Exhibit 99.1

News Release

 

Contact:

 

William L. Prater		Will Fisackerly
Senior Executive Vice President and		Senior Vice President and
Chief Financial Officer		Director of Corporate Finance
662/680-2536		662/680-2475

BancorpSouth Announces Second Quarter 2014 Earnings of

$30.9 Million or $0.32 per Diluted Share; Merger Agreements with Ouachita Bancshares Corp. and Central Community Corporation Extended

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

Highlights for the second quarter of 2014 included:

 

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Net income of $30.9 million or $0.32 per diluted share.

 

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Net operating income of $31.5 million or $0.33 per diluted share.

 

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Acquired assets of Lafayette, Louisiana based Knox Insurance Group, LLC. Knox was formed in 1972 and currently produces annual revenues of approximately $3 million.

 

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Generated net loan growth of $243.3 million, or 10.8 percent annualized, which represents the fifth consecutive quarter of net loan growth.

 

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Mortgage loan production of $291.0 million, which contributed to mortgage lending revenue of $9.1 million for the quarter.

 

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Continued progress toward reducing core operating expenses.

 

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Net interest margin increased to 3.59 percent compared with 3.54 percent for the first quarter of 2014.

 

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Non-performing loans and leases (“NPLs”) declined $19.6 million, or 21.0 percent, compared to the first quarter of 2014, while non-performing assets (“NPAs”) decreased $27.9 million, or 17.8 percent, over the same period.

 

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Box 789 — Tupelo, MS 38802-0789 — (662) 680-2000

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BXS Announces Second Quarter Results And Transactions Update

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

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

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

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

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

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

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

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

 

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BXS Announces Second Quarter Results And Transactions Update

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

Net Interest Revenue

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

Asset, Deposit and Loan Activity

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

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

 

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BXS Announces Second Quarter Results And Transactions Update

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Provision for Credit Losses and Allowance for Credit Losses

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

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

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

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

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

 

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BXS Announces Second Quarter Results And Transactions Update

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Noninterest Revenue

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

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

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

Noninterest Expense

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

Capital Management

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

 

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BXS Announces Second Quarter Results And Transactions Update

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Transaction Closings and Announcements

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

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

On January 21, 2014, the Company announced the signing of a definitive merger agreement with Central Community Corporation, headquartered in Temple, Texas, pursuant to which Central Community Corporation will be merged with and into the Company. Central Community Corporation is the parent company of First State Bank Central Texas (“First State Bank”), which is headquartered in Austin, Texas. First State Bank operates 31 full-service banking offices in central Texas. As of June 30, 2014, Central Community Corporation, on a consolidated basis, reported total assets of $1.4 billion, total loans of $562.0 million and total deposits of $1.1 billion. Under the terms of the definitive agreement, the Company will issue approximately 7,250,000 shares of the Company’s common stock plus $28.5 million in cash for all outstanding shares of Central Community Corporation’s capital stock, subject to certain conditions and potential adjustments. The terms of the amended agreement provide for a minimum total deal value of $191.0 million but also allow Central Community Corporation to terminate the agreement if the average closing price of the Company’s common stock declines below a certain threshold prior to closing. The merger has been unanimously approved by the Board of Directors of each company and was approved by Central Community Corporation shareholders on April 24, 2014. As previously discussed, the merger agreement has been extended to allow

 

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for additional time to obtain the necessary regulatory approvals and to satisfy all closing conditions. The transaction is expected to close shortly after receiving all required regulatory approvals, though the Company can provide no assurance that the merger will close timely or at all.

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

Summary

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

Conference Call

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

About BancorpSouth, Inc.

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

Forward-Looking Statements

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

 

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

 

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BancorpSouth, Inc.

Selected Financial Information

(Dollars in thousands, except per share data)

(Unaudited)

 

		Quarter Ended				Quarter Ended				Quarter Ended				Quarter Ended				Quarter Ended
		6/30/2014				3/31/2014				12/31/2013				9/30/2013				6/30/2013
Earnings Summary:
Interest revenue		$	111,499			$	110,599			$	112,510			$	111,961			$	112,009
Interest expense			8,418				9,076				10,093				11,720				13,796
Net interest revenue			103,081				101,523				102,417				100,241				98,213
Provision for credit losses			—				—				—				500				3,000
Net interest revenue, after provision for credit losses			103,081				101,523				102,417				99,741				95,213
Noninterest revenue			69,838				66,517				65,125				62,514				76,109
Noninterest expense			127,954				126,707				127,830				129,397				142,251
Income before income taxes			44,965				41,333				39,712				32,858				29,071
Income tax expense			14,097				12,889				12,014				8,001				8,316
Net income		$	30,868			$	28,444			$	27,698			$	24,857			$	20,755
Balance Sheet - Period End Balances
Total assets		$	12,985,887			$	13,143,555			$	13,029,733			$	12,916,153			$	13,217,705
Total earning assets			11,794,445				11,948,897				11,814,060				11,765,785				11,961,836
Total securities			2,332,192				2,426,758				2,466,989				2,554,156				2,644,939
Loans and leases, net of unearned income			9,311,661				9,068,376				8,958,015				8,773,115				8,678,714
Allowance for credit losses			147,132				149,704				153,236				153,974				161,047
Total deposits			10,670,414				10,811,790				10,773,836				10,717,946				10,961,618
Long-term debt			83,835				85,835				81,714				83,500				33,500
Total shareholders’ equity			1,588,850				1,554,676				1,513,130				1,480,611				1,459,793
Balance Sheet - Average Balances
Total assets		$	12,933,879			$	13,087,128			$	12,955,127			$	12,928,505			$	13,146,040
Total earning assets			11,825,994				11,958,836				11,869,072				11,846,790				12,060,189
Total securities			2,394,045				2,452,178				2,511,888				2,598,786				2,616,274
Loans and leases, net of unearned income			9,232,743				9,022,155				8,830,917				8,682,966				8,588,673
Total deposits			10,650,077				10,825,308				10,739,352				10,745,945				10,938,489
Long-term debt			83,967				87,767				81,714				62,848				33,500
Total shareholders’ equity			1,574,588				1,537,897				1,501,928				1,474,047				1,475,211
Nonperforming Assets:
Non-accrual loans and leases		$	64,533			$	77,531			$	92,173			$	121,353			$	149,542
Loans and leases 90+ days past due, still accruing			2,406				1,949				1,226				1,479				1,440
Restructured loans and leases, still accruing			6,712				13,776				27,007				21,502				16,953
Non-performing loans (NPLs)			73,651				93,256				120,406				144,334				167,935
Other real estate owned			55,253				63,595				69,338				76,853				88,438
Non-performing assets (NPAs)		$	128,904			$	156,851			$	189,744			$	221,187			$	256,373
Financial Ratios and Other Data:
Return on average assets			0.96	%			0.88	%			0.85	%			0.76	%			0.63	%
Return on average shareholders’ equity			7.86	%			7.50	%			7.32	%			6.69	%			5.64	%
Return on tangible equity			9.74	%			9.28	%			9.16	%			8.29	%			7.12	%
Pre-tax pre-provision return on average assets			1.39	%			1.28	%			1.22	%			1.02	%			0.98	%
Non-interest income to average assets			2.17	%			2.06	%			1.99	%			1.92	%			2.32	%
Non-interest expense to average assets			3.97	%			3.93	%			3.91	%			3.97	%			4.34	%
Net interest margin-fully taxable equivalent			3.59	%			3.54	%			3.52	%			3.45	%			3.36	%
Net interest rate spread			3.48	%			3.43	%			3.39	%			3.32	%			3.21	%
Efficiency ratio (tax equivalent)			72.76	%			74.16	%			75.00	%			78.11	%			80.25	%
Loan/deposit ratio			87.27	%			83.87	%			83.15	%			81.85	%			79.17	%
Price to earnings mult (avg)			21.00				23.33				25.68				22.66				20.34
Market value to book value			148.53	%			154.13	%			160.04	%			128.22	%			115.42	%
Market value to book value (avg)			143.72	%			150.43	%			143.60	%			126.22	%			107.59	%
Market value to tangible book value			185.73	%			192.80	%			201.75	%			159.52	%			144.16	%
Market value to tangible book value (avg)			179.72	%			188.17	%			181.04	%			157.02	%			134.39	%
Headcount FTE			3,981				3,981				4,005				3,994				4,077

 

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BXS Announces Second Quarter Results And Transactions Update

Page 10

July 21, 2014

 

BancorpSouth, Inc.

Selected Financial Information

(Dollars in thousands, except per share data)

(Unaudited)

 

		Quarter Ended				Quarter Ended				Quarter Ended				Quarter Ended				Quarter Ended
		6/30/2014				3/31/2014				12/31/2013				9/30/2013				6/30/2013
Credit Quality Ratios:
Net charge-offs to average loans and leases (annualized)			0.11	%			0.16	%			0.03	%			0.35	%			0.21	%
Provision for credit losses to average loans and leases (annualized)			0.00	%			0.00	%			0.00	%			0.02	%			0.14	%
Allowance for credit losses to net loans and leases			1.58	%			1.65	%			1.71	%			1.76	%			1.86	%
Allowance for credit losses to non-performing loans and leases			199.77	%			160.53	%			127.27	%			106.68	%			95.90	%
Allowance for credit losses to non-performing assets			114.14	%			95.44	%			80.76	%			69.61	%			62.82	%
Non-performing loans and leases to net loans and leases			0.79	%			1.03	%			1.34	%			1.65	%			1.94	%
Non-performing assets to net loans and leases			1.38	%			1.73	%			2.12	%			2.52	%			2.95	%
Equity Ratios:
Total shareholders’ equity to total assets			12.24	%			11.83	%			11.61	%			11.46	%			11.04	%
Tangible shareholders’ equity to tangible assets			10.03	%			9.69	%			9.44	%			9.43	%			9.04	%
Capital Adequacy:
Tier 1 capital			13.09	%			13.18	%			12.99	%			13.25	%			14.21	%
Total capital			14.35	%			14.44	%			14.25	%			14.50	%			15.47	%
Tier 1 leverage capital			10.33	%			10.04	%			9.93	%			9.93	%			10.58	%
Estimated for current quarter
Common Share Data:
Basic earnings per share		$	0.32			$	0.30			$	0.29			$	0.26			$	0.22
Diluted earnings per share			0.32				0.30				0.29				0.26				0.22
Cash dividends per share			0.05				0.05				0.05				0.05				0.01
Book value per share			16.54				16.19				15.89				15.55				15.34
Tangible book value per share			13.23				12.95				12.60				12.50				12.28
Market value per share (last)			24.57				24.96				25.42				19.94				17.70
Market value per share (high)			25.55				26.24				25.54				20.77				18.06
Market value per share (low)			22.16				22.46				19.64				17.76				14.72
Market value per share (avg)			23.78				24.36				22.81				19.63				16.50
Dividend payout ratio			15.56	%			16.80	%			17.19	%			19.15	%			4.59	%
Total shares outstanding			96,046,057				96,004,679				95,231,691				95,211,602				95,190,797
Average shares outstanding - basic			96,034,475				95,629,890				95,217,203				95,201,238				95,177,167
Average shares outstanding - diluted			96,373,121				95,952,611				95,644,383				95,519,318				95,405,965
Yield/Rate:
(Taxable equivalent basis)
Loans, loans held for sale, and leases net of unearned income			4.38	%			4.48	%			4.52	%			4.55	%			4.62	%
Available-for-sale securities:
Taxable			1.45	%			1.50	%			1.51	%			1.50	%			1.55	%
Tax-exempt			5.44	%			5.58	%			5.52	%			5.61	%			5.47	%
Short-term investments			0.24	%			0.25	%			0.25	%			0.25	%			0.25	%
Total interest earning assets and revenue			3.88	%			3.85	%			3.86	%			3.85	%			3.82	%
Deposits:			0.28	%			0.31	%			0.34	%			0.36	%			0.39	%
Demand - interest bearing			0.17	%			0.17	%			0.18	%			0.18	%			0.21	%
Savings			0.12	%			0.13	%			0.13	%			0.12	%			0.14	%
Other time			0.97	%			1.06	%			1.13	%			1.18	%			1.23	%
Short-term borrowings			0.09	%			0.07	%			0.07	%			0.07	%			0.07	%
Total int bearing dep & s/t borrowings			0.37	%			0.39	%			0.43	%			0.45	%			0.48	%
Junior subordinated debt			2.81	%			2.86	%			2.96	%			6.57	%			7.16	%
Long-term debt			2.84	%			2.91	%			2.94	%			3.19	%			4.18	%
Total interest bearing liabilities and expense			0.40	%			0.42	%			0.46	%			0.53	%			0.61	%
Interest bearing liabilities to interest earning assets			71.98	%			73.51	%			72.91	%			74.15	%			74.70	%
Net interest tax equivalent adjustment		$	2,860			$	2,823			$	2,893			$	2,905			$	2,931

 

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BXS Announces Second Quarter Results And Transactions Update

Page 11

July 21, 2014

 

BancorpSouth, Inc.

Consolidated Balance Sheets

(Unaudited)

 

		Jun-14				Mar-14				Dec-13				Sep-13				Jun-13
		(Dollars in thousands)
Assets
Cash and due from banks		$	201,196			$	199,214			$	208,961			$	199,464			$	268,647
Interest bearing deposits with other banks			44,949				390,896				319,462				361,401				526,608
Available-for-sale securities, at fair value			2,332,192				2,426,758				2,466,989				2,554,156				2,644,939
Loans and leases			9,347,429				9,103,850				8,993,888				8,806,392				8,711,023
Less: Unearned income			35,768				35,474				35,873				33,277				32,309
Allowance for credit losses			147,132				149,704				153,236				153,974				161,047
Net loans and leases			9,164,529				8,918,672				8,804,779				8,619,141				8,517,667
Loans held for sale			105,643				62,867				69,593				77,114				111,574
Premises and equipment, net			310,515				314,367				315,260				314,441				313,079
Accrued interest receivable			40,697				42,666				42,150				43,034				41,425
Goodwill			291,498				286,800				286,800				275,173				275,173
Other identifiable intangibles			26,745				25,021				26,079				15,179				15,865
Bank owned life insurance			241,962				240,077				239,434				236,969				235,015
Other real estate owned			55,253				63,595				69,338				76,853				88,438
Other assets			170,708				172,622				180,888				143,228				179,275
Total Assets		$	12,985,887			$	13,143,555			$	13,029,733			$	12,916,153			$	13,217,705
Liabilities
Deposits:
Demand: Noninterest bearing		$	2,718,242			$	2,725,042			$	2,644,592			$	2,597,762			$	2,610,768
Interest bearing			4,511,760				4,583,481				4,582,450				4,493,359				4,667,041
Savings			1,299,203				1,297,344				1,234,130				1,220,227				1,210,497
Other time			2,141,209				2,205,923				2,312,664				2,406,598				2,473,312
Total deposits			10,670,414				10,811,790				10,773,836				10,717,946				10,961,618
Federal funds purchased and securities sold under agreement to repurchase			394,446				456,303				421,028				418,623				382,871
Short-term Federal Home Loan Bank borrowings and other short-term borrowing			2,000				—				—				—				—
Accrued interest payable			3,926				4,050				4,836				5,156				5,230
Junior subordinated debt securities			23,198				23,198				31,446				31,446				160,312
Long-term debt			83,835				85,835				81,714				83,500				33,500
Other liabilities			219,218				207,703				203,743				178,871				214,381
Total Liabilities			11,397,037				11,588,879				11,516,603				11,435,542				11,757,912
Shareholders’ Equity
Common stock			240,118				240,012				238,079				238,029				237,976
Capital surplus			321,952				320,969				312,900				312,798				312,074
Accumulated other comprehensive loss			(15,040	)			(22,060	)			(29,959	)			(39,389	)			(39,333	)
Retained earnings			1,041,820				1,015,755				992,110				969,173				949,076
Total Shareholders’ Equity			1,588,850				1,554,676				1,513,130				1,480,611				1,459,793
Total Liabilities & Shareholders’ Equity		$	12,985,887			$	13,143,555			$	13,029,733			$	12,916,153			$	13,217,705

 

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BXS Announces Second Quarter Results And Transactions Update

Page 12

July 21, 2014

 

BancorpSouth, Inc.

Consolidated Average Balance Sheets

(Unaudited)

 

		Jun-14				Mar-14				Dec-13				Sep-13				Jun-13
		(Dollars in thousands)
Assets
Cash and due from banks		$	157,813			$	168,056			$	163,948			$	163,322			$	160,615
Interest bearing deposits with other banks			145,530				449,207				471,695				487,075				765,729
Available-for-sale securities, at fair value			2,394,045				2,452,178				2,511,888				2,598,786				2,616,274
Loans and leases			9,269,469				9,058,081				8,864,983				8,715,894				8,621,849
Less: Unearned income			36,726				35,926				34,066				32,928				33,176
Allowance for credit losses			149,676				153,615				153,443				160,609				163,252
Net loans and leases			9,083,067				8,868,540				8,677,474				8,522,357				8,425,421
Loans held for sale			53,676				35,297				54,572				77,964				89,513
Premises and equipment, net			313,012				315,804				315,174				312,724				313,147
Accrued interest receivable			38,291				39,336				39,665				39,354				39,317
Goodwill			293,082				286,800				279,091				275,173				275,173
Other identifiable intangibles			25,271				25,420				18,658				15,446				16,142
Bank owned life insurance			240,736				239,969				237,657				235,708				233,670
Other real estate owned			60,822				69,086				77,211				86,545				91,505
Other assets			128,534				137,435				108,094				114,051				119,534
Total Assets		$	12,933,879			$	13,087,128			$	12,955,127			$	12,928,505			$	13,146,040
Liabilities
Deposits:
Demand: Noninterest bearing		$	2,683,939			$	2,647,376			$	2,667,667			$	2,551,812			$	2,522,577
Interest bearing			4,492,495				4,657,785				4,484,269				4,530,219				4,707,277
Savings			1,298,829				1,260,838				1,224,588				1,216,599				1,208,454
Other time			2,174,814				2,259,309				2,362,828				2,447,315				2,500,181
Total deposits			10,650,077				10,825,308				10,739,352				10,745,945				10,938,489
Federal funds purchased and securities sold under agreement to repurchase			435,505				458,436				469,245				441,807				399,789
Short-term Federal Home Loan Bank borrowings and other short-term borrowing			3,621				—				—				—				—
Accrued interest payable			3,926				4,400				5,051				5,391				5,481
Junior subordinated debt securities			23,198				23,748				31,446				86,074				160,312
Long-term debt			83,967				87,767				81,714				62,848				33,500
Other liabilities			158,997				149,572				126,391				112,393				133,258
Total Liabilities			11,359,291				11,549,231				11,453,199				11,454,458				11,670,829
Shareholders’ Equity
Common stock			240,071				238,853				238,038				237,997				237,956
Capital surplus			321,628				314,117				312,835				312,349				311,480
Accumulated other comprehensive loss			(16,663	)			(23,644	)			(32,267	)			(43,695	)			(15,277	)
Retained earnings			1,029,552				1,008,571				983,322				967,396				941,052
Total Shareholders’ Equity			1,574,588				1,537,897				1,501,928				1,474,047				1,475,211
Total Liabilities & Shareholders’ Equity		$	12,933,879			$	13,087,128			$	12,955,127			$	12,928,505			$	13,146,040

 

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BXS Announces Second Quarter Results And Transactions Update

Page 13

July 21, 2014

 

BancorpSouth, Inc.

Consolidated Condensed Statements of Income

(Dollars in thousands, except per share data)

(Unaudited)

 

		Quarter Ended																				Year Ended
		Jun-14				Mar-14				Dec-13				Sep-13				Jun-13				Jun-14				Jun-13
INTEREST REVENUE:
Loans and leases		$	99,962			$	98,744			$	99,989			$	98,836			$	98,524			$	198,706			$	197,616
Deposits with other banks			87				276				299				310				483				363				1,085
Available-for-sale securities:
Taxable			7,133				7,547				7,963				8,218				8,405				14,680				17,105
Tax-exempt			3,669				3,715				3,810				3,866				3,911				7,384				7,871
Loans held for sale			648				317				449				731				686				965				1,359
Total interest revenue			111,499				110,599				112,510				111,961				112,009				222,098				225,036
INTEREST EXPENSE:
Interest bearing demand			1,905				1,920				2,036				2,061				2,423				3,825				5,548
Savings			402				391				387				383				422				793				935
Other time			5,249				5,890				6,746				7,271				7,671				11,139				15,712
Federal funds purchased and securities sold under agreement to repurchase			80				78				84				80				70				158				133
Long-term debt			619				629				605				501				349				1,248				697
Junior subordinated debt			162				168				235				1,424				2,860				330				5,717
Other			1				—				—				—				1				1				3
Total interest expense			8,418				9,076				10,093				11,720				13,796				17,494				28,745
Net interest revenue			103,081				101,523				102,417				100,241				98,213				204,604				196,291
Provision for credit losses			—				—				—				500				3,000				—				7,000
Net interest revenue, after provision for credit losses			103,081				101,523				102,417				99,741				95,213				204,604				189,291
NONINTEREST REVENUE:
Mortgage lending			9,089				3,394				9,605				5,134				17,892				12,483				30,238
Credit card, debit card and merchant fees			8,567				7,843				8,324				8,834				8,324				16,410				15,847
Deposit service charges			12,437				12,536				13,570				13,679				12,824				24,973				25,656
Security gains (losses), net			5				(4	)			29				(5	)			3				1				22
Insurance commissions			28,621				31,599				21,397				23,800				25,862				60,220				52,503
Wealth Management			5,828				5,916				5,320				6,057				5,802				11,744				11,589
Other			5,291				5,233				6,880				5,015				5,402				10,524				11,572
Total noninterest revenue			69,838				66,517				65,125				62,514				76,109				136,355				147,427
NONINTEREST EXPENSE:
Salaries and employee benefits			74,741				78,883				75,466				73,532				78,284				153,624				157,698
Occupancy, net of rental income			10,245				10,287				9,935				10,360				10,577				20,532				20,814
Equipment			4,169				4,499				4,298				4,555				4,585				8,668				9,533
Deposit insurance assessments			2,035				1,600				2,687				3,325				2,939				3,635				5,743
Voluntary early retirement expense			—				—				—				—				10,850				—				10,850
Write-off and amortization of bond issue cost			12				12				12				2,907				38				24				76
Other			36,752				31,426				35,432				34,718				34,978				68,178				72,908
Total noninterest expenses			127,954				126,707				127,830				129,397				142,251				254,661				277,622
Income before income taxes			44,965				41,333				39,712				32,858				29,071				86,298				59,096
Income tax expense			14,097				12,889				12,014				8,001				8,316				26,986				17,536
Net income		$	30,868			$	28,444			$	27,698			$	24,857			$	20,755			$	59,312			$	41,560
Net income per share: Basic		$	0.32			$	0.30			$	0.29			$	0.26			$	0.22			$	0.62			$	0.44
Diluted		$	0.32			$	0.30			$	0.29			$	0.26			$	0.22			$	0.62			$	0.44

 

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BXS Announces Second Quarter Results And Transactions Update

Page 14

July 21, 2014

 

BancorpSouth, Inc.

Selected Loan Data

(Dollars in thousands)

(Unaudited)

 

		Quarter Ended
		Jun-14				Mar-14				Dec-13				Sep-13				Jun-13
LOAN AND LEASE PORTFOLIO:
Commercial and industrial		$	1,699,803			$	1,581,251			$	1,529,249			$	1,503,809			$	1,552,762
Real estate
Consumer mortgages			2,071,503				2,047,001				1,976,073				1,931,171				1,880,338
Home equity			506,988				498,283				494,339				490,361				482,068
Agricultural			238,003				229,602				234,576				234,547				237,914
Commercial and industrial-owner occupied			1,505,679				1,488,380				1,473,320				1,422,077				1,375,711
Construction, acquisition and development			772,162				748,027				741,458				723,609				709,499
Commercial real estate			1,901,759				1,847,983				1,846,039				1,795,352				1,754,841
Credit cards			109,186				105,988				111,328				105,112				103,251
All other			506,578				521,861				551,633				567,077				582,330
Total loans		$	9,311,661			$	9,068,376			$	8,958,015			$	8,773,115			$	8,678,714
ALLOWANCE FOR CREDIT LOSSES:
Balance, beginning of period		$	149,704			$	153,236			$	153,974			$	161,047			$	162,601
Loans and leases charged off:
Commercial and industrial			(860	)			(201	)			(837	)			(889	)			(1,008	)
Real estate
Consumer mortgages			(1,682	)			(1,945	)			(1,435	)			(2,996	)			(3,114	)
Home equity			(438	)			(318	)			(287	)			(379	)			(201	)
Agricultural			(18	)			(696	)			(238	)			(169	)			(327	)
Commercial and industrial-owner occupied			(936	)			(1,206	)			(1,041	)			(1,684	)			(830	)
Construction, acquisition and development			(41	)			(1,666	)			(1,784	)			(1,727	)			(2,036	)
Commercial real estate			(361	)			(901	)			(1,039	)			(2,441	)			(3,720	)
Credit cards			(608	)			(559	)			(559	)			(750	)			(557	)
All other			(671	)			(583	)			(1,108	)			(837	)			(462	)
Total loans charged off			(5,615	)			(8,075	)			(8,328	)			(11,872	)			(12,255	)
Recoveries:
Commercial and industrial			359				1,076				1,361				820				747
Real estate
Consumer mortgages			956				538				1,735				1,516				708
Home equity			182				184				97				66				184
Agricultural			26				9				34				48				120
Commercial and industrial-owner occupied			78				358				734				297				1,439
Construction, acquisition and development			808				1,637				2,483				953				360
Commercial real estate			226				323				784				221				3,634
Credit cards			135				131				133				164				184
All other			273				287				229				214				325
Total recoveries			3,043				4,543				7,590				4,299				7,701
Net charge-offs			(2,572	)			(3,532	)			(738	)			(7,573	)			(4,554	)
Provision charged to operating expense			—				—				—				500				3,000
Balance, end of period		$	147,132			$	149,704			$	153,236			$	153,974			$	161,047
Average loans for period		$	9,232,743			$	9,022,155			$	8,830,917			$	8,682,966			$	8,588,673
Ratio:
Net charge-offs to average loans (annualized)			0.11	%			0.16	%			0.03	%			0.35	%			0.21	%

 

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BXS Announces Second Quarter Results And Transactions Update

Page 15

July 21, 2014

 

BancorpSouth, Inc.

Selected Loan Data

(Dollars in thousands)

(Unaudited)

 

		Quarter Ended
		Jun-14				Mar-14				Dec-13				Sep-13				Jun-13
NON-PERFORMING ASSETS
NON-PERFORMING LOANS AND LEASES:
Nonaccrual Loans and Leases
Commercial and industrial		$	2,917			$	3,023			$	3,079			$	5,498			$	6,225
Real estate
Consumer mortgages			24,355				24,353				25,645				30,569				34,226
Home equity			2,116				2,740				3,695				3,287				3,862
Agricultural			595				651				1,260				4,086				5,007
Commercial and industrial-owner occupied			11,094				14,122				18,568				18,138				17,084
Construction, acquisition and development			9,202				9,968				17,567				26,127				39,315
Commercial real estate			13,406				21,496				20,972				31,468				40,940
Credit cards			132				168				119				196				398
All other			716				1,010				1,268				1,984				2,485
Total nonaccrual loans and leases		$	64,533			$	77,531			$	92,173			$	121,353			$	149,542
Loans and Leases 90+ Days Past Due, Still Accruing:
Commercial and industrial		$	302			$	287			$	27			$	15			$	—
Real estate
Consumer mortgages			1,607				1,307				888				1,178				1,107
Home equity			116				12				—				—				—
Agricultural			100				—				—				—				—
Commercial and industrial-owner occupied			—				—				—				—				—
Construction, acquisition and development			—				—				—				—				—
Commercial real estate			—				—				311				—				120
Credit cards			281				297				—				263				213
All other			—				46				—				23				—
Total loans and leases 90+ days past due, still accruing			2,406				1,949				1,226				1,479				1,440
Restructured Loans and Leases, Still Accruing			6,712				13,776				27,007				21,502				16,953
Total non-performing loans and leases			73,651				93,256				120,406				144,334				167,935
OTHER REAL ESTATE OWNED:			55,253				63,595				69,338				76,853				88,438
Total Non-performing Assets		$	128,904			$	156,851			$	189,744			$	221,187			$	256,373
Additions to Nonaccrual Loans and Leases During the Quarter		$	13,748			$	22,479			$	18,556			$	21,182			$	21,890
Loans and Leases 30-89 Days Past Due, Still Accruing:
Commercial and industrial		$	3,605			$	2,616			$	2,817			$	1,909			$	1,517
Real estate
Consumer mortgages			11,448				12,236				14,150				10,914				11,887
Home equity			960				1,587				1,828				1,278				1,315
Agricultural			1,122				302				495				761				569
Commercial and industrial-owner occupied			6,340				3,248				4,081				1,995				1,323
Construction, acquisition and development			1,616				2,848				1,993				3,920				1,835
Commercial real estate			1,658				3,953				5,574				5,818				535
Credit cards			556				592				655				688				668
All other			1,490				963				2,189				1,634				1,591
Total Loans and Leases 30-89 days past due, still accruing		$	28,795			$	28,345			$	33,782			$	28,917			$	21,240
Credit Quality Ratios:
Provision for credit losses to average loans and leases (annualized)			0.00	%			0.00	%			0.00	%			0.02	%			0.14	%
Allowance for credit losses to net loans and leases			1.58	%			1.65	%			1.71	%			1.76	%			1.86	%
Allowance for credit losses to non-performing loans and leases			199.77	%			160.53	%			127.27	%			106.68	%			95.90	%
Allowance for credit losses to non-performing assets			114.14	%			95.44	%			80.76	%			69.61	%			62.82	%
Non-performing loans and leases to net loans and leases			0.79	%			1.03	%			1.34	%			1.65	%			1.94	%
Non-performing assets to net loans and leases			1.38	%			1.73	%			2.12	%			2.52	%			2.95	%

 

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BXS Announces Second Quarter Results And Transactions Update

Page 16

July 21, 2014

 

BancorpSouth, Inc.

Selected Loan Data

(Dollars in thousands)

(Unaudited)

 

		Quarter Ended
		Jun-14				Mar-14				Dec-13				Sep-13				Jun-13
REAL ESTATE CONSTRUCTION, ACQUISITION AND DEVELOPMENT (“CAD”) PORTFOLIO:
Outstanding Balance
Multi-family construction		$	15,874			$	11,339			$	7,702			$	7,974			$	8,902
One-to-four family construction			226,252				221,790				224,286				203,988				202,603
Recreation and all other loans			35,364				36,897				36,868				41,762				42,132
Commercial construction			192,605				177,264				150,847				139,041				117,901
Commercial acquisition and development			122,380				122,051				128,157				136,206				136,174
Residential acquisition and development			179,687				178,686				193,598				194,638				201,787
Total outstanding balance		$	772,162			$	748,027			$	741,458			$	723,609			$	709,499
Nonaccrual CAD Loans
Multi-family construction		$	—			$	—			$	—			$	—			$	—
One-to-four family construction			2,603				2,824				2,937				3,249				6,193
Recreation and all other loans			981				919				728				782				800
Commercial construction			—				—				865				1,686				2,765
Commercial acquisition and development			1,835				2,224				6,890				11,150				14,225
Residential acquisition and development			3,783				4,001				6,147				9,260				15,332
Total nonaccrual CAD loans		$	9,202			$	9,968			$	17,567			$	26,127			$	39,315
CAD Loans 90+ Days Past Due, Still Accruing:
Multi-family construction		$	—			$	—			$	—			$	—			$	—
One-to-four family construction			—				—				—				—				—
Recreation and all other loans			—				—				—				—				—
Commercial construction			—				—				—				—				—
Commercial acquisition and development			—				—				—				—				—
Residential acquisition and development			—				—				—				—				—
Total CAD loans 90+ days past due, still accruing		$	—			$	—			$	—			$	—			$	—
Restructured CAD Loans, Still Accruing
Multi-family construction		$	—			$	—			$	—			$	—			$	—
One-to-four family construction			—				—				1,274				1,028				867
Recreation and all other loans			11				13				13				15				15
Commercial construction			—				—				346				348				351
Commercial acquisition and development			395				402				1,990				2,010				2,030
Residential acquisition and development			700				1,192				3,111				3,162				3,458
Total restructured CAD loans, still accruing		$	1,106			$	1,607			$	6,734			$	6,563			$	6,721
Total Non-performing CAD loans		$	10,308			$	11,575			$	24,301			$	32,690			$	46,036
CAD NPL as a % of Outstanding CAD Balance
Multi-family construction			—				—				—				—				—
One-to-four family construction			1.2	%			1.3	%			1.9	%			2.1	%			3.5	%
Recreation and all other loans			2.8	%			2.5	%			2.0	%			1.9	%			1.9	%
Commercial construction			0.0	%			0.0	%			0.8	%			1.5	%			2.6	%
Commercial acquisition and development			1.8	%			2.2	%			6.9	%			9.7	%			11.9	%
Residential acquisition and development			2.5	%			2.9	%			4.8	%			6.4	%			9.3	%
Total CAD NPL as a % of outstanding CAD balance			1.3	%			1.5	%			3.3	%			4.5	%			6.5	%

 

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BXS Announces Second Quarter Results And Transactions Update

Page 17

July 21, 2014

 

BancorpSouth, Inc.

Selected Loan Data

(Dollars in thousands)

(Unaudited)

 

		June 30, 2014
						Special
		Pass				Mention				Substandard				Doubtful				Loss				Impaired				Total
LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE:
Commercial and industrial		$	1,650,893			$	16,307			$	31,157			$	—			$	—			$	1,446			$	1,699,803
Real estate
Consumer mortgages			1,983,165				—				82,769				—				—				5,569				2,071,503
Home equity			496,451				—				9,903				—				—				634				506,988
Agricultural			224,337				509				12,724				—				—				433				238,003
Commercial and industrial-owner occupied			1,435,618				3,782				61,508				342				—				4,429				1,505,679
Construction, acquisition and development			721,572				255				43,238				576				—				6,521				772,162
Commercial real estate			1,814,209				—				76,286				350				—				10,914				1,901,759
Credit cards			109,186				—				—				—				—				—				109,186
All other			495,292				—				11,104				—				—				182				506,578
Total loans		$	8,930,723			$	20,853			$	328,689			$	1,268			$	—			$	30,128			$	9,311,661
		March 31, 2014
						Special
		Pass				Mention				Substandard				Doubtful				Loss				Impaired				Total
LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE:
Commercial and industrial		$	1,535,172			$	13,043			$	31,741			$	—			$	—			$	1,295			$	1,581,251
Real estate
Consumer mortgages			1,936,837				243				104,486				310				—				5,125				2,047,001
Home equity			483,746				343				13,456				96				—				642				498,283
Agricultural			210,346				563				18,257				—				—				436				229,602
Commercial and industrial-owner occupied			1,420,813				3,887				56,124				510				—				7,046				1,488,380
Construction, acquisition and development			697,094				1,556				40,713				768				—				7,896				748,027
Commercial real estate			1,757,573				—				71,374				198				—				18,838				1,847,983
Credit cards			105,988				—				—				—				—				—				105,988
All other			509,729				68				11,876				—				—				188				521,861
Total loans		$	8,657,298			$	19,703			$	348,027			$	1,882			$	—			$	41,466			$	9,068,376

 

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BXS Announces Second Quarter Results And Transactions Update

Page 18

July 21, 2014

 

BancorpSouth, Inc.

Geographical Information

(Dollars in thousands)

(Unaudited)

 

		June 30, 2014
		Alabama and Florida Panhandle				Arkansas*				Mississippi*				Missouri				Greater Memphis Area				Tennessee*				Texas and Louisiana				Corporate Banking and Other				Total
LOAN AND LEASE PORTFOLIO:
Commercial and industrial		$	85,845			$	166,736			$	282,645			$	38,309			$	22,403			$	86,494			$	296,170			$	721,201			$	1,699,803
Real estate
Consumer mortgages			162,767				268,149				698,709				64,881				110,498				162,614				511,039				92,846				2,071,503
Home equity			67,945				38,782				164,668				20,890				68,304				77,465				66,340				2,594				506,988
Agricultural			7,338				71,448				56,598				3,399				13,826				12,260				68,723				4,411				238,003
Commercial and industrial-owner occupied			175,413				168,289				479,599				64,571				90,239				90,953				301,538				135,077				1,505,679
Construction, acquisition and development			109,801				67,822				199,662				19,013				77,028				110,705				164,969				23,162				772,162
Commercial real estate			270,053				320,961				278,943				193,572				104,944				109,130				438,417				185,739				1,901,759
Credit cards			—				—				—				—				—				—				—				109,186				109,186
All other			29,996				43,696				133,041				3,428				37,399				35,431				75,109				148,478				506,578
Total loans		$	909,158			$	1,145,883			$	2,293,865			$	408,063			$	524,641			$	685,052			$	1,922,305			$	1,422,694			$	9,311,661
CAD PORTFOLIO:
Multi-family construction		$	4,498			$	997			$	481			$	—			$	—			$	7,017			$	2,881			$	—			$	15,874
One-to-four family construction			36,251				17,170				43,795				3,823				12,530				68,413				43,466				804				226,252
Recreation and all other loans			1,361				6,260				12,139				568				4,440				1,125				9,471				—				35,364
Commercial construction			31,247				14,079				55,741				3,558				20,691				9,701				39,362				18,226				192,605
Commercial acquisition and development			10,560				15,963				35,821				5,429				17,865				8,369				27,524				849				122,380
Residential acquisition and development			25,884				13,353				51,685				5,635				21,502				16,080				42,265				3,283				179,687
Total CAD loans		$	109,801			$	67,822			$	199,662			$	19,013			$	77,028			$	110,705			$	164,969			$	23,162			$	772,162
NON-PERFORMING LOANS AND LEASES:
Commercial and industrial		$	1,294			$	1,063			$	397			$	172			$	18			$	32			$	260			$	565			$	3,801
Real estate
Consumer mortgages			1,716				1,701				7,904				382				2,748				2,577				2,258				7,377				26,663
Home equity			531				104				352				—				268				422				553				2				2,232
Agricultural			100				—				147				266				—				—				182				—				695
Commercial and industrial-owner occupied			1,266				2,965				4,595				104				910				1,567				1,359				2				12,768
Construction, acquisition and development			1,690				234				3,424				—				1,517				296				3,145				2				10,308
Commercial real estate			3,656				63				1,946				646				3,354				3,718				656				877				14,916
Credit cards			—				—				—				—				—				—				—				1,456				1,456
All other			9				44				311				—				11				244				191				2				812
Total loans		$	10,262			$	6,174			$	19,076			$	1,570			$	8,826			$	8,856			$	8,604			$	10,283			$	73,651
NON-PERFORMING LOANS AND LEASES AS A PERCENTAGE OF OUTSTANDING:
Commercial and industrial			1.51	%			0.64	%			0.14	%			0.45	%			0.08	%			0.04	%			0.09	%			0.08	%			0.22	%
Real estate
Consumer mortgages			1.05	%			0.63	%			1.13	%			0.59	%			2.49	%			1.58	%			0.44	%			7.95	%			1.29	%
Home equity			0.78	%			0.27	%			0.21	%			0.00	%			0.39	%			0.54	%			0.83	%			0.08	%			0.44	%
Agricultural			1.36	%			0.00	%			0.26	%			7.83	%			0.00	%			0.00	%			0.26	%			0.00	%			0.29	%
Commercial and industrial-owner occupied			0.72	%			1.76	%			0.96	%			0.16	%			1.01	%			1.72	%			0.45	%			0.00	%			0.85	%
Construction, acquisition and development			1.54	%			0.35	%			1.71	%			0.00	%			1.97	%			0.27	%			1.91	%			0.01	%			1.33	%
Commercial real estate			1.35	%			0.02	%			0.70	%			0.33	%			3.20	%			3.41	%			0.15	%			0.47	%			0.78	%
Credit cards			—				—				—				—				—				—				—				1.33	%			1.33	%
All other			0.03	%			0.10	%			0.23	%			0.00	%			0.03	%			0.69	%			0.25	%			0.00	%			0.16	%
Total loans			1.13	%			0.54	%			0.83	%			0.38	%			1.68	%			1.29	%			0.45	%			0.72	%			0.79	%

 

*	Excludes the Greater Memphis Area.

 

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BXS Announces Second Quarter Results And Transactions Update

Page 19

July 21, 2014

 

BancorpSouth, Inc.

Selected Additional Information

(Dollars in thousands)

(Unaudited)

 

		June 30, 2014
		Alabama and Florida Panhandle				Arkansas*				Mississippi*				Missouri				Greater Memphis Area				Tennessee*				Texas and Louisiana				Other				Total
OTHER REAL ESTATE OWNED:
Commercial and industrial		$	84			$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	84
Real estate
Consumer mortgages			979				223				1,999				29				34				83				5				—				3,352
Home equity			—				—				370				—				—				—				—				—				370
Agricultural			—				—				216				—				462				—				—				—				678
Commercial and industrial-owner occupied			—				33				2,543				—				824				—				60				—				3,460
Construction, acquisition and development			11,084				91				10,286				794				17,739				3,283				239				—				43,516
Commercial real estate			352				288				1,893				—				980				—				—				—				3,513
All other			—				—				148				—				—				38				94				—				280
Total loans		$	12,499			$	635			$	17,455			$	823			$	20,039			$	3,404			$	398			$	—			$	55,253
		Quarter Ended
		Jun-14				Mar-14				Dec-13				Sep-13				Jun-13
OTHER REAL ESTATE OWNED:
Balance, beginning of period		$	63,595			$	69,338			$	76,853			$	88,438			$	96,314
Additions to foreclosed properties
New foreclosed property			4,144				4,855				7,868				9,536				9,639
Reductions in foreclosed properties
Sales			(10,269	)			(8,767	)			(14,272	)			(19,333	)			(15,641	)
Writedowns			(2,217	)			(1,831	)			(1,111	)			(1,788	)			(1,874	)
Balance, end of period		$	55,253			$	63,595			$	69,338			$	76,853			$	88,438
FORECLOSED PROPERTY EXPENSE
Loss (gain) on sale of other real estate owned		$	1,073			$	466			$	949			$	352			$	166
Writedown of other real estate owned			2,217				1,831				1,111				1,788				1,874
Other foreclosed property expense			912				258				771				1,158				1,205
Total foreclosed property expense		$	4,202			$	2,555			$	2,831			$	3,298			$	3,245

 

*	Excludes the Greater Memphis Area.

 

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BXS Announces Second Quarter Results And Transactions Update

Page 20

July 21, 2014

 

BancorpSouth, Inc.

Noninterest Revenue and Expense

(Dollars in thousands)

(Unaudited)

 

		Quarter Ended
		Jun-14				Mar-14				Dec-13				Sep-13				Jun-13
NONINTEREST REVENUE:
Mortgage lending		$	9,089			$	3,394			$	9,605			$	5,134			$	17,892
Credit card, debit card and merchant fees			8,567				7,843				8,324				8,834				8,324
Deposit service charges			12,437				12,536				13,570				13,679				12,824
Securities gains (losses), net			5				(4	)			29				(5	)			3
Insurance commissions			28,621				31,599				21,397				23,800				25,862
Trust income			3,624				3,568				3,717				3,332				3,192
Annuity fees			695				772				566				719				543
Brokerage commissions and fees			1,509				1,576				1,037				2,005				2,068
Bank-owned life insurance			1,885				1,849				2,466				1,954				2,008
Other miscellaneous income			3,406				3,384				4,414				3,062				3,393
Total noninterest revenue		$	69,838			$	66,517			$	65,125			$	62,514			$	76,109
NONINTEREST EXPENSE:
Salaries and employee benefits		$	74,741			$	78,883			$	75,466			$	73,532			$	78,284
Occupancy, net of rental income			10,245				10,287				9,935				10,360				10,577
Equipment			4,169				4,499				4,298				4,555				4,585
Deposit insurance assessments			2,035				1,600				2,687				3,325				2,939
Voluntary early retirement expense			—				—				—				—				10,850
Amortization of bond issue cost			12				12				12				2,907				38
Advertising			1,331				632				1,436				1,210				1,169
Foreclosed property expense			4,202				2,555				2,831				3,298				3,245
Telecommunications			2,258				2,248				1,971				2,227				2,184
Public relations			857				822				972				1,105				1,175
Data processing			2,863				2,741				2,939				2,772				2,783
Computer software			2,851				2,423				2,197				2,190				2,146
Amortization of intangibles			1,148				1,058				819				686				722
Legal			3,002				1,878				2,537				4,626				3,896
Merger expense			1,009				560				—				—				—
Postage and shipping			1,116				1,287				1,133				1,027				1,074
Other miscellaneous expense			16,115				15,222				18,597				15,577				16,584
Total noninterest expense		$	127,954			$	126,707			$	127,830			$	129,397			$	142,251
INSURANCE COMMISSIONS:
Property and casualty commissions		$	21,576			$	19,987			$	15,588			$	18,372			$	18,762
Life and health commissions			5,549				5,010				4,525				4,061				5,093
Risk management income			617				705				648				628				573
Other			879				5,897				636				739				1,434
Total insurance commissions		$	28,621			$	31,599			$	21,397			$	23,800			$	25,862

 

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BXS Announces Second Quarter Results And Transactions Update

Page 21

July 21, 2014

 

BancorpSouth, Inc.

Selected Additional Information

(Dollars in thousands)

(Unaudited)

 

		Quarter Ended
		Jun-14				Mar-14				Dec-13				Sep-13				Jun-13
MORTGAGE SERVICING RIGHTS:
Fair value, beginning of period		$	53,436			$	54,662			$	51,025			$	49,001			$	41,478
Additions to mortgage servicing rights:
Originations of servicing assets			2,565				1,460				1,984				3,826				4,012
Changes in fair value:
Due to payoffs/paydowns			(1,616	)			(1,138	)			(1,240	)			(1,560	)			(1,739	)
Due to change in valuation inputs or assumptions used in the valuation model			(2,111	)			(1,547	)			2,894				(240	)			5,252
Other changes in fair value			(2	)			(1	)			(1	)			(2	)			(2	)
Fair value, end of period		$	52,272			$	53,436			$	54,662			$	51,025			$	49,001
MORTGAGE LENDING REVENUE:
Origination		$	8,758			$	1,964			$	3,590			$	2,862			$	10,471
Servicing			4,058				4,115				4,361				4,072				3,908
MSR payoffs/paydowns			(1,616	)			(1,138	)			(1,240	)			(1,560	)			(1,739	)
MSR valuation adjustment			(2,111	)			(1,547	)			2,894				(240	)			5,252
Total mortgage lending revenue		$	9,089			$	3,394			$	9,605			$	5,134			$	17,892
Mortgage loans serviced		$	5,630,192			$	5,568,828			$	5,577,325			$	5,543,619			$	5,393,580
MSR/mtg loans serviced			0.93	%			0.96	%			0.98	%			0.92	%			0.91	%
AVAILABLE-FOR-SALE SECURITIES, at fair value
U.S. Government agencies		$	1,333,368			$	1,419,269			$	1,458,349			$	1,519,459			$	1,581,570
Government agency issued residential mortgage-back securities			229,414				241,596				250,234				268,367				292,586
Government agency issued commercial mortgage-back securities			237,321				234,059				230,912				229,412				227,381
Obligations of states and political subdivisions			520,897				523,811				519,405				528,889				535,337
Other			11,192				8,023				8,089				8,029				8,065
Total available-for-sale securities		$	2,332,192			$	2,426,758			$	2,466,989			$	2,554,156			$	2,644,939

 

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BXS Announces Second Quarter Results And Transactions Update

Page 22

July 21, 2014

 

BancorpSouth, Inc.

Reconciliation of Non-GAAP Measures

(Dollars in thousands, except per share amounts)

(Unaudited)

Management evaluates the Company’s capital position and operating performance by utilizing certain financial measures not calculated in accordance with U.S. Generally Accepted Accounting Principles (GAAP), including tangible shareholders’ equity to tangible assets, return on tangible equity, pre-tax pre-provision return on average assets, tangible book value per share, and operating earnings per share. The Company has included these non-GAAP financial measures in this news release for the applicable periods presented. Management believes that the presentation of these non-GAAP financial measures (i) provides important supplemental information that contributes to a proper understanding of the Company’s operating performance, (ii) presents a complete understanding of factors and trends affecting the Company’s business and (iii) allows investors to evaluate the Company’s performance in a manner similar to Management, the financial services industry, bank stock analysts and bank regulators. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are presented in the tables below. These non-GAAP financial measures should not be considered as substitutes for GAAP financial measures, and the Company strongly encourages investors to review the GAAP financial measures included in this news release and not to place undue reliance upon any single financial measure. In addition, because non-GAAP financial measures are not standardized, it may not be possible to compare the non-GAAP financial measures presented in this news release with other companies’ non-GAAP financial measures having the same or similar names.

Reconciliation of Pre-tax, Pre-provision Earnings and Net Operating Income:

 

		Quarter ended
		6/30/2014				3/31/2014				12/31/2013				9/30/2013				6/30/2013
Net income		$	30,868			$	28,444			$	27,698			$	24,857			$	20,755
Plus: Provision for credit losses			—				—				—				500				3,000
Income tax expense			14,097				12,889				12,014				8,001				8,316
Pre-tax, pre-provision earnings		$	44,965			$	41,333			$	39,712			$	33,358			$	32,071
Net income		$	30,868			$	28,444			$	27,698			$	24,857			$	20,755
Plus: Merger expense, net of tax			626				347				—				—				—
VERO expense, net of tax			—				—				—				—				6,727
Legal charge, net of tax			—				—				—				1,085				—
Write off unamortized TRUPS issue cost, net of tax			—				—				—				1,789				—
Net operating income		$	31,494			$	28,791			$	27,698			$	27,731			$	27,482

 

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BXS Announces Second Quarter Results And Transactions Update

Page 23

July 21, 2014

 

Reconciliation of Non-GAAP Measures

(Dollars in thousands, except per share amounts)

(Unaudited)

Reconciliation of Tangible Assets and Tangible Shareholders’ Equity to

Total Assets and Total Shareholders’ Equity:

 

		Quarter ended
		6/30/2014				3/31/2014				12/31/2013				9/30/2013				6/30/2013
Tangible assets
Total assets		$	12,985,887			$	13,143,555			$	13,029,733			$	12,916,153			$	13,217,705
Less: Goodwill			291,498				286,800				286,800				275,173				275,173
Other identifiable intangible assets			26,745				25,021				26,079				15,179				15,865
Total tangible assets		$	12,667,644			$	12,831,734			$	12,716,854			$	12,625,801			$	12,926,667
Tangible shareholders’ equity
Total shareholders’ equity		$	1,588,850			$	1,554,676			$	1,513,130			$	1,480,611			$	1,459,793
Less: Goodwill			291,498				286,800				286,800				275,173				275,173
Other identifiable intangible assets			26,745				25,021				26,079				15,179				15,865
Total tangible shareholders’ equity		$	1,270,607			$	1,242,855			$	1,200,251			$	1,190,259			$	1,168,755
Total average assets		$	12,933,879			$	13,087,128			$	12,955,127			$	12,928,505			$	13,146,040
Total common shares outstanding			96,046,057				96,004,679				95,231,691				95,211,602				95,190,797
Average shares outstanding-diluted			96,373,121				95,952,611				96,644,383				95,519,318				95,405,965
Tangible shareholders’ equity to tangible assets*			10.03	%			9.69	%			9.44	%			9.43	%			9.04	%
Return on tangible equity **			9.74	%			9.28	%			9.16	%			8.29	%			7.12	%
Pre-tax pre-provision return on average assets ***			1.39	%			1.28	%			1.22	%			1.02	%			0.98	%
Tangible book value per share****		$	13.23			$	12.95			$	12.60			$	12.50			$	12.28
Operating earnings per share*****		$	0.33			$	0.30			$	0.29			$	0.29			$	0.29

 

*	Tangible shareholders’ equity to tangible assets is defined by the Company as total shareholders’ equity less goodwill and other identifiable intangible assets, divided by the difference of total assets less goodwill and other identifiable intangible assets.

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

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

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

*****

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

 

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