BancorpSouth, Inc.
On September 30, total assets were $9,301,602, a 12.7% increase over the previous year. Net loans and leases were $5,844,464, up 10.5% over the previous year. Total deposits of $7,388,072 reflected a 7.6% increase.
The charges relating to the merger with First United were $5.6 million, net of tax. Other special charges totaled $4.8 million, net of tax. Other special charges includes a $6.1 million pre-tax, $3.8 million after tax, provision for credit losses to bring the loan portfolio of First United in line with BancorpSouth's credit policy.
Spread compression and increased operating expenses reduced earnings for the quarter by $2.9 million, net of tax or $.03 per diluted share, as compared to the second quarter of 2000. Increased competition for customer deposits further compressed net interest margins in the third quarter, with a resulting net interest margin for the third quarter of 3.98%, compared with 4.28% for the comparable quarter ended September 30, 1999.
Earnings for the nine months ended September 30, 2000, excluding merger- related and other special charges, were $73.7 million or $.86 per diluted share. Earnings as compared to the comparable period of 1999 were down $2.5 million or $.02 per diluted share, or 3.3%, respectively.
BancorpSouth initially announced with the merger the planned restructuring of First United's investment portfolio, and a projected improvement in yields related to the restructured assets of 60 basis points. The expected restructuring charges related thereto were estimated to be approximately $30 million pre-tax. During the third quarter, BancorpSouth significantly increased its short-term borrowings from the Federal Home Loan Bank for the purpose of acquiring short and intermediate term U. S. Treasury and U. S. Government Agency investment securities with yields in excess of the securities held as available for sale by First United. The First United securities are expected to be sold in the fourth quarter of 2000 with a yield enhancement expected to be in excess of 70 basis points, based on current market conditions. The restructuring charges will be included in results for the fourth quarter as merger related charges, and based on transactions completed this month, the estimated restructuring charges will be significantly less than the original $30 million estimated. For the full year 2001, such restructuring should improve interest income approximately $4.3 million before tax, or $.04 per share after tax.
Average total loans and leases outstanding grew 11.5% year to date versus the comparable period last year, and average deposits grew 6.6% for the same comparable periods.
Net charge offs were .70% of average loans in the third quarter of 2000 compared to .34% in the second quarter of 2000, again reflecting the steps to align First United's loan portfolio risks with that of BancorpSouth.
"While our results for the quarter obviously reflected some non-recurring events, solid progress is being made to assimilate First United into BancorpSouth operating systems and policies. Efficiencies expected from the consolidation of 'back room' support operations are expected to be realized beginning at the end of the second quarter 2001, with full efficiencies effected by year end 2001," said Aubrey Patterson, CEO. "Our merger strategy first and foremost focuses on our customers' best interests. The company's integration plan calls for conservative savings tied to an orderly conversion process. Our commitment is to provide a 'seamless' transition for First United's customers into the BancorpSouth family," Patterson added.
This news release discusses BancorpSouth's business outlook and may include certain forward-looking statements. The forward-looking statements and all other statements that are not historical facts are subject to a number of risks and uncertainties, and actual results may differ materially from those discussed. The key factors and assumptions that support the forward- looking statements, as well as information on the risk factors that could cause actual results to differ, are available from the company's Securities and Exchange Commission filings.
Selected Financial Data
Three Months Ended Nine Months Ended
September 30, September 30,
2000 1999 2000 1999
(Dollars in thousands except per share amounts)
Earnings summary (excluding merger-related costs and other special items):
Net interest revenue $80,567 $79,405 $244,353 $233,433
Provision for
credit losses 4,549 4,698 14,562 12,643
Noninterest revenue 23,567 23,419 75,526 76,222
Noninterest expense 66,722 59,224 193,452 186,676
Income before income
taxes 32,863 38,902 111,865 110,336
Income tax provision 11,778 12,730 37,236 34,344
Net income $21,085 $26,172 $74,629 $75,992
Earnings per share:
Basic $0.25 $0.31 $0.88 $0.89
Diluted $0.25 $0.30 $0.88 $0.88
Earnings summary (as reported):
Net interest revenue $80,567 $79,405 $244,353 $233,433
Provision for credit
losses 10,656 4,698 20,669 12,643
Noninterest revenue 23,567 23,419 75,526 76,222
Noninterest expense 76,607 59,224 204,561 186,676
Income before income
taxes 16,871 38,902 94,649 110,336
Income tax provision 7,379 12,730 32,528 34,344
Net income $9,492 $26,172 $62,121 $75,992
Earnings per share:
Basic $0.11 $0.31 $0.73 $0.89
Diluted $0.11 $0.30 $0.73 $0.88
Balance sheet data at September 30:
Total assets $9,301,602 $8,250,821
Total earning assets 8,719,705 7,717,232
Loans and lease receivables,
net of unearned discount 5,922,564 5,361,142
Allowance for credit losses 78,100 72,846
Total deposits 7,388,072 6,864,920
Common shareholders' equity 766,827 747,319
Book value per share 9.12 8.73
Average balance sheet data:
Total assets $8,919,186 $8,155,161 $8,653,681 $8,018,485
Total earning
assets 8,351,228 7,627,189 8,090,791 7,500,348
Loans and lease
receivables, net
of unearned
discount 5,889,151 5,316,348 5,749,850 5,159,069
Total deposits 7,311,159 6,788,270 7,215,438 6,765,918
Common shareholders'
equity 762,114 738,522 758,044 732,329
Non-performing assets at September 30:
Non-accrual loans $21,171 $16,779
Loans 90+ days past due 18,318 14,254
Restructured loans 913 1,133
Other real estate owned 6,452 10,134
Net charge-off as a
percentage of
average loans
(annualized) 0.70% 0.34% 0.39% 0.21%
Performance ratios
(annualized)
(excluding merger-
related costs
and other special
items):
Return on average
assets 0.95% 1.28% 1.15% 1.26%
Return on common
equity 11.07% 14.16% 13.13% 13.83%
Performance ratios
(annualized)
(as reported):
Return on average
assets 0.43% 1.28% 0.96% 1.26%
Return on common
equity 4.98% 14.16% 10.93% 13.83%
Net interest margin 3.98% 4.28% 4.18% 4.32%
Average shares
outstanding-
diluted 84,398,124 86,022,885 84,994,688 86,015,661
BancorpSouth, Inc.
Consolidated Statements of Income
(amounts in thousands, except per share data)
(Unaudited)
Quarter Ended
Sep-00 Jun-00 Mar-00 Dec-99 Sep-99
Interest Revenue:
Loans, including
fees $ 134,910 $ 129,030 $ 124,360 $ 123,471 $ 116,398
Held-to-
maturity
securities: 15,899 15,307 15,408 14,176 13,822
Available-for-
sale
securities 21,554 17,696 17,155 18,134 18,354
Short term
investments 962 1,553 1,805 2,210 1,014
Total interest
revenue 173,325 163,586 158,729 157,991 149,589
Interest Expense:
Deposits 81,031 74,088 70,536 68,036 63,249
Short term
borrowings 9,058 4,416 4,274 4,183 3,960
Long term
borrowings 2,559 2,442 2,397 2,498 2,683
Other interest
expense 110 182 193 187 292
Total interest
expense 92,757 81,128 77,400 74,904 70,184
Net interest
revenue 80,568 82,458 81,328 83,087 79,405
Provision for
credit losses 10,656 5,398 4,615 5,169 4,698
Net interest
revenue, after
credit loss
provision 69,912 77,060 76,713 77,918 74,707
Other Revenue:
Mortgage
lending 2,493 3,059 3,422 3,466 3,727
Service
charges 13,125 13,146 12,037 12,677 12,099
Life insurance
premiums 1,107 1,058 1,020 1,015 1,016
Trust income 1,794 1,637 1,644 1,793 1,602
Securities
gains, net (254) (7) 177 83 117
Insurance
commissions 3,717 3,972 3,499 3,281 3,293
Other 1,584 2,421 4,874 1,784 1,564
Total other
revenue 23,567 25,286 26,674 24,099 23,419
Other Expense:
Salaries and
employee
benefits 34,070 32,008 33,933 33,068 30,234
Occupancy net
of rental
income 4,647 4,409 4,449 4,543 4,317
Equipment 6,124 5,506 5,544 5,479 5,467
Telecommunic-
ations 1,868 1,751 1,574 2,019 1,573
Other 29,900 20,161 18,619 20,098 17,634
Total other
expense 76,607 63,835 64,120 65,206 59,224
Income before
income
taxes 16,871 38,511 39,267 36,811 38,902
Income tax
expense 7,379 12,527 12,622 10,392 12,729
Net Income $ 9,492 $ 25,984 $ 26,645 $ 26,419 $ 26,172
Net Income
Per Share:
Basic $0.11 $0.31 $0.31 $0.31 $0.31
Diluted $0.11 $0.31 $0.31 $0.31 $0.30
BancorpSouth, Inc.
Consolidated Statements of Income
(amounts in thousands, except per share data)
(Unaudited)
Year To Date
Sep-00 Sep-99
Interest Revenue:
Loans, including fees $ 388,299 $ 338,468
Held-to-maturity securities: 46,615 39,828
Available-for-sale securities 56,405 54,456
Short term investments 4,320 5,931
Total interest revenue 495,640 438,683
Interest Expense:
Deposits 225,656 188,719
Short term borrowings 17,748 7,335
Long term borrowings 7,398 8,118
Other interest expense 485 1,078
Total interest expense 251,286 205,250
Net interest revenue 244,353 233,433
Provision for credit losses 20,669 12,643
Net interest revenue, after credit
loss provision 223,684 220,790
Other Revenue:
Mortgage lending 8,973 14,823
Service charges 38,309 34,479
Life insurance premiums 3,184 2,960
Trust income 5,075 4,607
Securities gains, net (83) 4,337
Insurance commissions 11,189 10,293
Other 8,879 4,724
Total other revenue 75,526 76,222
Other Expense:
Salaries and employee benefits 100,011 91,682
Occupancy net of rental income 13,504 12,375
Equipment 17,174 16,132
Telecommunications 5,193 5,077
Other 68,680 61,410
Total other expense 204,562 186,676
Income before income taxes 94,649 110,336
Income tax expense 32,528 34,344
Net Income $ 62,121 $ 75,992
Net Income Per Share: Basic $0.73 $0.89
Diluted $0.73 $0.88
BancorpSouth, Inc.
Average Balances, Interest Income and Expense,
and Average Yields and Rates
(dollars in thousands)
Unaudited
Quarter Ended
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 759,985 11,951 6.32%
Non Taxable 325,687 6,074 7.46%
Available-for-sale securities
Taxable 1,242,467 20,542 6.65%
Non Taxable 75,530 1,556 8.24%
Short term investments 58,408 962 6.62%
Total interest earning
assets and revenue 8,350,813 176,396 8.50%
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 3.35%
Savings 877,041 9,956 4.57%
Time 3,801,938 57,233 6.05%
Short-term borrowings 579,725 9,168 6.36%
Long-term debt 169,573 2,559 6.07%
Total interest bearing
liabilities and expense 7,087,810 92,758 5.26%
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 $83,638
Net interest margin 3.98%
Net interest rate spread 3.23%
Interest bearing liabilities to
interest earning assets 84.9%
Net interest tax equivalent
adjustment $3,070
Quarter Ended
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 751,572 11,446 6.13%
Non Taxable 324,755 5,941 7.32%
Available-for-sale securities
Taxable 997,624 16,723 6.74%
Non Taxable 76,029 1,498 7.88%
Short term investments 99,355 1,553 6.29%
Total interest earning
assets and revenue 7,999,532 166,572 8.37%
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 $85,444
Net interest margin 4.30%
Net interest rate spread 3.53%
Interest bearing liabilities to
interest earning assets 84.2%
Net interest tax equivalent
adjustment $2,986
Quarter Ended
March 31, 2000
Average Yield/
(Taxable equivalent basis) Balance Interest Rate
ASSETS
Loans net of Unearned Income $5,608,277 $124,713 8.94%
Held-to-maturity securities:
Taxable 780,049 11,575 5.97%
Non Taxable 321,956 5,898 7.33%
Available-for-sale securities
Taxable 1,008,227 16,142 6.44%
Non Taxable 74,507 1,559 8.37%
Short term investments 126,159 1,805 5.75%
Total interest earning
assets and revenue 7,919,175 161,692 8.21%
Other assets 635,476
Less: allowance for
credit losses (75,085)
Total $8,479,566
LIABILITIES AND
SHAREHOLDERS' EQUITY
Deposits:
Demand - interest bearing $1,654,789 $12,666 3.08%
Savings 890,646 8,897 4.02%
Time 3,635,417 48,973 5.42%
Short-term borrowings 338,072 4,467 5.31%
Long-term debt 165,802 2,397 5.81%
Total interest bearing
liabilities and expense 6,684,726 77,400 4.66%
Demand deposits -
non-interest bearing 944,990
Other liabilities 94,835
Total liabilities 7,724,551
Shareholders' equity 755,015
Total $ 8,479,566
Net interest revenue $84,292
Net interest margin 4.28%
Net interest rate spread 3.56%
Interest bearing liabilities to
interest earning assets 84.4%
Net interest tax
equivalent adjustment $2,964
Quarter Ended
December 31, 1999
Average Yield/
(Taxable equivalent basis) Balance Interest Rate
ASSETS
Loans net of Unearned Income $5,486,654 $ 123,807 8.95%
Held-to-maturity securities:
Taxable 703,117 10,225 5.85%
Non Taxable 319,592 6,079 7.61%
Available-for-sale securities
Taxable 1,077,241 17,055 6.37%
Non Taxable 81,090 1,660 8.19%
Short term investments 141,319 2,210 6.29%
Total interest earning
assets and revenue 7,809,013 161,036 8.29%
Other assets 634,938
Less: allowance for
credit losses (73,571)
Total $8,370,380
LIABILITIES AND
SHAREHOLDERS' EQUITY
Deposits:
Demand - interest bearing $1,588,385 $11,903 3.01%
Savings 953,683 9,265 3.91%
Time 3,494,453 46,868 5.39%
Short-term borrowings 350,969 4,370 5.01%
Long-term debt 176,937 2,498 5.68%
Total interest bearing
liabilities and expense 6,564,427 74,904 4.59%
Demand deposits -
non-interest bearing 946,827
Other liabilities 106,096
Total liabilities 7,617,350
Shareholders' equity 753,030
Total $8,370,380
Net interest revenue $86,132
Net interest margin 4.38%
Net interest rate spread 3.70%
Interest bearing liabilities to
interest earning assets 84.1%
Net interest tax
equivalent adjustment $3,045
Quarter Ended
September 30, 1999
Average Yield/
(Taxable equivalent basis) Balance Interest Rate
ASSETS
Loans net of Unearned Income $5,316,348 $116,734 8.71%
Held-to-maturity securities:
Taxable 710,315 10,278 5.82%
Non Taxable 312,076 5,452 6.99%
Available-for-sale securities
Taxable 1,125,113 17,324 6.19%
Non Taxable 73,756 1,586 8.60%
Short term investments 89,581 1,014 4.55%
Total interest earning
assets and revenue 7,627,189 152,388 8.04%
Other assets 600,176
Less: allowance for
credit losses (72,204)
Total $8,155,161
LIABILITIES AND
SHAREHOLDERS' EQUITY
Deposits:
Demand - interest bearing $1,562,146 $11,089 2.86%
Savings 978,381 9,314 3.83%
Time 3,322,592 42,845 5.19%
Short-term borrowings 352,688 4,823 5.50%
Long-term debt 191,250 2,112 4.44%
Total interest bearing
liabilities and expense 6,407,057 70,183 4.41%
Demand deposits -
non-interest bearing 925,151
Other liabilities 84,421
Total liabilities 7,416,629
Shareholders' equity 738,532
Total $8,155,161
Net interest revenue $82,205
Net interest margin 4.28%
Net interest rate spread 3.63%
Interest bearing liabilities to
interest earning assets 84.0%
Net interest tax
equivalent adjustment $2,800
BancorpSouth, Inc.
Consolidated Balance Sheets
(dollars in thousands)
(Unaudited)
September 30, September 30, December 31,
2000 1999 1999
Assets
Cash & due from banks $ 262,868 $ 248,839 $ 334,181
Interest bearing deposits
with other banks 13,089 21,639 12,058
Held-to-maturity securities 1,166,984 1,003,374 1,026,433
Federal funds sold 75,000 114,872 110,875
Loans & leases 5,922,564 5,361,142 5,541,962
Allowance for credit losses (78,100) (72,846) (74,232)
Net loans & leases 5,844,464 5,288,296 5,467,730
Available-for-sale
securities 1,505,148 1,169,050 1,080,063
Mortgages held for sale 34,105 41,917 37,513
Bank premises & equipment 186,577 170,620 171,867
Accrued interest receivable 90,430 73,979 73,076
Other real estate owned 7,303 10,412 11,182
Other assets 115,634 107,823 116,719
Total assets $ 9,301,602 $ 8,250,821 $ 8,441,697
Liabilities
Demand deposits:
Non-interest bearing $ 1,007,326 $ 931,451 $ 966,491
Interest bearing 1,671,883 1,567,074 1,589,155
Total demand deposits 2,679,209 2,498,525 2,555,646
Savings & time deposits:
Savings 441,992 276,742 269,786
Premium access 441,483 688,016 667,722
Certificates of deposit 3,825,389 3,401,639 3,573,491
Total savings & time
deposits 4,708,864 4,366,397 4,510,999
Total deposits 7,388,073 6,864,922 7,066,645
Federal funds purchased
and securities sold
under agreement to repurchase 298,035 223,544 257,427
Short-term borrowings 570,000 115,000 89,000
Accrued interest payable 45,930 35,873 30,929
Long-term debt 165,803 184,131 166,247
Other liabilities 66,934 80,031 74,338
Total liabilities 8,534,775 7,503,501 7,684,586
Shareholders' Equity
Common stock 214,484 214,405 214,405
Capital surplus 70,464 71,645 71,777
Unrealized gain (loss)
on securities (7,055) (7,808) (14,149)
Retained earnings 515,086 470,695 486,540
Less: Cost of treasury stock (26,152) (1,617) (1,462)
Total shareholders' equity 766,827 747,320 757,111
Total liabilities &
shareholders' equity $ 9,301,602 $ 8,250,821 $ 8,441,697
SOURCE: BancorpSouth, Inc.
Contact: L. Nash Allen, Jr., 662-680-2330, or Gary C. Bonds,
662-680-2332, both of BancorpSouth, Inc.