BancorpSouth, Inc. Reports Second Quarter Earnings
PRNewswire
TUPELO, Miss.

BancorpSouth, Inc. today announced that net income for the second quarter ended June 30, 2001, was $23.2 million or $0.28 per share (basic and diluted), compared to $26.0 million or $0.31 per share (basic and diluted) for the same period of 2000.

Net income for the six months ended June 30, 2001, excluding the impact of impairment of the company's mortgage servicing asset, was $47.6 million or $0.57 per common share, basic and diluted. Declining interest rates, both mortgage and short-term, resulted in a $3.3 million pre-tax, non-cash charge to earnings to record impairment to the Company's mortgage servicing asset in the first half of 2001, which reduced net income to $45.6 million, or $0.55 per share basic and $0.54 diluted, compared to net income of $52.6 million, or $0.62 per share (basic and diluted) for the first six months of 2000.

Aubrey Patterson, Chairman and Chief Executive Officer of BancorpSouth commented, "Since January, the Federal Reserve has dropped key interest rates 275 basis points, which has had a short-term impact on our profits. The most obvious result is the temporary narrowing of our interest rate margin, as interest rates earned on some of our outstanding loans reacted to the changes more rapidly than interest rates we paid on some of our deposits. However, while we are asset-sensitive over the short term, the impact should lessen after about six months as the decline in loan rates is offset by reductions in deposit rates. We anticipate that the low point of the current interest rate cycle will be reached before the end of 2001. Under that scenario, we expect an improvement in our net interest margin in the second half of 2001 as we see more opportunities to reprice deposits while short-term loan rates remain relatively stable.

"In the second half of the year, we also expect to begin seeing cost savings from the integration of the former First United Bancshares' banks, which is expected to be completed late in the third quarter of 2001," continued Patterson. "That process continues as planned. Five more banks were recently converted to BancorpSouth systems, leaving only 3 more banks to convert. We designed the transition process to minimize customer attrition, and we have accomplished that objective. Now we will turn our attention to expanding the number of products and services we offer these customers."

Net Interest Income

Interest revenue was $169.7 million in the second quarter of 2001, up 3.7% from the $163.6 million reported for corresponding period in 2000. Total interest expense for the 2001 second quarter was $88.8 million, a 9.4% increase from total interest expense of $81.1 million in the same period of 2000.

The net interest margin in the second quarter of 2001 was 3.88%, compared to 4.30% for the second quarter of 2000. The average rate paid on interest- bearing liabilities was 4.84% in the second quarter of 2001, unchanged from the same quarter of 2000. The taxable equivalent yield on earning assets was 7.99% in the second quarter of 2001 versus 8.38% in the same period of 2000.

"We expect to see improved net interest margin in the second half of the year," commented Patterson. "Approximately 63% of our deposits are subject to being repriced in six months or less. Therefore, we should be able to reduce the interest rates paid on deposits as they mature, while the rates earned on loans are not expected to decrease at the same pace. In fact, we are seeing an increase in the slope of the yield curve as some long-term rates are moving up."

Deposit and Loan Activity

Growth in total assets and total deposits slowed in the second quarter of 2001. As of June 30, 2001, total assets were $9.3 billion, up 6.6% since June 30, 2000, but down 1.0% since March 31, 2001. Total deposits at June 30, 2001, were $7.7 billion, up 5.7% from June 30, 2000, but down 0.7% since March 31, 2001. Total loans as of June 30, 2001 were $6.0 billion, 2.9% higher than the total as of June 30, 2000, but essentially unchanged since the end of the first quarter of 2001.

Management has made a strategic decision to reduce the company's exposure to indirect automobile sales financing and is allowing BancorpSouth's portfolio of such loans to decline. The portfolio has decreased $119.6 million since June 30, 2000 and $28.4 million in the second quarter of 2001, to $201.6 million as of June 30, 2001. Excluding the impact of this portfolio reduction, total loan volume would have increased 0.7 percent from March 31, 2001 to June 30, 2001.

"We are seeing some slackening in loan demand as a result of the slowdown in the general economy," said Patterson, "but it is not a dramatic shift. An advantage of operating over a broad geographic area is that we service markets that are engaged in diverse industries. Thus, while traditional manufacturing may be experiencing some demand-driven layoffs, the service economy in the Memphis area and the tourist economies along the Gulf Coast are less impacted. Unemployment is up slightly in Arkansas but flat in Mississippi. Businesses are being conservative in their investment spending and developers are downscaling their activities in a responsible effort to avoid overbuilding in some markets.

"Despite the slower economy, we continue to generate deposits which we anticipate will be adequate to meet our needs for funds even as we have reduced the interest rates we pay on deposits," added Patterson. "We continue to expect modest growth in loan volume for the year and our overall liquidity should preclude the necessity for outside funding because of our solid base of deposits."

Loan Losses

The provision for loan losses in the second quarter of 2001 was $4.8 million, versus $5.4 million in the same quarter of 2000 and $4.1 million in the first quarter of 2001. Annualized net charge-offs for the second quarter of 2001 were 0.29% of average loans, equal to the percentage in the second quarter of 2000 and down from 0.36% in the first quarter of 2001.

For the six months ended June 30, 2001, the provision for loan losses was $8.9 million, down from $10.0 million in the first half of 2000. Annualized net charge-offs were 0.33% of average loans in the first half of 2001, compared to 0.23% for the same period in 2000.

Non-performing assets totaled $48.8 million (0.82% of net loans) as of June 30, 2001, compared to $51.2 million (0.88% of net loans) as of June 30, 2000, and $43.6 million (0.73% of net loans) at March 31, 2001.

The reduced provision for loan losses in the second quarter and first six months of 2001 when compared to the same periods of 2000 reflects the decline in the rate of growth of the Company's loan portfolio and the reduced exposure to losses from indirect automobile sales financing as that portfolio of loans continues to decrease. The allowance for credit losses remained at 1.35% of net loans outstanding June 30, 2001, unchanged from the end of the first quarter of 2001.

"In the current economic environment, our attention is focused on loan quality," Patterson commented. "BancorpSouth has a reputation for strict quality standards, both at the time of origination and throughout the life of the loan. In the second quarter of 2001, measures of loan quality improved

over the first quarter despite some weakening in the economies in some of our markets. Based on current trends, we anticipate that loan losses for the balance of the year will remain close to the level experienced in the second quarter."

Non-interest Revenue

Non-interest revenue totaled $32.0 million in the second quarter of 2001, up 26.5% from the $25.3 million in the second quarter of 2000 and up 14.5% from $27.9 million in the first quarter of 2001.

"Revenue from mortgage banking in the second quarter of 2001 increased 131% from the second quarter of 2000 and was the leading contributor to the strong growth in non-interest revenue," Patterson stated. "We saw a slight up-tick in long-term interest rates in the second quarter, which suggested that long-term rates may have stabilized. As homeowners decided that it was time to lock-in the current rates, mortgage lending fees benefited from the increase in refinancings."

In addition, in the second quarter of 2001 BancorpSouth benefited from a net recovery of value in the mortgage servicing asset totaling $1.0 million, which partially reversed a $4.3 million impairment of the company's mortgage servicing asset that was recorded in the first quarter of 2001. As interest rates decline, refinancing of home mortgages typically accelerates and the present value of the future stream of servicing fees typically declines as the expected lives of the underlying mortgages shorten. The company must recognize the decline in expected future revenue with a non-cash charge against income. This charge reverses itself if interest rates rise, refinancing slows and the expected lives of the mortgages lengthen.

Insurance commissions increased to $5.4 million for the second quarter of 2001, an increase of 36.0% compared to the same period in 2000 and an increase of 17.3% compared to the first quarter of 2001. The gain is attributable to a significant increase in the sales of annuities, driven by an aggressive sales campaign, as well as the inclusion of the results of the Pittman, Seay and Turner Insurance Agency, which was acquired in October 2000 in a transaction accounted for as a purchase.

For the first six months of 2001, non-interest revenue totaled $59.9 million, an increase of 15.4% over the first half of 2000. Non-interest revenue for the first six months of 2001 included a pre-tax gain of $2.2 million that resulted from the sale of certain investment securities out of the available-for-sale portfolio in the first quarter of 2001.

Non-interest Expense

Non-interest expenses for the second quarter of 2001 were $73.2 million, compared to $63.8 million for the second quarter of 2000 and $72.8 million in the first quarter of 2001. Salaries and employee benefits expense increased 20% during the second quarter of 2001 compared to the second quarter of 2000, which reflected the inclusion of the Pittman, Seay and Turner Insurance Agency, and Texarkana First Financial Corporation, a Texas savings and loan company, both acquired in October 2000 in transactions accounted for as purchases. In addition, included in salaries and employee benefits expense was a $1.0 million charge for stock appreciation rights for the second quarter of 2001 compared to a reduction of expense of $1.2 million in the second quarter of 2000. When the market price of the Company's common stock increases or decreases, there is a corresponding change in the value of the outstanding stock appreciation rights, and this change in value is recorded as a expense, for an increase in market price, or a reduction of expense, for a decrease in market price.

"Non-interest expense continued to run ahead of last year's level as we complete the integration of the former First United banks," explained Jim Kelley, President and Chief Operating Officer of BancorpSouth. "The benefits of retaining customers through the transition more than compensates for the cost of operating redundant systems to ensure a smooth process. In the second quarter of 2001, we completed the transition of an additional 7 former First United banks to BancorpSouth systems, and now have a total of 8 banks completed to date. We are on schedule to complete the transition of the

remaining 3 banks by the end of the third quarter and expect to see cost savings in the fourth quarter."

Capital Management

During the second quarter of 2001, the company repurchased a total of 1,155,915 shares of its outstanding common stock under a repurchase program announced on March 5, 2001, that authorizes the company to acquire up to 4.2 million shares or approximately 5% of the shares outstanding at the time of the announcement. As of June 30, 2001, a total of 1,410,615 shares had been repurchased under that program.

BancorpSouth, Inc. is a bank holding company headquartered in Tupelo, Mississippi with $9.3 billion in assets. The company operates approximately 250 commercial banking, insurance, trust, broker/dealer and consumer finance locations in Alabama, Arkansas, Louisiana, Mississippi, Tennessee and Texas.

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" or "intend." These forward-looking statements include, without limitation, those relating to interest rates, net interest margin, integration of former First United Bancshare's banks and related cost savings, deposits, loan volume, loan losses, liquidity, prospects for 2001, mortgage servicing and the Company'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, changes in economic conditions and government fiscal and monetary policies, fluctuations in prevailing interest rates, ability to reduce interest rates paid on deposits as interest rates decline, laws and regulations affecting financial institutions, the ability of BancorpSouth to compete with other financial services companies, the ability of BancorpSouth to effectively integrate acquisitions, the ability of BancorpSouth to operate and integrate new technology, the ability of BancorpSouth to manage its growth and effectively serve an expanding customer and market base, 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, 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,
                                2001        2000        2001        2000
  (Dollars in thousands,
   except per share amounts)
  Earnings Summary:
  Net interest revenue          $80,924     $82,458    $162,524    $163,786
  Provision for credit
   losses                         4,769       5,398       8,866      10,013
  Noninterest revenue            31,991      25,285      59,940      51,959
  Noninterest expense            73,246      63,835     146,078     127,955
  Income before income taxes     34,900      38,510      67,520      77,777

  Income tax provision           11,654      12,527      21,955      25,148
  Net income                     23,246      25,983      45,565      52,629
  Earning per share:  Basic       $0.28       $0.31       $0.55       $0.62
                      Diluted:    $0.28       $0.31       $0.54       $0.62


  Balance sheet data at June 30:
  Total assets                                       $9,294,145  $8,716,594
  Total earning assets                                8,639,134   8,123,828
  Loans and lease
   receivables, net of
   unearned discount                                  5,975,116   5,804,781
  Allowance for credit
   losses                                                80,829      77,685
  Total deposits                                      7,732,642   7,317,468
  Common shareholders'
   equity                                               798,539     759,723
  Book value per share                                     9.65        9.03


  Average balance sheet data:
  Total assets               $9,278,858  $8,559,373  $9,219,786  $8,519,470
  Total earning assets        8,670,155   7,999,532   8,605,052   7,959,354
  Loans and lease
   receivables, net of
   unearned discount          5,968,176   5,705,366   5,996,800   5,632,654
  Total deposits              7,694,561   7,208,261   7,653,725   7,167,052
  Common shareholders'
   equity                       799,757     756,957     794,852     755,986

  Non-performing assets at June 30:
  Non-accrual loans                                     $12,929     $20,510
  Loans 90+ days past due                                25,931      19,123
  Restructured loans                                        243       1,038
  Other real estate owned                                  9,725      10,546

  Net charge-offs as a percentage
       of average loans
        (annualized)              0.29%       0.29%       0.33%       0.23%

  Performance ratios
   (annualized)
  Return on average assets        1.00%       1.22%       1.00%       1.24%
  Return on common equity        11.66%      13.81%      11.56%      13.96%

  Net interest margin             3.88%       4.30%       3.95%       4.29%

  Average shares outstanding
   - diluted                 83,658,238  84,878,228  83,936,788  85,291,221





             BancorpSouth, Inc.
             Consolidated Balance Sheets
             (dollars in thousands)
             (Unaudited)               June 30, 2001     June 30, 2000
             Assets
             Cash & due from banks              $306,905          $278,835
             Interest bearing deposits
              with
               other banks                        12,460            17,523
             Held-to-maturity

              securities                       1,140,030         1,065,866
             Federal funds sold and
              securities
               purchased under
                agreement
                 to resell                       585,131            19,793

             Loans & leases                    5,975,116         5,804,781
                  Allowance for credit
                   losses                        (80,829)          (77,685)
               Net loans & leases              5,894,287         5,727,096

             Available-for-sale
              securities                         881,202         1,187,157
             Mortgages held for sale              45,194            28,708
             Bank premises & equipment           206,069           177,816
             Accrued interest
              receivable                          89,298            80,757
             Other real estate owned               9,650            10,546
             Other assets                        123,919           122,497
                  Total assets                $9,294,145        $8,716,594
             Liabilities
             Demand deposits:
               Non-interest bearing           $1,042,523          $984,253
               Interest bearing                1,847,738         1,687,006
               Total demand deposits           2,890,261         2,671,259
             Savings & time deposits:
               Savings                           462,469           350,473
               Premium access                    442,620           502,952
               Certificates of deposit         3,937,292         3,792,784
               Total savings & time
                deposits                       4,842,382         4,646,209
               Total deposits                  7,732,643         7,317,468
             Federal funds purchased
              and
               securities sold under
                  agreement to
                   repurchase                    507,432           295,085
             Short-term borrowings                     0            75,000
             Accrued interest payable             40,010            33,534
             Long-term debt                      141,503           171,321
             Other liabilities                    74,019            64,463
                 Total liabilities             8,495,606         7,956,871
             Shareholders' Equity
             Common stock                        214,484           214,410
             Capital surplus                      70,231            70,359
             Unrealized gain(loss) on
               securities                         22,551           (18,487)
             Retained earnings                   537,245           517,998
               Less:  Cost of treasury
                stock                            (45,972)          (24,557)
                 Total shareholders'
                  equity                         798,539           759,723
                 Total liabilities &
                   shareholders' equity       $9,294,145        $8,716,594




         BancorpSouth, Inc.
         Consolidated Statements of Income
         (amounts in thousands, except per share data)
         (Unaudited)                Quarter Ended
                          Jun-01    Mar-01    Dec-00    Sep-00    Jun-00

         Interest Revenue:
         Loans, including
          fees             $131,794  $136,737  $140,892  $134,910  $129,030
         Held-to-maturity
           securities:       16,630    16,051    18,141    15,899    15,307
         Available-for-
          sale
           securities        14,240    15,586    16,177    21,554    17,696
         Short term
          investments         7,012     5,767     3,185       962     1,554
            Total interest
             revenue        169,677   174,140   178,395   173,325   163,586
         Interest Expense:
         Deposits            80,763    83,944    84,709    81,031    74,088
         Short term
          borrowings          3,082     3,557     7,007     9,058     4,416
         Long term
          borrowings          2,171     2,265     2,378     2,559     2,442
         Other interest
          expense             2,736     2,776     1,503       110       182
            Total interest
             expense         88,752    92,542    95,597    92,757    81,128
             Net interest
              revenue        80,924    81,598    82,798    80,567    82,458
         Provision for
          credit
           losses             4,769     4,097     5,497    10,655     5,398
             Net interest
              revenue,
              after credit
               loss
              provision      76,155    77,502    77,301    69,912    77,060
         Other Revenue:
         Mortgage lending     7,068    (1,333)    1,900     2,493     3,059
         Service charges     10,906    10,342    10,927    10,213    10,234
         Life insurance
          premiums            1,127     1,094     1,116     1,107     1,058
         Trust income         1,610     1,684     1,625     1,794     1,637
         Securities gains,
          net                    74     2,884   (15,549)     (254)       (7)
         Insurance
          commissions         5,405     4,608     4,845     3,717     3,972
         Other                5,801     8,669     5,189     4,496     5,332
             Total other
              revenue        31,991    27,949    10,052    23,567    25,285
         Other Expense:
         Salaries and
          employee
           benefits          38,425    38,721    33,845    34,070    32,008
         Occupancy            5,005     5,129     4,838     4,647     4,409
         Equipment            6,943     7,032     6,960     6,124     5,506
         Telecommunications
                              2,123     2,182     2,041     1,868     1,751
         Other               20,752    19,767    21,980    29,900    20,161
             Total other
              expense        73,246    72,832    69,664    76,607    63,835
             Income before
              income taxes   34,900    32,619    17,688    16,871    38,510
         Income tax
          expense            11,654    10,300     5,413     7,379    12,527
             Net Income     $23,246   $22,319   $12,275    $9,492   $25,983
         Net Income Per
          Share:
            Basic             $0.28     $0.27     $0.15     $0.11     $0.31

            Diluted           $0.28     $0.27     $0.15     $0.11     $0.31



            BancorpSouth, Inc.
            Consolidated Statements of Income
            (amounts in thousands, except per share data)
            (Unaudited)                                Year To Date
                                                  Jun-01            Jun-00
            Interest Revenue:
            Loans, including fees               $268,531          $253,390
            Held-to-maturity
              securities:                         32,681            30,715
            Available-for-sale
              securities                          29,826            34,852
            Short term investments                12,779             3,359
               Total interest revenue            343,818           322,315
            Interest Expense:
            Deposits                             164,707           144,625
            Short term borrowings                  6,639             8,689
            Long term borrowings                   4,436             4,839
            Other interest expense                 5,512               376
               Total interest expense            181,294           158,529
                Net interest revenue             162,524           163,786
            Provision for credit
              losses                               8,866            10,013
                Net interest revenue,
                 after credit loss
                 provision                       153,658           153,773
            Other Revenue:
            Mortgage lending                       5,735             6,480
            Service charges                       21,248            19,331
            Life insurance premiums                2,222             2,077
            Trust income                           3,294             3,281
            Securities gains, net                  2,958               171
            Insurance commissions                 10,014             7,472
            Other                                 14,470            13,147
                Total other revenue               59,940            51,959
            Other Expense:
            Salaries and employee
              benefits                            77,146            65,941
            Occupancy                             10,134             8,857
            Equipment                             13,975            11,053
            Telecommunications                     4,305             3,326
            Other                                 40,518            38,778
                Total other expense              146,078           127,955
                Income before
                 income taxes                     67,520            77,777
            Income tax expense                    21,955            25,148
                Net Income                       $45,565           $52,629
            Net Income Per Share:
               Basic                               $0.55             $0.62
              Diluted                              $0.54             $0.62



     BancorpSouth, Inc.
     Average Balances, Interest Income and Expense,
       and Average Yields and Rates
     (dollars in thousands)            Quarter Ended
     Unaudited                         June 30, 2001
                                          Average                  Yield/
     (Taxable equivalent basis)           Balance      Interest     Rate
     ASSETS

     Loans net of Unearned Income         $6,024,236    $132,119     8.80%
     Held-to-maturity securities:
       Taxable                               908,896      13,964     6.16%
       Non Taxable                           214,305       4,103     7.68%
     Available-for-sale securities
       Taxable                               767,913      12,056     6.30%
       Non Taxable                           182,598       3,360     7.38%
     Short term investments                  572,207       7,013     4.92%
       Total interest earning
         assets and revenue                8,670,155     172,615     7.99%
     Other assets                            689,128
     Less:  allowance for credit losses      (80,425)
         Total                            $9,278,858

     LIABILITIES AND
     SHAREHOLDERS' EQUITY
     Deposits:
       Demand - interest bearing          $1,830,983     $13,345     2.92%
       Savings                               889,841       9,013     4.06%
       Time                                3,971,149      58,405     5.90%
     Short-term borrowings                   512,104       5,819     4.56%
     Long-term debt                          146,321       2,171     5.95%
       Total interest bearing
         liabilities and expense           7,350,398      88,753     4.84%
     Demand deposits -
       non-interest bearing                1,002,588
     Other liabilities                       126,115
       Total liabilities                   8,479,101
     Shareholders' equity                    799,757
       Total                              $9,278,858
     Net interest revenue                                $83,862
     Net interest margin                                             3.88%
     Net interest rate spread                                        3.14%
     Interest bearing liabilities to
        interest earning assets                                     84.78%

     Net interest tax equivalent
      adjustment                                          $2,938



     BancorpSouth, Inc.
     Average Balances, Interest Income and Expense,
       and Average Yields and Rates
     (dollars in thousands)            Quarter Ended
     Unaudited                         March 31, 2001
                                          Average                  Yield/
     (Taxable equivalent basis)           Balance      Interest     Rate
     ASSETS
     Loans net of Unearned Income         $6,063,946    $137,055     9.17%
     Held-to-maturity securities:
       Taxable                               842,693      13,212     6.36%
       Non Taxable                           232,636       4,366     7.61%
     Available-for-sale securities
       Taxable                               838,410      13,616     6.59%
       Non Taxable                           155,988       3,031     7.88%
     Short term investments                  405,553       5,767     5.77%
       Total interest earning
         assets and revenue                8,539,226     177,047     8.41%
     Other assets                            701,784
     Less:  allowance for credit losses      (80,953)
         Total                            $9,160,057

     LIABILITIES AND

     SHAREHOLDERS' EQUITY
     Deposits:
       Demand - interest bearing          $1,770,537     $14,340     3.28%
       Savings                               896,888      10,685     4.83%
       Time                                3,975,219      58,918     6.01%
     Short-term borrowings                   490,736       6,333     5.23%
     Long-term debt                          151,870       2,265     6.05%
       Total interest bearing
         liabilities and expense           7,285,250      92,541     5.15%
     Demand deposits -
       non-interest bearing                  969,793
     Other liabilities                       115,122
       Total liabilities                   8,370,165
     Shareholders' equity                    789,892
       Total                              $9,160,057
     Net interest revenue                                $84,506
     Net interest margin                                             4.01%
     Net interest rate spread                                        3.26%
     Interest bearing liabilities to
        interest earning assets                                     85.32%

     Net interest tax equivalent
      adjustment                                          $2,907

     BancorpSouth, Inc.
     Average Balances, Interest Income
      and Expense,
       and Average Yields and Rates
     (dollars in thousands)            Quarter Ended
     Unaudited                       December 31, 2000
                                          Average                  Yield/
     (Taxable equivalent basis)           Balance      Interest     Rate
     ASSETS
     Loans net of Unearned Income         $6,073,609    $141,295     9.25%
     Held-to-maturity securities:
       Taxable                               889,349      14,114     6.31%
       Non Taxable                           327,673       6,195     7.52%
     Available-for-sale securities
       Taxable                               913,866      15,271     6.65%
       Non Taxable                            69,280       1,394     8.00%
     Short term investments                  198,310       3,185     6.39%
       Total interest earning
         assets and revenue                8,472,087     181,454     8.52%
     Other assets                            670,163
     Less:  allowance for credit losses      (79,633)
         Total                            $9,062,617

     LIABILITIES AND
     SHAREHOLDERS' EQUITY
     Deposits:
       Demand - interest bearing          $1,668,090     $13,960     3.33%
       Savings                               904,717      11,888     5.23%
       Time                                3,883,979      58,861     6.03%
     Short-term borrowings                   567,066       8,509     5.97%
     Long-term debt                          157,786       2,378     6.00%
       Total interest bearing
         liabilities and expense           7,181,638      95,596     5.30%
     Demand deposits -
       non-interest bearing                  987,644
     Other liabilities                       120,012
       Total liabilities                   8,289,294
     Shareholders' equity                    773,323
       Total                              $9,062,617
     Net interest revenue                                $85,858

     Net interest margin                                             4.03%
     Net interest rate spread                                        3.23%
     Interest bearing liabilities to
        interest earning assets                                     84.77%

     Net interest tax equivalent
      adjustment                                          $3,060



     BancorpSouth, Inc.
     Average Balances, Interest Income and Expense,
       and Average Yields and Rates
     (dollars in thousands)            Quarter Ended
     Unaudited                       September 30, 2000
                                          Average                  Yield/
     (Taxable equivalent basis)           Balance      Interest     Rate
     ASSETS
     Loans net of Unearned Income         $5,888,736    $135,311     9.14%
     Held-to-maturity securities:
       Taxable                               760,409      11,951     6.25%
       Non Taxable                           325,687       6,074     7.42%
     Available-for-sale securities
       Taxable                             1,242,043      20,519     6.57%
       Non Taxable                            75,530       1,591     8.38%
     Short term investments                   58,408         962     6.55%
       Total interest earning
         assets and revenue                8,350,813     176,408     8.40%
     Other assets                            645,252
     Less:  allowance for credit losses      (76,879)
         Total                            $8,919,186

     LIABILITIES AND
     SHAREHOLDERS' EQUITY
     Deposits:
       Demand - interest bearing          $1,659,533     $13,842     3.32%
       Savings                               877,041       9,956     4.52%
       Time                                3,801,938      57,233     5.99%
     Short-term borrowings                   579,725       9,168     6.29%
     Long-term debt                          169,573       2,559     6.00%
       Total interest bearing
         liabilities and expense           7,087,810      92,758     5.21%
     Demand deposits -
       non-interest bearing                  972,647
     Other liabilities                        96,615
       Total liabilities                   8,157,072
     Shareholders' equity                    762,114
       Total                              $8,919,186
     Net interest revenue                                $83,650
     Net interest margin                                             3.99%
     Net interest rate spread                                        3.20%
     Interest bearing liabilities to
        interest earning assets                                     84.88%

     Net interest tax equivalent
      adjustment                                          $3,083



     BancorpSouth, Inc.
     Average Balances, Interest Income and Expense,
       and Average Yields and Rates
     (dollars in thousands)            Quarter Ended
     Unaudited                         June 30, 2000

                                          Average                  Yield/
     (Taxable equivalent basis)           Balance      Interest     Rate
     ASSETS
     Loans net of Unearned Income         $5,750,197    $129,411     9.05%
     Held-to-maturity securities:
       Taxable                               753,072      11,446     6.11%
       Non Taxable                           324,755       5,941     7.36%
     Available-for-sale securities
       Taxable                               996,124      16,685     6.74%
       Non Taxable                            76,029       1,555     8.23%
     Short term investments                   99,355       1,553     6.29%
       Total interest earning
         assets and revenue                7,999,532     166,591     8.38%
     Other assets                            636,386
     Less:  allowance for credit losses      (76,545)
         Total                            $8,559,373

     LIABILITIES AND
     SHAREHOLDERS' EQUITY
     Deposits:
       Demand - interest bearing          $1,707,641     $13,758     3.24%
       Savings                               826,070       8,206     4.00%
       Time                                3,708,808      52,124     5.65%
     Short-term borrowings                   328,870       4,598     5.62%
     Long-term debt                          165,584       2,442     5.93%
       Total interest bearing
         liabilities and expense           6,736,973      81,128     4.84%
     Demand deposits -
       non-interest bearing                  965,742
     Other liabilities                        99,701
       Total liabilities                   7,802,416
     Shareholders' equity                    756,957
       Total                              $8,559,373
     Net interest revenue                                $85,463
     Net interest margin                                             4.30%
     Net interest rate spread                                        3.53%
     Interest bearing liabilities to
        interest earning assets                                     84.22%

     Net interest tax equivalent
      adjustment                                          $4,896



     BancorpSouth, Inc.
     Average Balances, Interest Income and Expense,
       and Average Yields and Rates
     (dollars in thousands)             Year to Date
     Unaudited                         June 30, 2001
                                          Average                  Yield/
     (Taxable equivalent basis)           Balance      Interest     Rate
     ASSETS
     Loans net of Unearned Income         $6,043,981    $269,174     8.98%
     Held-to-maturity securities:
       Taxable                               875,977      27,176     6.26%
       Non Taxable                           223,420       8,469     7.64%
     Available-for-sale securities
       Taxable                               802,967      25,672     6.45%
       Non Taxable                           169,367       6,391     7.61%
     Short term investments                  489,340      12,780     5.27%
       Total interest earning
         assets and revenue                8,605,052     349,662     8.19%
     Other assets                            695,422
     Less:  allowance for credit losses      (80,688)

         Total                            $9,219,786

     LIABILITIES AND
     SHAREHOLDERS' EQUITY
     Deposits:
       Demand - interest bearing          $1,800,927     $27,685     3.10%
       Savings                               893,345      19,698     4.45%
       Time                                3,973,173     117,323     5.95%
     Short-term borrowings                   501,479      12,152     4.89%
     Long-term debt                          149,080       4,436     6.00%
       Total interest bearing
         liabilities and expense           7,318,004     181,294     5.00%
     Demand deposits -
       non-interest bearing                  986,281
     Other liabilities                       120,649
       Total liabilities                   8,424,934
     Shareholders' equity                    794,852
       Total                              $9,219,786
     Net interest revenue                               $168,368
     Net interest margin                                             3.95%
     Net interest rate spread                                        3.20%
     Interest bearing liabilities to
        interest earning assets                                     85.04%

     Net interest tax equivalent
      adjustment                                          $5,845



     BancorpSouth, Inc.
     Average Balances, Interest Income and Expense,
       and Average Yields and Rates
     (dollars in thousands)             Year to Date
     Unaudited                         June 30, 2000
                                          Average                  Yield/
     (Taxable equivalent basis)           Balance      Interest     Rate
     ASSETS
     Loans net of Unearned Income         $5,679,237    $254,124     9.00%
     Held-to-maturity securities:
       Taxable                               767,055      23,021     6.04%
       Non Taxable                           323,356      11,839     7.36%
     Available-for-sale securities
       Taxable                             1,001,681      32,791     6.58%
       Non Taxable                            75,268       3,169     8.47%
     Short term investments                  112,757       3,358     5.99%
       Total interest earning
         assets and revenue                7,959,354     328,302     8.29%
     Other assets                            635,931
     Less:  allowance for credit losses      (75,815)
         Total                            $8,519,470

     LIABILITIES AND
     SHAREHOLDERS' EQUITY
     Deposits:
       Demand - interest bearing          $1,681,215     $26,424     3.16%
       Savings                               858,358      17,103     4.01%
       Time                                3,672,113     101,097     5.54%
     Short-term borrowings                   333,471       9,065     5.47%
     Long-term debt                          165,693       4,839     5.87%
       Total interest bearing
         liabilities and expense           6,710,850     158,528     4.75%
     Demand deposits -
       non-interest bearing                  955,366
     Other liabilities                        97,268

       Total liabilities                   7,763,484
     Shareholders' equity                    755,986
       Total                              $8,519,470
     Net interest revenue                               $169,774
     Net interest margin                                             4.29%
     Net interest rate spread                                        3.54%
     Interest bearing liabilities to
        interest earning assets                                     84.31%

     Net interest tax equivalent
      adjustment                                          $5,989

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SOURCE: BancorpSouth, Inc.

Contact: L. Nash Allen, Jr., +1-662-680-2330, or Gary C. Bonds,
+1-662-680-2332, both of BancorpSouth, Inc.