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| 8-K - BANCORPSOUTH, INC. - BANCORPSOUTH INC | d298599d8k.htm |
 BancorpSouth, Inc.
Investor Presentation
February 2012
Exhibit 99.1 |
 Forward Looking Information
2
Certain statements contained in this presentation and the accompanying slides 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 reference to a future period or by the use of
forward-looking terminology, such as “anticipate,” “believe,” “estimate,”
“expect,” “foresee,” “may,” “might,” “will,”
“intend,” “could,” “would” or “plan,” or future or conditional verb tenses, and variations or negatives of such terms. These
forward-looking statements include, without limitation, statements about the use of non-GAAP
financial measures, maturities of our CDs, pro forma capital ratios, our strategic focus,
results of operations and financial condition. We caution you not to place undue reliance on the forward-looking statements contained in this
presentation, in that actual results could differ materially from those indicated in such
forward-looking statements as a result of a variety of factors. These factors include, but
are not limited to, conditions in the financial markets and economic conditions generally, the adequacy of the Company’s provision and allowance for
credit losses to cover actual credit losses, the credit risk associated with real estate construction,
acquisition and development loans, the impact of legal or administrative proceedings, the
availability of capital on favorable terms if and when needed, liquidity risk, the Company’s ability to improve its internal controls
adequately, governmental regulation, including the Dodd Frank Act, and supervision of the
Company’s operations, the impact of regulations on service charges on the Company’s
core deposit accounts, the susceptibility of the Company’s business to local economic conditions, the soundness of other financial institutions,
changes in interest rates, the impact of monetary policies and economic factors on the Company’s
ability to attract deposits or make loans, volatility in capital and credit markets,
reputational risk, the impact of hurricanes or other adverse weather events, any requirement that the Company write down goodwill or other
intangible assets, diversification in the types of financial services the Company offers, competition
with other financial services companies, risks in connection with completed or potential
acquisitions, the Company’s growth strategy, interruptions or breaches in security of the Company’s information systems, the failure of
certain third party vendors to perform, limitations on the Company’s ability to declare and pay
dividends, dilution caused by the Company’s issuance of any additional shares of its
common stock to raise capital or acquire other banks, bank holding companies, financial holding companies and insurance agencies, other
factors generally understood to affect the financial results of financial services companies and other
factors detailed from time to time in the Company’s press releases and filings with the
Securities and Exchange Commission. Forward-looking statements speak only as of the date they were made, and, except as
required by law, we do not undertake any obligation to update or revise forward-looking statements
to reflect events or circumstances after the date of this presentation. Certain tabular
presentations may not reconcile because of rounding. Unless otherwise noted, any quotes in this presentation can be attributed to
company management.
|
 Non-GAAP Financial Disclaimer
3
This presentation contains financial information determined by methods other than those prescribed by
accounting principles generally accepted in the United States ("GAAP'). Management uses
these "non-GAAP" financial measures in its analysis of the Company's capital and
performance. Management believes that the ratio of tangible shareholders’ equity to tangible
assets is important to investors who are interested in evaluating the adequacy of the Company's
capital levels. Management believes that tangible book value per share is important to
investors who are interested in changes from period to period in book value per share exclusive of changes in tangible assets.
Management believes that pre-tax, pre-provision earnings is important to investors as it shows
earnings trends without giving effect to provision for credit losses.
You should not view these disclosures as a substitute for results determined in accordance with GAAP,
and they are not necessarily comparable to non-GAAP measures used by other companies. The
limitations associated with these measures are the risks that persons might disagree as to the
appropriateness of items comprising these measures and that different companies might calculate these measures
differently. Information provided in the Appendix of this presentation reconciles these non-GAAP
measures with comparable measures calculated in accordance with GAAP. |
 Strong core capital base
Overview of BancorpSouth, Inc.
$13.0 billion in assets
287 locations with reach throughout a 9-state footprint
Customer-focused business model with comprehensive line of financial products
and banking services for individuals and small to mid-size businesses
Nation’s 26
th
largest insurance agency / brokerage operation
Strong
mortgage
operations
with
production
totaling
$1.2
billion
for
2011
Consistent core earnings with pre-tax, pre-provision earnings of $186.1
million (excluding MSR impairment)
4
Data as of and for the year ended December 31, 2011
Insurance ranking from Business Insurance Magazine as of December 31, 2010 Common equity: $1.3 billion
Tangible shareholders’ equity / tangible assets: 7.67% Total risk-based capital ratio: 13.03% |
 5
Regional Management Structure |
 6
Balance Sheet Summary
Dollars in millions, except per share
12/31/11
9/30/11
12/31/10
Total assets
$12,996
$13,199
$13,615
(4.5)
%
Cash and equivalents
499
500
272
83.5
Securities
2,514
2,482
2,709
(7.2)
Loans, net of unearned income
8,870
9,056
9,333
(5.0)
Allowance for credit losses
(195)
(200)
(197)
(1.0)
Total deposits
10,955
11,063
11,490
(4.7)
Short-term borrowings
375
451
443
(15.3)
Shareholders' equity
1,263
1,267
1,222
3.4
Book value per share
15.13
15.17
14.64
3.3
Tangible book value per share
11.68
11.71
11.17
4.6
12/31/11 vs 12/31/10
% Change |
 Common
Stock Offering Pro forma capital ratios assume $109 million of net
proceeds. Closed $115 million common stock
offering on January 24, 2012
Improves capitalization at the
Holding Company and maintains
flexibility at the Bank
Increases Holding Company
liquidity
Enhances strategic flexibility
Positioned for recovery
Ability to invest
Opportunistic M&A
Holding Company Capital Ratios
7
TCE / TA
Tier 1 Common
Ratio
Tier 1 Ratio
12/31/11
12/31/11 Pro Forma
7.67%
10.15%
11.77%
8.46%
11.28%
12.90%
6.00%
8.00%
10.00%
12.00%
14.00% |
  8
Recent Operating Results
12/31/11
9/30/11
6/30/11
3/31/11
12/31/10
Net interest revenue
$107.5
$108.1
$109.9
$109.4
$110.2
Provision for credit losses
19.3
25.1
32.2
53.5
43.3
Noninterest revenue
65.3
62.1
75.1
68.3
74.0
Noninterest expense
135.9
130.7
137.1
130.0
123.5
Income (loss) before income taxes
17.7
14.3
15.7
(5.8)
17.4
Income tax provision (benefit)
4.4
2.4
2.9
(5.3)
1.6
Net income (loss)
$13.3
$11.9
$12.8
($0.5)
$15.8
Net income (loss) per share: diluted
$0.16
$0.14
$0.15
($0.01)
$0.19
Nonrecurring/Noncash Items*
MSR valuation adjustment
($1.0)
($11.7)
($3.8)
$2.5
$8.9
Security gains (losses), net
-
2.0
10.0
-
(0.5)
Prepayment penalty on FHLB borrowings
-
-
(9.8)
-
-
Branch closure expense
-
(3.1)
-
-
-
Total nonrecurring/noncash items
($1.0)
($12.8)
($3.6)
$2.5
$8.4
Three Months Ended
Dollars in millions, except per share data *Represents
both nonrecurring and noncash items that are included in income before
taxes but are not considered to be a component of core operating earnings |
 $55
$46
$56
$61
$48
$48
$39
$37
$55
$55
$61
$52
$45
$52
$51
$38
$0
$10
$20
$30
$40
$50
$60
$70
3/31/10
6/30/10
9/30/10
12/31/10
3/31/11
6/30/11
9/30/11
12/31/11
Pre-tax, Pre-provision Earnings
Pre-tax, Pre-provision Earnings (excl. MSR impairment)
9
Stable and Consistent Pre-tax, Pre-provision Earnings
Dollars in millions
Data for quarters ended as of dates shown
|
 Stable Net Interest Margin
Fiscal Year
Quarter Ended
Shown on a fully taxable equivalent basis
10
3.68%
3.75%
3.77%
3.70%
3.69%
3.71%
3.66%
3.69%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
2007
2008
2009
2010
3/31/11
6/30/11
9/30/11
12/31/11 |
 Mortgage
lending
11%
Card and
merchant fees
16%
Service
charges
25%
Trust income
4%
Insurance
commissions
32%
Other
12%
Diversified Revenue Stream
Noninterest Revenue Composition
Insurance and mortgage businesses
provide significant sources of noninterest
revenue
Historically, over 35% of total revenue
has been derived from noninterest
sources
Insurance commissions were up 6% for
2011 compared to 2010
Mortgage production volume totaled $1.2
billion for 2011
Total Noninterest Revenue of $272.4M*
11
Percentages and amounts based on data for the twelve months ended December 31, 2011
*Excludes net securities gains of $12.1 million and MSR impairment of $13.7 million
|
 Noninterest Revenue
12
Excludes net securities gains and MSR impairment
Data for quarters ended as of dates shown
$22M
$22M
$21M
$18M
$23M
$23M
$22M
$19M
$0
$20
$40
$60
$80
3/31/10
6/30/10
9/30/10
12/31/10
3/31/11
6/30/11
9/30/11
12/31/11
Insurance Commissions
All Other Noninterest Revenue
$62M
$66M
$72M
$66M
$66M
$69M
$72M
$66M
Noninterest revenue continues to be a stable and significant source of revenue.
Insurance business continues to perform well and typically makes up approximately
1/3 of noninterest revenue. |
 Core
Deposit Franchise As of and for the periods ended December 31,
2011 $11.0B Total
Deposit Composition
13
Approximately 87% of total deposits are
core, yielding a 92% loan / core deposit
ratio
Noninterest bearing deposits have grown
approximately 10% since December 31,
2010
Cost of total deposits for the quarter
ended December 31, 2011 was 0.67%
Over $1 billion in CDs are maturing over
the next two quarters at a weighted
average rate of approximately 1.26% |
 Diversified Loan Portfolio
$8.9B Portfolio
Loans By Category
Loans By Geography
14
Commercial &
Industrial
16%
Consumer Mortgages
22%
Home
Equity
6%
Agricultural
3%
C&I Owner-
15%
Construction,
Acquisition & Dev.
10%
Commercial Real
Estate
20%
Credit Cards
1%
Other
7%
AL & FL
Panhandle
8%
AR**
14%
MS**
29%
MO
6%
Greater
Memphis
6%
TN**
8%
TX & LA
19%
Other*
10%
Occupied |
 % Change
As of
Linked
YOY
12/31/11
9/30/11
12/31/10
12/31/11 vs. 9/30/11
12/31/11 vs. 12/31/10
Commercial and industrial
1,474
$
1,503
$
1,491
$
(2.0%)
(1.2%)
Real estate:
Consumer mortgages
1,945
1,966
1,952
(1.1%)
(0.3%)
Home equity
514
523
543
(1.7%)
(5.3%)
Agricultural
239
250
252
(4.1%)
(5.1%)
Commercial and industrial-owner occupied
1,302
1,330
1,331
(2.1%)
(2.2%)
Construction, acquisition and development
908
977
1,175
(7.0%)
(22.7%)
Commercial
1,754
1,772
1,817
(1.0%)
(3.5%)
Credit Cards
106
103
106
3.0%
(0.1%)
Other
627
632
665
(0.8%)
(5.7%)
Total
8,870
$
9,056
$
9,333
$
(2.0%)
(5.0%)
Loan Portfolio
Continue to decrease exposure in the CAD portfolio
Excluding
the
impact
of
CAD
portfolio
-
total
loans
declined
2.4%
from
December
31, 2010
15
Dollars
in
millions
Net
loans
and
leases |
 Credit Quality Improvement
Non-performing loans decreased 11.2% from the previous quarter
Non-performing assets decreased 5.6% from the previous quarter
Both NPLs and NPAs have declined for three consecutive quarters
51% of non-accrual loans paying as agreed
85% of non-accrual loans were impaired and carried at 68% of unpaid
principal balance (“UPB”)
Sales of OREO properties during the quarter totaled $16.7 million,
16
At and for the three months ended December 31, 2011
“Paying as agreed” includes loans < 30 days past due with payments occurring at least
quarterly
resulting in no material net gain/loss. OREO is carried at 54% of
aggregate loan balances at time of foreclosure |
 4Q11
NPL Improvement 17
Dollars in millions
As of
12/31/11
9/30/11
Change
Non-accrual loans and leases
$276.8
$314.5
($37.7)
Loans and leases 90+ days past due, still accruing
3.4
7.3
(3.9)
Restructured loans and leases, still accruing
42.0
41.0
1.0
Total non-performing loans and leases
$322.3
$362.8
($40.5)
Allowance for credit losses to net loans and leases
2.20%
2.21%
Allowance for credit losses to non-performing loans and leases
60.55%
55.04%
Non-performing loans and leases to net loans and leases
3.63%
4.01% |
 NPLs
By Type & Location NPLs By Category
NPLs By Geography
18
Commercial & Industrial
4%
Consumer Mortgages
16%
Home Equity
1%
Agricultural
1%
-
C&I Owner
Occupied
13%
Construction, Acquisition
& Development
42%
Commercial
Real Estate
19%
Credit Cards
1%
Other
2%
AL & FL
Panhandle
16%
AR**
8%
MS**
17%
MO
15%
Greater
Memphis
13%
TN**
9%
TX & LA
18%
Other*
4% |
 19
Newly Identified Non-Accrual Loans
$131M
$111M
$50M
$61M
$39M
$60M
$52M
$48M
$54M
$38M
$0
$20
$40
$60
$80
$100
$120
$140
12/31/10
3/31/11
6/30/11
9/30/11
12/31/11
Newly Identified Non-Accrual Loans
Loans 30-89 Days Past Due, Still Accruing
Dollars in millions
Newly identified non-accrual loans for quarters ended as of dates shown
|
 Non-Accrual Loans
20
51% of non-accrual loans were paying as agreed as of December 31, 2011
$0
$100
$200
$300
$400
12/31/10
3/31/11
6/30/11
9/30/11
12/31/11
Non-Accrual Lns Paying as Agreed
All Other Non-Accrual Lns
Dollars in millions
“Paying as Agreed” includes loans < 30 days past due with payments occurring at least
quarterly 36%
37%
47%
48%
51% |
 Net
Charge-offs are Stabilizing 21
Net Charge-Offs
Net Charge-offs / Average loans
$51
$52
$33
$23
$24
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
$0
$10
$20
$30
$40
$50
$60
12/31/10
3/31/11
6/30/11
9/30/11
12/31/11
% Avg. Loans
Data for quarters ended as of dates shown
Dollars in millions |
 Strategic Focus
Preserve strong capital and position the Company for economic recovery
Focus on asset quality
Pursue quality loan growth
Take advantage of market disruption
Grow core earnings through margin expansion and revenue growth
Expense control and reduction
22 |
 Summary
Leading Mid-South Regional Bank Serving Our Communities for Over 100 Years
Stable net interest margin and historically over 35% of the revenue stream derived
from noninterest sources High Quality Deposit Franchise with a Stable Core
Deposit Base 87% core deposits*
Cost of total deposits of 0.67%
Positive Asset Quality Trends
11.2% decline in non-performing loans and 5.6% decline in non-performing
assets from Q3‘11 to Q4’11 NPLs and NPAs have declined for three
consecutive quarters 51% of nonaccrual loans paying as agreed
Consistent Pre-tax, Pre-Provision Earnings
23
Proven and Experienced Management Team
Diversified Revenue Stream
At and for the three months ended December 31, 2011 *Includes all deposits
except CDs>100K |
 Appendix |
 25
Non-GAAP Financial Reconciliation
Pre-Tax, Pre-Provision Earnings Reconciliation
Q4-11
Q3-11
Q2-11
Q1-11
Q4-10
Q3-10
Q2-10
Q1-10
(Dollars in Thousands)
Net Interest Income Before Provision --> A
$107,489
$108,075
$109,912
$109,437
$110,253
$109,678
$109,329
$111,882
Noninterest Income --> B
65,335
62,055
75,144
68,311
73,974
69,752
57,086
63,332
Noninterest Expense --> C
135,856
130,698
137,069
130,010
123,447
123,087
120,016
120,483
Pre-Tax Pre-Provision Earnings --> D=A+B-C
36,968
39,432
47,987
47,738
60,780
56,343
46,399
54,731
MSR Valuation Adjustment --> E
(991)
(11,676)
(3,839)
2,540
8,895
(4,609)
(8,323)
8
Pre-Tax Pre-Provision Earnings (Excluding MSR Adjustment) -->
F=D-E 37,959
51,108
51,826
45,198
51,885
60,952
54,722
54,723
Tangible Common Equity / Tangible Assets (TCE/TA) and Tangible Book Per Share
Pro Forma
As of
As of
As of
12/31/2011*
12/31/2011
9/30/2011
12/31/2010
(In Thousands, Except Percentages and Per Share Amounts)
Common Equity --> A
$1,371,912
$1,262,912
$1,266,753
$1,222,244
Assets --> B
13,104,851
12,995,851
13,198,518
13,615,010
Intangibles --> C
287,910
287,910
288,723
289,720
Tangible Common Equity --> D=A-C
1,084,002
975,002
978,030
932,524
Tangible Assets --> E=B-C
12,816,941
12,707,941
12,909,795
13,325,290
Tangible Common Equity / Tangible Assets (%) -- > F=D/E
8.46%
7.67%
7.58%
7.00%
Common Shares Outstanding -- > G
83,484
83,489
83,482
Tangible Book Value Per Share -- > D=D/G
11.68
11.71
11.17
*Assumes $109 million of net proceeds from common stock offering
|