

5,828


5,916


5,320


6,057


5,802


11,744


11,589

Other

5,291


5,233


6,880


5,015


5,402


10,524


11,572

        Total noninterest revenue

69,838


66,517


65,125


62,514


76,109


136,355


147,427















NONINTEREST EXPENSE:














Salaries and employee benefits

74,741


78,883


75,466


73,532


78,284


153,624


157,698

Occupancy, net of rental income

10,245


10,287


9,935


10,360


10,577


20,532


20,814

Equipment

4,169


4,499


4,298


4,555


4,585


8,668


9,533

Deposit insurance assessments

2,035


1,600


2,687


3,325


2,939


3,635


5,743

Voluntary early retirement expense

-


-


-


-


10,850


-


10,850

Write-off and amortization of bond issue cost

12


12


12


2,907


38


24


76

Other

36,752


31,426


35,432


34,718


34,978


68,178


72,908

        Total noninterest expenses

127,954


126,707


127,830


129,397


142,251


254,661


277,622

        Income before income taxes

44,965


41,333


39,712


32,858


29,071


86,298


59,096

Income tax expense

14,097


12,889


12,014


8,001


8,316


26,986


17,536

        Net income

$    30,868


$   28,444


$     27,698


$    24,857


$   20,755


$  59,312


$  41,560















Net income per share: Basic

$       0.32


$       0.30


$        0.29


$       0.26


$       0.22


$      0.62


$      0.44

                                    Diluted

$       0.32


$       0.30


$        0.29


$       0.26


$       0.22


$      0.62


$      0.44

 

BancorpSouth, Inc.

Selected Loan Data

(Dollars in thousands)

(Unaudited)












Quarter Ended


Jun-14


Mar-14


Dec-13


Sep-13


Jun-13

LOAN AND LEASE PORTFOLIO:










Commercial and industrial

$ 1,699,803


$ 1,581,251


$ 1,529,249


$ 1,503,809


$ 1,552,762

Real estate










   Consumer mortgages

2,071,503


2,047,001


1,976,073


1,931,171


1,880,338

   Home equity

506,988


498,283


494,339


490,361


482,068

   Agricultural

238,003


229,602


234,576


234,547


237,914

   Commercial and industrial-owner occupied

1,505,679


1,488,380


1,473,320


1,422,077


1,375,711

   Construction, acquisition and development

772,162


748,027


741,458


723,609


709,499

   Commercial real estate

1,901,759


1,847,983


1,846,039


1,795,352


1,754,841

Credit cards

109,186


105,988


111,328


105,112


103,251

All other

506,578


521,861


551,633


567,077


582,330

     Total loans

$ 9,311,661


$ 9,068,376


$ 8,958,015


$ 8,773,115


$ 8,678,714











ALLOWANCE FOR CREDIT LOSSES:










Balance, beginning of period

$   149,704


$   153,236


$    153,974


$   161,047


$   162,601











Loans and leases charged off:










Commercial and industrial

(860)


(201)


(837)


(889)


(1,008)

Real estate










   Consumer mortgages

(1,682)


(1,945)


(1,435)


(2,996)


(3,114)

   Home equity

(438)


(318)


(287)


(379)


(201)

   Agricultural

(18)


(696)


(238)


(169)


(327)

   Commercial and industrial-owner occupied

(936)


(1,206)


(1,041)


(1,684)


(830)

   Construction, acquisition and development

(41)


(1,666)


(1,784)


(1,727)


(2,036)

   Commercial real estate

(361)


(901)


(1,039)


(2,441)


(3,720)

Credit cards

(608)


(559)


(559)


(750)


(557)

All other

(671)


(583)


(1,108)


(837)


(462)

     Total loans charged off

(5,615)


(8,075)


(8,328)


(11,872)


(12,255)











Recoveries:










Commercial and industrial

359


1,076


1,361


820


747

Real estate










   Consumer mortgages

956


538


1,735


1,516


708

   Home equity

182


184


97


66


184

   Agricultural

26


9


34


48


120

   Commercial and industrial-owner occupied

78


358


734


297


1,439

   Construction, acquisition and development

808


1,637


2,483


953


360

   Commercial real estate

226


323


784


221


3,634

Credit cards

135


131


133


164


184

All other

273


287


229


214


325

     Total recoveries

3,043


4,543


7,590


4,299


7,701











Net charge-offs

(2,572)


(3,532)


(738)


(7,573)


(4,554)











Provision charged to operating expense

-


-


-


500


3,000

Balance, end of period

$   147,132


$   149,704


$    153,236


$   153,974


$   161,047











Average loans for period

$ 9,232,743


$ 9,022,155


$ 8,830,917


$ 8,682,966


$ 8,588,673











Ratio:










Net charge-offs to average loans (annualized)

0.11%


0.16%


0.03%


0.35%


0.21%











 

BancorpSouth, Inc.

Selected Loan Data

(Dollars in thousands)

(Unaudited)












Quarter Ended


Jun-14


Mar-14


Dec-13


Sep-13


Jun-13

NON-PERFORMING ASSETS










NON-PERFORMING LOANS AND LEASES:










  Nonaccrual Loans and Leases










    Commercial and industrial

$      2,917


$         3,023


$         3,079


$      5,498


$         6,225

    Real estate










       Consumer mortgages

24,355


24,353


25,645


30,569


34,226

       Home equity

2,116


2,740


3,695


3,287


3,862

       Agricultural

595


651


1,260


4,086


5,007

       Commercial and industrial-owner occupied

11,094


14,122


18,568


18,138


17,084

       Construction, acquisition and development

9,202


9,968


17,567


26,127


39,315

       Commercial real estate

13,406


21,496


20,972


31,468


40,940

    Credit cards

132


168


119


196


398

    All other

716


1,010


1,268


1,984


2,485

         Total nonaccrual loans and leases

$    64,533


$       77,531


$       92,173


$  121,353


$      149,542











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










    Commercial and industrial

$        302


$            287


$             27


$          15


$                -

    Real estate










       Consumer mortgages

1,607


1,307


888


1,178


1,107

       Home equity

116


12


-


-


-

       Agricultural

100


-


-


-


-

       Commercial and industrial-owner occupied

-


-


-


-


-

       Construction, acquisition and development

-


-


-


-


-

       Commercial real estate

-


-


311


-


120

    Credit cards

281


297


-


263


213

    All other

-


46


-


23


-

         Total loans and leases 90+ days past due, still accruing

2,406


1,949


1,226


1,479


1,440











  Restructured Loans and Leases, Still Accruing

6,712


13,776


27,007


21,502


16,953

     Total non-performing loans and leases

73,651


93,256


120,406


144,334


167,935











OTHER REAL ESTATE OWNED:

55,253


63,595


69,338


76,853


88,438











Total Non-performing Assets

$  128,904


$      156,851


$      189,744


$  221,187


$      256,373











Additions to Nonaccrual Loans and Leases During the Quarter

$    13,748


$       22,479


$       18,556


$    21,182


$       21,890











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










    Commercial and industrial

$      3,605


$         2,616


$         2,817


$      1,909


$         1,517

    Real estate










       Consumer mortgages

11,448


12,236


14,150


10,914


11,887

       Home equity

960


1,587


1,828


1,278


1,315

       Agricultural

1,122


302


495


761


569

       Commercial and industrial-owner occupied

6,340


3,248


4,081


1,995


1,323

       Construction, acquisition and development

1,616


2,848


1,993


3,920


1,835

       Commercial real estate

1,658


3,953


5,574


5,818


535

    Credit cards

556


592


655


688


668

    All other

1,490


963


2,189


1,634


1,591

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

$    28,795


$       28,345


$       33,782


$    28,917


$       21,240











Credit Quality Ratios:










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

0.00%


0.00%


0.00%


0.02%


0.14%

Allowance for credit losses to net loans and leases

1.58%


1.65%


1.71%


1.76%


1.86%

Allowance for credit losses to non-performing loans and leases

199.77%


160.53%


127.27%


106.68%


95.90%

Allowance for credit losses to non-performing assets

114.14%


95.44%


80.76%


69.61%


62.82%

Non-performing loans and leases to net loans and leases

0.79%


1.03%


1.34%


1.65%


1.94%

Non-performing assets to net loans and leases

1.38%


1.73%


2.12%


2.52%


2.95%

 

BancorpSouth, Inc.

Selected Loan Data

(Dollars in thousands)

(Unaudited)












Quarter Ended


Jun-14


Mar-14


Dec-13


Sep-13


Jun-13

REAL ESTATE CONSTRUCTION, ACQUISITION AND DEVELOPMENT ("CAD") PORTFOLIO:



















  Outstanding Balance










     Multi-family construction

$  15,874


$  11,339


$    7,702


$    7,974


$    8,902

     One-to-four family construction

226,252


221,790


224,286


203,988


202,603

     Recreation and all other loans

35,364


36,897


36,868


41,762


42,132

     Commercial construction

192,605


177,264


150,847


139,041


117,901

     Commercial acquisition and development

122,380


122,051


128,157


136,206


136,174

     Residential acquisition and development

179,687


178,686


193,598


194,638


201,787

         Total outstanding balance

$ 772,162


$ 748,027


$ 741,458


$ 723,609


$ 709,499











  Nonaccrual CAD Loans










     Multi-family construction

$           -


$           -


$           -


$           -


$           -

     One-to-four family construction

2,603


2,824


2,937


3,249


6,193

     Recreation and all other loans

981


919


728


782


800

     Commercial construction

-


-


865


1,686


2,765

     Commercial acquisition and development

1,835


2,224


6,890


11,150


14,225

     Residential acquisition and development

3,783


4,001


6,147


9,260


15,332

         Total nonaccrual CAD loans

$    9,202


$    9,968


$  17,567


$  26,127


$  39,315











  CAD Loans 90+ Days Past Due, Still Accruing:










     Multi-family construction

$           -


$           -


$           -


$           -


$           -

     One-to-four family construction

-


-


-


-


-

     Recreation and all other loans

-


-


-


-


-

     Commercial construction

-


-


-


-


-

     Commercial acquisition and development

-


-


-


-


-

     Residential acquisition and development

-


-


-


-


-

         Total CAD loans 90+ days past due, still accruing

$           -


$           -


$           -


$           -


$           -











  Restructured CAD Loans, Still Accruing










     Multi-family construction

$           -


$           -


$           -


$           -


$           -

     One-to-four family construction

-


-


1,274


1,028


867

     Recreation and all other loans

11


13


13


15


15

     Commercial construction

-


-


346


348


351

     Commercial acquisition and development

395


402


1,990


2,010


2,030

     Residential acquisition and development

700


1,192


3,111


3,162


3,458

         Total restructured CAD loans, still accruing

$    1,106


$    1,607


$    6,734


$    6,563


$    6,721











        Total Non-performing CAD loans

$  10,308


$  11,575


$  24,301


$  32,690


$  46,036











  CAD NPL as a % of Outstanding CAD Balance










     Multi-family construction

-


-


-


-


-

     One-to-four family construction

1.2%


1.3%


1.9%


2.1%


3.5%

     Recreation and all other loans

2.8%


2.5%


2.0%


1.9%


1.9%

     Commercial construction

0.0%


0.0%


0.8%


1.5%


2.6%

     Commercial acquisition and development

1.8%


2.2%


6.9%


9.7%


11.9%

     Residential acquisition and development

2.5%


2.9%


4.8%


6.4%


9.3%

         Total CAD NPL as a % of outstanding CAD balance

1.3%


1.5%


3.3%


4.5%


6.5%

 

BancorpSouth, Inc.





Selected Loan Data





(Dollars in thousands)





(Unaudited)




















June 30, 2014




Special












Pass


Mention


Substandard


Doubtful


Loss


Impaired


Total

LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE:














Commercial and industrial

$ 1,650,893


$       16,307


$       31,157


$            -


$                -


$    1,446


$ 1,699,803

Real estate














   Consumer mortgages

1,983,165


-


82,769


-


-


5,569


2,071,503

   Home equity

496,451


-


9,903


-


-


634


506,988

   Agricultural

224,337


509


12,724


-


-


433


238,003

   Commercial and industrial-owner occupied

1,435,618


3,782


61,508


342


-


4,429


1,505,679

   Construction, acquisition and development

721,572


255


43,238


576


-


6,521


772,162

   Commercial real estate

1,814,209


-


76,286


350


-


10,914


1,901,759

Credit cards

109,186


-


-


-


-


-


109,186

All other

495,292


-


11,104


-


-


182


506,578

     Total loans

$ 8,930,723


$       20,853


$      328,689


$      1,268


$                -


$  30,128


$ 9,311,661






























March 31, 2014




Special












Pass


Mention


Substandard


Doubtful


Loss


Impaired


Total

LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE:














Commercial and industrial

$ 1,535,172


$       13,043


$       31,741


$            -


$                -


$    1,295


$ 1,581,251

Real estate














   Consumer mortgages

1,936,837


243


104,486


310


-


5,125


2,047,001

   Home equity

483,746


343


13,456


96


-


642


498,283

   Agricultural

210,346


563


18,257


-


-


436


229,602

   Commercial and industrial-owner occupied

1,420,813


3,887


56,124


510


-


7,046


1,488,380

   Construction, acquisition and development

697,094


1,556


40,713


768


-


7,896


748,027

   Commercial real estate

1,757,573


-


71,374


198


-


18,838


1,847,983

Credit cards

105,988


-


-


-


-


-


105,988

All other

509,729


68


11,876


-


-


188


521,861

     Total loans

$ 8,657,298


$       19,703


$      348,027


$      1,882


$                -


$  41,466


$ 9,068,376

 

BancorpSouth, Inc.

Geographical Information

(Dollars in thousands)

(Unaudited)




















June 30, 2014


Alabama








Greater






Corporate




and Florida








Memphis




Texas and 


Banking




Panhandle


Arkansas*


Mississippi*


Missouri


Area


Tennessee*


Louisiana


and Other


Total

LOAN AND LEASE PORTFOLIO:


















Commercial and industrial

$   85,845


$   166,736


$   282,645


$  38,309


$     22,403


$     86,494


$   296,170


$   721,201


$  1,699,803

Real estate


















   Consumer mortgages

162,767


268,149


698,709


64,881


110,498


162,614


511,039


92,846


2,071,503

   Home equity

67,945


38,782


164,668


20,890


68,304


77,465


66,340


2,594


506,988

   Agricultural

7,338


71,448


56,598


3,399


13,826


12,260


68,723


4,411


238,003

   Commercial and industrial-owner occupied

175,413


168,289


479,599


64,571


90,239


90,953


301,538


135,077


1,505,679

   Construction, acquisition and development

109,801


67,822


199,662


19,013


77,028


110,705


164,969


23,162


772,162

   Commercial real estate

270,053


320,961


278,943


193,572


104,944


109,130


438,417


185,739


1,901,759

Credit cards

-


-


-


-


-


-


-


109,186


109,186

All other

29,996


43,696


133,041


3,428


37,399


35,431


75,109


148,478


506,578

     Total loans

$ 909,158


$ 1,145,883


$ 2,293,865


$ 408,063


$   524,641


$   685,052


$ 1,922,305


$ 1,422,694


$  9,311,661



















CAD PORTFOLIO:


















Multi-family construction

$     4,498


$         997


$         481


$           -


$             -


$       7,017


$       2,881


$             -


$       15,874

One-to-four family construction

36,251


17,170


43,795


3,823


12,530


68,413


43,466


804


226,252

Recreation and all other loans

1,361


6,260


12,139


568


4,440


1,125


9,471


-


35,364

Commercial construction

31,247


14,079


55,741


3,558


20,691


9,701


39,362


18,226


192,605

Commercial acquisition and development

10,560


15,963


35,821


5,429


17,865


8,369


27,524


849


122,380

Residential acquisition and development

25,884


13,353


51,685


5,635


21,502


16,080


42,265


3,283


179,687

     Total CAD loans

$ 109,801


$     67,822


$   199,662


$  19,013


$     77,028


$   110,705


$   164,969


$     23,162


$     772,162



















NON-PERFORMING LOANS AND LEASES:


















Commercial and industrial

$     1,294


$       1,063


$         397


$       172


$           18


$           32


$         260


$         565


$        3,801

Real estate


















   Consumer mortgages

1,716


1,701


7,904


382


2,748


2,577


2,258


7,377


26,663

   Home equity

531


104


352


-


268


422


553


2


2,232

   Agricultural

100


-


147


266


-


-


182


-


695

   Commercial and industrial-owner occupied

1,266


2,965


4,595


104


910


1,567


1,359


2


12,768

   Construction, acquisition and development

1,690


234


3,424


-


1,517


296


3,145


2


10,308

   Commercial real estate

3,656


63


1,946


646


3,354


3,718


656


877


14,916

Credit cards

-


-


-


-


-


-


-


1,456


1,456

All other

9


44


311


-


11


244


191


2


812

     Total loans

$   10,262


$       6,174


$     19,076


$    1,570


$       8,826


$       8,856


$       8,604


$     10,283


$       73,651



















NON-PERFORMING LOANS AND LEASES AS A PERCENTAGE OF OUTSTANDING:



































Commercial and industrial

1.51%


0.64%


0.14%


0.45%


0.08%


0.04%


0.09%


0.08%


0.22%

Real estate


















   Consumer mortgages

1.05%


0.63%


1.13%


0.59%


2.49%


1.58%


0.44%


7.95%


1.29%

   Home equity

0.78%


0.27%


0.21%


0.00%


0.39%


0.54%


0.83%


0.08%


0.44%

   Agricultural

1.36%


0.00%


0.26%


7.83%


0.00%


0.00%


0.26%


0.00%


0.29%

   Commercial and industrial-owner occupied

0.72%


1.76%


0.96%


0.16%


1.01%


1.72%


0.45%


0.00%


0.85%

   Construction, acquisition and development

1.54%


0.35%


1.71%


0.00%


1.97%


0.27%


1.91%


0.01%


1.33%

   Commercial real estate

1.35%


0.02%


0.70%


0.33%


3.20%


3.41%


0.15%


0.47%


0.78%

Credit cards

-


-


-


-


-


-


-


1.33%


1.33%

All other

0.03%


0.10%


0.23%


0.00%


0.03%


0.69%


0.25%


0.00%


0.16%

     Total loans

1.13%


0.54%


0.83%


0.38%


1.68%


1.29%


0.45%


0.72%


0.79%





































*Excludes the Greater Memphis Area.












 

BancorpSouth, Inc.

Selected Additional Information

(Dollars in thousands)

(Unaudited)




















June 30, 2014


Alabama








Greater










and Florida








Memphis




Texas and 






Panhandle


Arkansas*


Mississippi*


Missouri


Area


Tennessee*


Louisiana


Other


Total

OTHER REAL ESTATE OWNED:


















Commercial and industrial

$          84


$                -


$                -


$            -


$                -


$             -


$           -


$           -


$          84

Real estate


















   Consumer mortgages

979


223


1,999


29


34


83


5


-


3,352

   Home equity

-


-


370


-


-


-


-


-


370

   Agricultural

-


-


216


-


462


-


-


-


678

   Commercial and industrial-owner occupied

-


33


2,543


-


824


-


60


-


3,460

   Construction, acquisition and development

11,084


91


10,286


794


17,739


3,283


239


-


43,516

   Commercial real estate

352


288


1,893


-


980


-


-


-


3,513

All other

-


-


148


-


-


38


94


-


280

     Total loans

$    12,499


$            635


$       17,455


$        823


$       20,039


$      3,404


$       398


$           -


$    55,253




















Quarter Ended










Jun-14


Mar-14


Dec-13


Sep-13


Jun-13









OTHER REAL ESTATE OWNED:


















Balance, beginning of period

$    63,595


$       69,338


$       76,853


$    88,438


$       96,314









Additions to foreclosed properties


















   New foreclosed property

4,144


4,855


7,868


9,536


9,639









Reductions in foreclosed properties


















   Sales

(10,269)


(8,767)


(14,272)


(19,333)


(15,641)









   Writedowns

(2,217)


(1,831)


(1,111)


(1,788)


(1,874)









Balance, end of period

$    55,253


$       63,595


$       69,338


$    76,853


$       88,438



























FORECLOSED PROPERTY EXPENSE


















Loss (gain) on sale of other real estate owned

$      1,073


$            466


$            949


$        352


$            166









Writedown of other real estate owned

2,217


1,831


1,111


1,788


1,874









Other foreclosed property expense

912


258


771


1,158


1,205









Total foreclosed property expense

$      4,202


$         2,555


$         2,831


$      3,298


$         3,245













































*Excludes the Greater Memphis Area.











 

BancorpSouth, Inc.

Noninterest Revenue and Expense

(Dollars in thousands)

(Unaudited)












Quarter Ended


Jun-14


Mar-14


Dec-13


Sep-13


Jun-13

NONINTEREST REVENUE:










Mortgage lending

$      9,089


$         3,394


$         9,605


$      5,134


$       17,892

Credit card, debit card and merchant fees

8,567


7,843


8,324


8,834


8,324

Deposit service charges

12,437


12,536


13,570


13,679


12,824

Securities gains (losses), net

5


(4)


29


(5)


3

Insurance commissions

28,621


31,599


21,397


23,800


25,862

Trust income

3,624


3,568


3,717


3,332


3,192

Annuity fees

695


772


566


719


543

Brokerage commissions and fees

1,509


1,576


1,037


2,005


2,068

Bank-owned life insurance

1,885


1,849


2,466


1,954


2,008

Other miscellaneous income

3,406


3,384


4,414


3,062


3,393

     Total noninterest revenue

$    69,838


$       66,517


$       65,125


$    62,514


$       76,109











NONINTEREST EXPENSE:










Salaries and employee benefits

$    74,741


$       78,883


$       75,466


$    73,532


$       78,284

Occupancy, net of rental income

10,245


10,287


9,935


10,360


10,577

Equipment

4,169


4,499


4,298


4,555


4,585

Deposit insurance assessments

2,035


1,600


2,687


3,325


2,939

Voluntary early retirement expense

-


-


-


-


10,850

Amortization of bond issue cost

12


12


12


2,907


38

Advertising

1,331


632


1,436


1,210


1,169

Foreclosed property expense

4,202


2,555


2,831


3,298


3,245

Telecommunications

2,258


2,248


1,971


2,227


2,184

Public relations

857


822


972


1,105


1,175

Data processing

2,863


2,741


2,939


2,772


2,783

Computer software

2,851


2,423


2,197


2,190


2,146

Amortization of intangibles

1,148


1,058


819


686


722

Legal

3,002


1,878


2,537


4,626


3,896

Merger expense

1,009


560


-


-


-

Postage and shipping

1,116


1,287


1,133


1,027


1,074

Other miscellaneous expense

16,115


15,222


18,597


15,577


16,584

Total noninterest expense

$  127,954


$      126,707


$      127,830


$  129,397


$      142,251











INSURANCE COMMISSIONS:










Property and casualty commissions

$    21,576


$       19,987


$       15,588


$    18,372


$       18,762

Life and health commissions

5,549


5,010


4,525


4,061


5,093

Risk management income

617


705


648


628


573

Other

879


5,897


636


739


1,434

Total insurance commissions

$    28,621


$       31,599


$       21,397


$    23,800


$       25,862

 

BancorpSouth, Inc.

Selected Additional Information

(Dollars in thousands)

(Unaudited)












Quarter Ended


Jun-14


Mar-14


Dec-13


Sep-13


Jun-13

MORTGAGE SERVICING RIGHTS:










Fair value, beginning of period

$     53,436


$       54,662


$       51,025


$     49,001


$       41,478

Additions to mortgage servicing rights:










   Originations of servicing assets

2,565


1,460


1,984


3,826


4,012

Changes in fair value:










   Due to payoffs/paydowns

(1,616)


(1,138)


(1,240)


(1,560)


(1,739)

   Due to change in valuation inputs or










     assumptions used in the valuation model

(2,111)


(1,547)


2,894


(240)


5,252

   Other changes in fair value

(2)


(1)


(1)


(2)


(2)

Fair value, end of period

$     52,272


$       53,436


$       54,662


$     51,025


$       49,001











MORTGAGE LENDING REVENUE:










Origination

$       8,758


$         1,964


$         3,590


$       2,862


$       10,471

Servicing

4,058


4,115


4,361


4,072


3,908

MSR payoffs/paydowns

(1,616)


(1,138)


(1,240)


(1,560)


(1,739)

MSR valuation adjustment

(2,111)


(1,547)


2,894


(240)


5,252

Total mortgage lending revenue

$       9,089


$         3,394


$         9,605


$       5,134


$       17,892











Mortgage loans serviced

$ 5,630,192


$   5,568,828


$   5,577,325


$ 5,543,619


$   5,393,580

MSR/mtg loans serviced

0.93%


0.96%


0.98%


0.92%


0.91%











AVAILABLE-FOR-SALE SECURITIES, at fair value










U.S. Government agencies

$ 1,333,368


$   1,419,269


$   1,458,349


$ 1,519,459


$   1,581,570

Government agency issued residential










   mortgage-back securities

229,414


241,596


250,234


268,367


292,586

Government agency issued commercial










   mortgage-back securities

237,321


234,059


230,912


229,412


227,381

Obligations of states and political subdivisions

520,897


523,811


519,405


528,889


535,337

Other

11,192


8,023


8,089


8,029


8,065

Total available-for-sale securities

$ 2,332,192


$   2,426,758


$   2,466,989


$ 2,554,156


$   2,644,939

 

BancorpSouth, Inc.

Reconciliation of Non-GAAP Measures

(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 tangible shareholders' equity to tangible assets, return on tangible equity, pre-tax pre-provision return on average assets, tangible book value per share, and operating earnings per share.  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 operating performance, (ii) presents a 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 Pre-tax, Pre-provision Earnings and Net Operating Income:


















Quarter ended




6/30/2014


3/31/2014


12/31/2013


9/30/2013


6/30/2013













Net income


$       30,868


$       28,444


$       27,698


$       24,857


$       20,755

Plus:

Provision for credit losses

-


-


-


500


3,000


Income tax expense

14,097


12,889


12,014


8,001


8,316

Pre-tax, pre-provision earnings

$       44,965


$       41,333


$       39,712


$       33,358


$       32,071













Net income


$       30,868


$       28,444


$       27,698


$       24,857


$       20,755

Plus:

Merger expense, net of tax

626


347


-


-


-


VERO expense, net of tax

-


-


-


-


6,727


Legal charge, net of tax

-


-


-


1,085


-


Write off unamortized TRUPS issue cost, net of tax

-


-


-


1,789


-

Net operating income


$       31,494


$       28,791


$       27,698


$       27,731


$       27,482














Reconciliation of Tangible Assets and Tangible Shareholders' Equity to 



Total Assets and Total Shareholders' Equity:




















Quarter ended




6/30/2014


3/31/2014


12/31/2013


9/30/2013


6/30/2013

Tangible assets











Total assets


$ 12,985,887


$ 13,143,555


$ 13,029,733


$ 12,916,153


$ 13,217,705

Less:  

Goodwill

291,498


286,800


286,800


275,173


275,173


Other identifiable intangible assets

26,745


25,021


26,079


15,179


15,865

Total tangible assets

$ 12,667,644


$ 12,831,734


$ 12,716,854


$ 12,625,801


$ 12,926,667













Tangible shareholders' equity










Total shareholders' equity

$  1,588,850


$  1,554,676


$  1,513,130


$  1,480,611


$  1,459,793

Less:

Goodwill

291,498


286,800


286,800


275,173


275,173


Other identifiable intangible assets

26,745


25,021


26,079


15,179


15,865

Total tangible shareholders' equity

$  1,270,607


$  1,242,855


$  1,200,251


$  1,190,259


$  1,168,755













Total average assets

$ 12,933,879


$ 13,087,128


$ 12,955,127


$ 12,928,505


$ 13,146,040

Total common shares outstanding

96,046,057


96,004,679


95,231,691


95,211,602


95,190,797

Average shares outstanding-diluted

96,373,121


95,952,611


96,644,383


95,519,318


95,405,965













Tangible shareholders' equity to tangible assets*

10.03%


9.69%


9.44%


9.43%


9.04%

Return on tangible equity **

9.74%


9.28%


9.16%


8.29%


7.12%

Pre-tax pre-provision return on average assets ***

1.39%


1.28%


1.22%


1.02%


0.98%

Tangible book value per share****

$        13.23


$        12.95


$        12.60


$        12.50


$        12.28

Operating earnings per share*****

$          0.33


$          0.30


$          0.29


$          0.29


$          0.29

























*

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.













**

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













***

Pre-tax pre-provision return on average assets is defined by the Company as annualized pre-tax pre-provision earnings divided by total average assets.













****

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













*****

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













 

SOURCE BancorpSouth, Inc.