BancorpSouth, Inc. Announces Financial Results For The Second Quarter And First Six Months of 2003
PRNewswire-FirstCall
TUPELO, Miss.

BancorpSouth, Inc. today announced that net income for the second quarter of 2003 was $29.2 million, a 5.5 percent decrease from $30.9 million for the second quarter of 2002. Net income per basic share for the second quarter of 2003 was even with the second quarter of 2002, at $0.38 for both quarters, while net income per diluted share was $0.37, 2.6 percent below the $0.38 earned for the second quarter of 2002.

Net income increased 13.4 percent for the first six months of 2003, to $68.4 million from $60.3 million for the first half of 2002. Net income per basic and diluted share rose 18.9 percent for the first six months of 2003 to $0.88 from $0.74 for the comparable period in 2002.

Aubrey Patterson, BancorpSouth's Chairman and Chief Executive Officer, commented, "BancorpSouth's second quarter results clearly demonstrate the strategic importance of its successful multi-year effort to build its non- interest revenue streams. Strong growth in mortgage lending fees for the quarter combined with substantial increases in service charges, insurance commissions and other fee income to drive a 30.8 percent increase in non- interest revenue, essentially offsetting the effect of an anticipated decline in net interest revenue that resulted from lower interest rates and reduced loan activity in a difficult economic environment. Our commitment to this strategy to diversify our revenue streams was again evident in the second quarter with the announcement of our acquisition of Wright & Percy Insurance of Baton Rouge, Louisiana's oldest and largest independent insurance agency, which is our fourth insurance-company acquisition in four years. Earlier this week, on July 14, we reinforced our commitment to this strategy with the announcement of our agreement to merge with Ramsey, Krug, Farrell & Lensing, Inc. of Little Rock, Arkansas, one of Arkansas' leading insurance agencies. The continued implementation of this strategy has not only reduced the impact of interest rate volatility on BancorpSouth's financial results, but it has also enabled the Company to develop a much more comprehensive array of financial services with which to serve its growing retail and small-to-mid- sized business customer base.

"As in previous quarters, our non-interest revenue results reflect the impact of interest rate movements on our mortgage servicing asset. For the second quarter of 2003, our results include a provision for the impairment of the mortgage servicing asset, which is a non-cash charge related to the decline in mortgage interest rates, of $4.7 million, or $0.04 per diluted share after tax. Net securities gains for the second quarter of 2003 totaled $180,000. For the second quarter of 2002, the results include a provision for the impairment of the mortgage servicing asset of $4.2 million, or $0.03 per diluted share after tax, and net securities gains of $2.9 million, or $0.02 per diluted share after tax."

Net Interest Revenue

Interest revenue was $133.2 million for the second quarter of 2003, down 10.5 percent from $148.8 million for the second quarter of 2002 and 3.3 percent from $137.7 million for the first quarter of 2003. Interest expense declined 15.7 percent to $46.1 million for the second quarter from $54.7 million for the second quarter last year and 3.0 percent from $47.5 million for the first quarter of 2003.

The average taxable equivalent yield on earning assets for the second quarter of 2003 decreased to 5.68 percent from 6.63 percent for the comparable quarter in 2002 and 6.00 percent for the first quarter of 2003. The average rate paid on interest-bearing liabilities for the second quarter of 2003 fell to 2.26 percent from 2.80 percent for the second quarter of 2002 and 2.36 percent for the first quarter of 2003.

Net interest revenue was $87.1 million for the second quarter of 2003, a decrease of 7.5 percent from $94.1 million for the second quarter of 2002 and 3.4 percent from $90.1 million for the first quarter of 2003. Net interest margin was 3.75 percent for the second quarter of 2003, compared with 4.24 percent for the second quarter of 2002 and 3.97 percent for the first quarter of the current year.

Patterson added, "Declining interest rates in the second quarter continued to contribute to the reduction of BancorpSouth's net interest margin. In addition, as discussed in our first-quarter earnings release, the securities sale undertaken in the first quarter to narrow the interest sensitivity gap between maturing assets and liabilities also produced pressure on the net interest margin, as anticipated in a declining rate environment. While we constantly manage our assets and liabilities to limit our exposure to changing interest rates, we have actively sought to better position the Company to take advantage of rising interest rates when they occur, in spite of the short-term impact on the net interest margin. Having experienced the impact of many interest rate cycles, we stand by this more conservative posture, which we believe is consistent with our goals for long-term growth in shareholder value."

Deposit and Loan Activity

Total assets at June 30, 2003 increased 6.6 percent to $10.6 billion from $9.9 billion at June 30, 2002. Total deposits were $8.7 billion at June 30, 2003, a 5.6 percent increase from $8.3 billion at the end of the second quarter of 2002. Total loans of $6.3 billion at June 30, 2003 fell 0.7 percent from $6.3 billion at June 30, 2002.

"Like the banking industry as a whole, our loan activity for the second quarter reflects the continued listless economic environment in both our regional and the national markets," said Patterson. "Because of the geographic and business mix diversification we enjoy throughout our six-state market, we are confident that we remain well positioned to participate in improved loan activity that we would expect to accompany an improvement in the economic environment. We also continue to be encouraged by the growth in market share evidenced by the 5.6 percent expansion of our total deposits. Within this total, non-interest bearing deposits grew 17.5 percent for the second quarter, which represents the second consecutive quarter of double-digit percentage growth for this low-cost source of funds."

Provision for Credit Losses and Allowance for Credit Losses

The provision for credit losses for the second quarter of 2003 declined on both a comparable-quarter and sequential-quarter basis for the second consecutive quarter. For the latest quarter, the provision of $6.5 million fell 10.3 percent from $7.2 million for the second quarter of 2002 and 0.8 percent from $6.5 million for the first quarter of 2003. Annualized net charge-offs were 0.31 percent of average loans for the latest quarter, versus 0.39 percent for the comparable quarter in 2002 and 0.30 percent for the first quarter of 2003.

Non-performing loans at June 30, 2003 totaled $45.2 million, or 0.72 percent of loans, compared with $40.9 million, or 0.65 percent of loans, at June 30, 2002, and $40.2 million, or 0.64 percent of loans at the end of the first quarter of 2003. The allowance for credit losses at June 30, 2003, was 1.45 percent of loans, up from 1.36 percent at June 30, 2002 and 1.43 percent at March 31, 2003.

Patterson stated, "We remain pleased with BancorpSouth's credit quality as we enter the second half of 2003. As expected, the lack of material growth in the economy is a significant factor in the increase in our non-performing loans during the second quarter. However, through diligent efforts to salvage these assets, we reduced annualized charge-offs for the quarter compared with the second quarter of last year. This reduction, in turn, strengthened our allowance for credit losses compared with both the second quarter of 2002 and the first quarter of 2003, even as we reduced our provision for credit losses for the third consecutive quarter.

"We attribute BancorpSouth's strong credit quality to a conservative lending and credit philosophy that is an essential part of the foundation of this organization. Because the traditional banking industry is affected so directly by the economic cycle, we firmly believe that a key to long-term prosperity is a fully engaged loan review function that implements this conservative philosophy aggressively. While confident that adherence to this policy costs us some incremental business in the stronger part of the economic cycle, we are equally confident that, after two years of economic softness, it is accountable for our continued strong credit quality."

Non-Interest Revenue

Non-interest revenue increased 30.8 percent to $42.9 million for the second quarter of 2003 from $32.8 million for the second quarter of 2002 and decreased 22.0 percent from $55.0 million for the first quarter of 2003. In addition to the net securities gains and impairment provisions discussed above for the second quarter of 2003 and 2002, these results include net securities gains for the first quarter of 2003 of $13.6 million, as well as a reversal of previously recorded impairment charges for the first quarter of 2003 of $0.8 million.

The strong growth in revenue from mortgage loan originations for the second quarter of 2003 resulted from the continued low mortgage interest rates during the quarter. Because of this environment, BancorpSouth's mortgage loan originations for the second quarter of 2003 grew 120.8 percent to $392.8 million from $177.9 million for the second quarter of 2002, and its mortgage servicing portfolio expanded to $2.8 billion at June 30, 2003, from $2.6 billion at June 30, 2002.

Non-interest revenue for the second quarter of 2003 also reflected 28.9 percent growth in service charges, to $16.2 million for the latest quarter from $12.6 million for the second quarter last year, as well as 41.2 percent growth in insurance commissions, to $8.3 million from $5.9 million, and 40.3 percent growth in other non-interest revenue, to $11.0 million from $7.8 million.

"The growth in non-interest revenue to nearly half the size of net interest revenue for the second quarter of 2003, up from 34.9 percent of net interest revenue for the second quarter of 2002, has contributed substantially to the profitability of BancorpSouth," continued Patterson. "We expect the expansion of our mortgage servicing portfolio at historically low interest rates will create future benefits as well, not only through the reduction of pre-payment risk for mortgages within the portfolio, but also through the new and expanded customer relationships the growth in mortgage originations has produced. We intend to market a full array of traditional banking products to these customers, as well as our growing portfolio of non-interest revenue products, such as deposit, insurance, cash management and investment brokerage products and services."

Non-Interest Expense

Non-interest expense increased 9.1 percent for the second quarter of 2003 to $81.3 million from $74.6 million for the second quarter of 2002. The substantial majority of this increase occurred in salaries and employee benefits, primarily due to commissions related to increased mortgage loan originations. Equipment, telecommunications and other expenses declined on a comparable-quarter and sequential-quarter basis with the completion of initiatives to improve operating efficiency.

Capital Management

During the second quarter of 2003, BancorpSouth did not repurchase any shares of its common stock under any of its stock repurchase plans. At the end of the second quarter of 2003, approximately 231,000 shares of common stock remained available for repurchase under the plan authorized in February 2002 for the repurchase of up to 4.1 million shares. Additionally, in April 2003, the Company's Board of Directors authorized a new plan, under which the Company may repurchase up to an additional 3.9 million shares. No shares have been repurchased under this recently adopted plan. Combined with the shares repurchased under a separate 4.2 million share plan authorized in March 2001 that was completed in 2002, the Company has repurchased approximately 8.1 million shares of its common stock as of June 30, 2003, or 9.6 percent of its outstanding shares at March 31, 2001. BancorpSouth will continue to evaluate additional share repurchases under the February 2002 and April 2003 plans, which authorize these repurchases during an eighteen-month and two-year period, respectively.

Summary

Mr. Patterson concluded, "The latest stock repurchase plan authorized by the Board of Directors is a clear indication of its confidence in the growth potential of BancorpSouth. This confidence is based on the continuing efforts of a highly experienced management team and employees throughout BancorpSouth, who have demonstrated their ability to produce long-term growth in shareholder value. Through these efforts, BancorpSouth occupies a unique competitive position in its six-state market, which is based on its commitment to provide "community bank" customer service supported by the product and systems sophistication of one of the country's 50 largest banking organizations. In addition to traditional banking services, we have decisively positioned BancorpSouth to pursue a growing non-interest revenue opportunity, and we have enhanced our ability to scale our operations profitably through a substantial level of back office centralization. We have consistently proven our ability to expand market share through both internal growth and accretive acquisitions, even as we maintain a conservative lending posture and strong credit quality. As a result, we believe BancorpSouth is well positioned to weather the current economic uncertainty and, through the consistent implementation of its long-term growth strategies, produce further gains in shareholder value."

Conference Call

BancorpSouth will conduct a conference call with analysts at 2:30 p.m. (Central Time) on July 17, 2003. 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 a least two weeks following the call.

BancorpSouth, Inc. is a bank holding company headquartered in Tupelo, Mississippi with approximately $10.6 billion in assets. BancorpSouth operates approximately 250 commercial banking, insurance, trust, broker/dealer and consumer finance locations in Alabama, Arkansas, Louisiana, Mississippi, Tennessee and Texas.

Forward-Looking Statements

Certain statements contained in this news release may not be based on 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," "estimate," "expect," "may," "might," "will," "would," "could" or "intend." These forward-looking statements include, without limitation, those relating to the acquisition of Ramsey, Krug, Farrell & Lensing, interest rates, loan volume, credit quality, expansion of mortgage servicing portfolio and resulting benefits, net interest margin, non-interest revenue, ability to scale operations profitably through back office centralization, market share, expansion and prospects of products and services, internal growth and acquisitions, common stock repurchase plan, shareholder value and BancorpSouth's future growth and profitability.

We caution 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, due to a variety of factors. Those factors include, but are not limited to, the inability to complete the acquisition of Ramsey, Krug, Farrell & Lensing, changes in economic conditions and government fiscal and monetary policies, fluctuations in prevailing interest rates, the ability to maintain credit quality, the ability of BancorpSouth to reduce interest rates paid on deposits as interest rates decline or stabilize, changes in laws and regulations affecting financial institutions in general, possible adverse rulings, judgments, settlements and other outcomes of pending litigation, the ability of BancorpSouth to compete with other financial services companies, the ability of BancorpSouth to provide competitive services and products, changes in BancorpSouth's operating or expansion strategy, geographic concentration of BancorpSouth's assets, availability of and costs associated with obtaining adequate and timely sources of liquidity, the ability of BancorpSouth to attract, train and retain qualified personnel, the ability of BancorpSouth to effectively market its services and products, the ability of BancorpSouth to repurchase its common stock on favorable terms, the ability of BancorpSouth to identify potential acquisitions, changes in consumer preferences, other factors generally understood to affect the financial results of financial services companies, and other factors described from time to time in BancorpSouth's filings with the Securities and Exchange Commission. We undertake no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made.

  Selected Financial Data
                              Three Months Ended        Six Months Ended
                                   June 30,                 June 30,
                               2003         2002        2003         2002
  (Dollars in thousands,
   except per share
   amounts)
  Earnings Summary:
  Net interest revenue         $87,069     $94,083     $177,213    $186,510
  Provision for credit
   losses                        6,472       7,215       12,994      13,975
  Non-interest revenue          42,915      32,818       97,932      67,749
  Non-interest expense          81,333      74,574      160,956     151,746
  Income before income
   taxes                        42,179      45,112      101,195      88,538
  Income tax provision          12,938      14,185       32,806      28,214
  Net income                   $29,241     $30,927      $68,389     $60,324
  Earnings per share:
   Basic                         $0.38       $0.38        $0.88       $0.74
  Diluted                        $0.37       $0.38        $0.88       $0.74

  Balance sheet data at
   June 30:
  Total assets                                      $10,576,453  $9,923,525
  Total earning assets                                9,763,679   9,257,974
  Loans and lease
   receivables, net of
   unearned discount                                  6,301,110   6,344,219
  Allowance for credit
   losses                                                91,210      86,276
  Total deposits                                      8,714,072   8,255,559
  Common shareholders'
   equity                                               857,868     830,801
  Book value per share                                    11.00       10.28


  Average balance sheet
   data:
  Total assets             $10,287,130  $9,818,001  $10,239,601  $9,706,035
  Total earning assets       9,592,723   9,187,581    9,543,975   9,078,189
  Loans and lease
   receivables, net of
   unearned discount         6,289,079   6,276,605    6,318,286   6,209,820
  Total deposits             8,628,134   8,165,640    8,594,256   8,083,731
  Common shareholders'
   equity                      832,443     819,941      824,221     813,484

  Non-performing assets at
   June 30:
  Non-accrual loans                                     $18,230     $12,166
  Loans 90+ days past due                                26,954      28,755
  Restructured loans                                         14          22
  Other real estate owned                                15,065      18,798

  Net charge-offs as a
   percentage
       of average loans
        (annualized)             0.31%       0.39%        0.31%       0.39%

  Performance ratios
   (annualized)
  Return on average assets       1.14%       1.26%        1.35%       1.25%
  Return on common equity       14.09%      15.13%       16.73%      14.95%

  Net interest margin            3.75%       4.24%        3.86%       4.27%

  Average shares
   outstanding - diluted    78,013,329  81,498,916   77,935,346  81,589,600



                             BancorpSouth, Inc.
                         Consolidated Balance Sheets
                           (dollars in thousands)
                                 (Unaudited)

                                          June 30,      June 30,
                                            2003         2002       % Chg
                 Assets
  Cash & due from banks                     $393,390     $303,599    29.6%
  Interest bearing deposits with
    other banks                                5,059       12,108   (58.2%)
  Held-to-maturity securities              1,552,070    1,223,435    26.9%
  Available-for-sale securities            1,723,766    1,115,762    54.5%
  Federal funds sold and securities
    purchased under agreement
      to resell                               94,999      518,727   (81.7%)
  Loans & leases                           6,301,110    6,344,219    (0.7%)
       Allowance for credit losses           (91,210)     (86,276)    5.7%
    Net loans & leases                     6,209,900    6,257,943    (0.8%)
  Mortgages held for sale                     86,676       43,723    98.2%
  Bank premises & equipment                  209,746      211,451    (0.8%)
  Accrued interest receivable                 76,015       79,524    (4.4%)
  Other real estate owned                     15,065       18,295   (17.7%)
  Other assets                               209,767      138,958    51.0%
       Total assets                      $10,576,453   $9,923,525     6.6%
               Liabilities
  Demand deposits:
    Non-interest bearing                  $1,287,846   $1,096,257    17.5%
    Interest bearing                       2,463,010    2,306,227     6.8%
    Total demand deposits                  3,750,856    3,402,484    10.2%
  Savings & time deposits:
    Savings                                  797,880      851,714    (6.3%)
    Certificates of deposit                4,165,336    4,001,361     4.1%
    Total savings & time deposits          4,963,216    4,853,075     2.3%
    Total deposits                         8,714,072    8,255,559     5.6%
  Federal funds purchased and
    securities sold under
       agreement to repurchase               576,727      458,807    25.7%
  Short-term borrowings                       50,000        4,000
  Accrued interest payable                    21,101       26,309   (19.8%)
  Junior subordinated debt                   125,000      125,000     ---
  Long-term debt                             139,137      140,357    (0.9%)
  Other liabilities                           92,548       82,692    11.9%
      Total liabilities                    9,718,585    9,092,724     6.9%
          Shareholders' Equity
  Common stock                               195,017      202,052    (3.5%)
  Capital surplus                             31,031       18,115    71.3%
  Unrealized gain (loss) on
    securities                                39,368       27,080    45.4%
  Retained earnings                          592,452      583,554     1.5%
      Total shareholders' equity             857,868      830,801     3.3%
      Total liabilities &
        shareholders' equity             $10,576,453   $9,923,525     6.6%



                    Consolidated Statements of Income
              (amounts in thousands, except per share data)
                               (Unaudited)

                                           Quarter Ended
                            Jun-03    Mar-03    Dec-02    Sep-02    Jun-02
  Interest Revenue:
  Loans, including fees    $103,146  $105,252  $110,129  $113,922  $113,735
  Held-to-maturity
    securities:              14,707    15,818    15,681    16,577    16,093
  Available-for-sale
    securities               13,026    14,221    16,277    14,440    15,571
  Short term investments      2,315     2,391     2,451     2,569     3,427
     Total interest
      revenue               133,194   137,682   144,538   147,508   148,826
  Interest Expense:
  Deposits                   39,289    40,544    44,695    47,099    46,834
  Short term borrowings         987       904     1,132     1,268     1,186
  Long term borrowings        2,079     2,082     2,090     2,095     2,069
  Junior subordinated debt    2,547     2,547     2,547     2,547     2,547
  Other interest expense      1,223     1,461     1,680     1,877     2,107
     Total interest
      expense                46,125    47,538    52,144    54,886    54,743
      Net interest revenue   87,069    90,144    92,394    92,622    94,083
  Provision for credit
    losses                    6,472     6,522     7,228     8,208     7,215
      Net interest
       revenue,
       after credit loss
       provision             80,597    83,622    85,166    84,414    86,868
  Other Revenue:
  Mortgage lending            4,667     7,561     6,069    (2,595)      900
  Service charges            16,232    13,654    13,557    12,888    12,595
  Life insurance premiums       876       961     1,031     1,091     1,091
  Trust income                1,684     1,486     1,767     1,693     1,644
  Securities gains, net         180    13,556       170     2,453     2,888
  Insurance commissions       8,314     6,387     5,927     6,123     5,887
  Other                      10,962    11,411     6,661     7,654     7,813
      Total other revenue    42,915    55,016    35,182    29,307    32,818
  Other Expense:
  Salaries and employee
    benefits                 48,007    45,461    45,985    42,301    40,226
  Occupancy                   5,609     5,580     5,497     5,485     5,422
  Equipment                   5,776     6,003     6,093     6,070     6,264
  Telecommunications          1,828     1,860     1,948     1,922     2,032
  Other                      20,113    20,719    25,356    19,995    20,630
      Total other expense    81,333    79,623    84,879    75,773    74,574
      Income before
       income taxes          42,179    59,015    35,469    37,948    45,112
  Income tax expense         12,938    19,867     9,848    11,876    14,185
      Net Income            $29,241   $39,148   $25,621   $26,072   $30,927
  Net Income Per Share:
     Basic                    $0.38     $0.51     $0.33     $0.33     $0.38
    Diluted                   $0.37     $0.50     $0.33     $0.33     $0.38


                    Consolidated Statements of Income
              (amounts in thousands, except per share data)
                               (Unaudited)

                                                     Year To Date
                                                Jun-03            Jun-02
  Interest Revenue:
  Loans, including fees                         $208,397          $227,077
  Held-to-maturity
    securities:                                   30,525            32,522
  Available-for-sale
    securities                                    27,248            31,984
  Short term investments                           4,706             6,789
     Total interest revenue                      270,876           298,372
  Interest Expense:
  Deposits                                        79,833            96,736
  Short term borrowings                            1,891             2,220
  Long term borrowings                             4,161             4,181
  Junior subordinated debt                         5,094             4,330
  Other interest expense                           2,684             4,395
     Total interest expense                       93,663           111,862
      Net interest revenue                       177,213           186,510
  Provision for credit
    losses                                        12,994            13,975
      Net interest revenue,
       after credit loss
       provision                                 164,219           172,535
  Other Revenue:
  Mortgage lending                                12,228             6,454
  Service charges                                 29,886            22,805
  Life insurance premiums                          1,838             2,218
  Trust income                                     3,170             3,561
  Securities gains, net                           13,737             2,863
  Insurance commissions                           14,702            11,554
  Other                                           22,371            18,294
      Total other revenue                         97,932            67,749
  Other Expense:
  Salaries and employee
    benefits                                      93,468            82,817
  Occupancy                                       11,188            10,676
  Equipment                                       11,779            12,799
  Telecommunications                               3,688             3,957
  Other                                           40,833            41,497
      Total other expense                        160,956           151,746
      Income before
       income taxes                              101,195            88,538
  Income tax expense                              32,806            28,214
      Net Income                                 $68,389           $60,324
  Net Income Per Share:
     Basic                                         $0.88             $0.74
    Diluted                                        $0.88             $0.74



                               BancorpSouth, Inc.
                 Average Balances, Interest Income and Expense,
                           and Average Yields and Rates
                             (dollars in thousands)
                                  (Unaudited)
                                                   Quarter Ended
                                                   June 30, 2003
                                           Average                  Yield/
    (Taxable equivalent basis)             Balance      Interest     Rate
    ASSETS
    Loans net of Unearned Income           $6,355,052    $103,521     6.53%
    Held-to-maturity securities:
      Taxable                               1,437,348      12,628     3.52%
      Non Taxable                             166,218       3,198     7.72%
    Available-for-sale securities:
      Taxable                               1,028,778      11,031     4.30%
      Non Taxable                             194,543       3,069     6.33%
    Short term investments                    410,784       2,315     2.26%
      Total interest earning
        assets and revenue                  9,592,723     135,762     5.68%
    Other assets                              785,412
    Less:  allowance for credit losses        (91,005)
        Total                             $10,287,130

    LIABILITIES AND
    SHAREHOLDERS' EQUITY
    Deposits:
      Demand - interest bearing            $2,473,411      $6,664     1.08%
      Savings                                 802,359       2,079     1.04%
      Time                                  4,181,442      30,546     2.93%
    Short-term borrowings                     448,519       2,211     1.98%
    Junior subordinated debt                  125,000       2,547     8.15%
    Long-term debt                            139,243       2,079     5.99%
      Total interest bearing
        liabilities and expense             8,169,974      46,126     2.26%
    Demand deposits -
      non-interest bearing                  1,170,922
    Other liabilities                         113,791
      Total liabilities                     9,454,687
    Shareholders' equity                      832,443
      Total                               $10,287,130
    Net interest revenue                                  $89,636
    Net interest margin                                               3.75%
    Net interest rate spread                                          3.41%
    Interest bearing liabilities to
       interest earning assets                                       85.17%

    Net interest tax equivalent
     adjustment                                            $2,567




                               BancorpSouth, Inc.
                 Average Balances, Interest Income and Expense,
                           and Average Yields and Rates
                             (dollars in thousands)
                                  (Unaudited)
                                                  Quarter Ended
                                                  June 30, 2002
                                          Average                  Yield/
     (Taxable equivalent basis)           Balance      Interest     Rate
     ASSETS
     Loans net of Unearned Income         $6,323,983    $114,202     7.24%
     Held-to-maturity securities:
       Taxable                               954,261      13,643     5.73%
       Non Taxable                           196,409       3,769     7.70%
     Available-for-sale securities:
       Taxable                             1,091,573      13,417     4.93%
       Non Taxable                           197,212       3,314     6.74%
     Short term investments                  424,143       3,427     3.24%
       Total interest earning
         assets and revenue                9,187,581     151,772     6.63%
     Other assets                            715,892
     Less:  allowance for credit losses      (85,472)
         Total                            $9,818,001

     LIABILITIES AND
     SHAREHOLDERS' EQUITY
     Deposits:
       Demand - interest bearing          $2,323,638      $9,295     1.60%
       Savings                               866,708       3,424     1.58%
       Time                                3,930,864      34,115     3.48%
     Short-term borrowings                   453,611       3,294     2.91%
     Junior subordinated debt                125,000       2,547     8.15%
     Long-term debt                          140,458       2,069     5.91%
       Total interest bearing
         liabilities and expense           7,840,279      54,744     2.80%
     Demand deposits -
       non-interest bearing                1,044,430
     Other liabilities                       113,351
       Total liabilities                   8,998,060
     Shareholders' equity                    819,941
       Total                              $9,818,001
     Net interest revenue                                $97,028
     Net interest margin                                             4.24%
     Net interest rate spread                                        3.83%
     Interest bearing liabilities to
        interest earning assets                                     85.34%

     Net interest tax equivalent
      adjustment                                          $2,945




                               BancorpSouth, Inc.
                 Average Balances, Interest Income and Expense,
                           and Average Yields and Rates
                             (dollars in thousands)
                                  (Unaudited)
                                                   Year to Date
                                                   June 30, 2003
                                           Average                  Yield/
    (Taxable equivalent basis)             Balance      Interest     Rate
    ASSETS
    Loans net of Unearned Income           $6,376,722    $209,181     6.62%
    Held-to-maturity securities:
      Taxable                               1,356,177      26,230     3.90%
      Non Taxable                             172,573       6,607     7.72%
    Available-for-sale securities:
      Taxable                               1,042,471      23,158     4.48%
      Non Taxable                             198,125       6,291     6.40%
    Short term investments                    397,907       4,705     2.38%
      Total interest earning
        assets and revenue                  9,543,975     276,172     5.84%
    Other assets                              785,494
    Less:  allowance for credit losses        (89,868)
        Total                             $10,239,601

    LIABILITIES AND
    SHAREHOLDERS' EQUITY
    Deposits:
      Demand - interest bearing            $2,486,782     $13,798     1.12%
      Savings                                 811,544       4,238     1.05%
      Time                                  4,157,274      61,798     3.00%
    Short-term borrowings                     447,172       4,575     2.06%
    Junior subordinated debt                  125,000       5,094     8.15%
    Long-term debt                            139,400       4,161     6.02%
      Total interest bearing
        liabilities and expense             8,167,172      93,664     2.31%
    Demand deposits -
      non-interest bearing                  1,138,656
    Other liabilities                         109,553
      Total liabilities                     9,415,381
    Shareholders' equity                      824,221
      Total                               $10,239,601
    Net interest revenue                                 $182,508
    Net interest margin                                               3.86%
    Net interest rate spread                                          3.52%
    Interest bearing liabilities to
       interest earning assets                                       85.57%

    Net interest tax equivalent
     adjustment                                            $5,295


                               BancorpSouth, Inc.
                 Average Balances, Interest Income and Expense,
                           and Average Yields and Rates
                             (dollars in thousands)
                                  (Unaudited)
                                                   Year to Date
                                                  June 30, 2002
                                          Average                  Yield/
     (Taxable equivalent basis)           Balance      Interest     Rate
     ASSETS
     Loans net of Unearned Income         $6,262,136    $228,020     7.34%
     Held-to-maturity securities:
       Taxable                               944,906      27,581     5.89%
       Non Taxable                           197,359       7,601     7.77%
     Available-for-sale securities:
       Taxable                             1,073,660      27,673     5.20%
       Non Taxable                           195,347       6,632     6.85%
     Short term investments                  404,781       6,790     3.38%
       Total interest earning
         assets and revenue                9,078,189     304,297     6.76%
     Other assets                            712,714
     Less:  allowance for credit losses      (84,868)
         Total                            $9,706,035

     LIABILITIES AND
     SHAREHOLDERS' EQUITY
     Deposits:
       Demand - interest bearing          $2,290,828     $18,129     1.60%
       Savings                               878,716       6,984     1.60%
       Time                                3,873,088      71,623     3.73%
     Short-term borrowings                   452,543       6,616     2.95%
     Junior subordinated debt                104,282       4,330
     Long-term debt                          140,160       4,181     6.02%
       Total interest bearing
         liabilities and expense           7,739,617     111,863     2.91%
     Demand deposits -
       non-interest bearing                1,041,099
     Other liabilities                       111,834
       Total liabilities                   8,892,550
     Shareholders' equity                    813,484
       Total                              $9,706,035
     Net interest revenue                               $192,434
     Net interest margin                                             4.27%
     Net interest rate spread                                        3.84%
     Interest bearing liabilities to
        interest earning assets                                     85.26%

     Net interest tax equivalent
      adjustment                                          $5,924

SOURCE: BancorpSouth, Inc.

CONTACT: L. Nash Allen, Jr., Treasurer and Chief Financial Officer,
+1-662-680-2330, or Gary C. Bonds, Senior Vice President and Controller,
+1-662-680-2332, both of BancorpSouth