Attached files
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| 8-K - FORM 8-K - BANCORPSOUTH INC | d759593d8k.htm |
| EX-99.1 - EX-99.1 - BANCORPSOUTH INC | d759593dex991.htm |
 BancorpSouth, Inc.
Financial Information
As of and for the three months
ended June 30, 2014
Exhibit 99.2 |
 Forward Looking
Information 2
Certain statements contained in this presentation and the accompanying slides 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.
The Company cautions you not to place undue reliance on the forward-looking statements contained in
this this presentation and the accompanying slides 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, the impact of the Company’s restructuring of its management, the 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 this presentation and the accompanying slides. Unless otherwise noted, any quotes in this this
presentation and the accompanying slides can be attributed to company management.
|
 Q2 Highlights
As of and for the three months ended June 30, 2014
3
Net income of $30.9 million, or $0.32 per diluted share
Net operating income of $31.5 million, or $0.33 per diluted share
Acquisition of Knox Insurance Group, LLC
Generated net loan growth of $243.3 million, or 10.8% annualized
Net interest margin increased to 3.59%
Continued progress toward reducing core operating expenses
Continued credit quality improvement
Announced succession for President and Chief Operating Officer as well as
redesign of management structure |
 Recent
Quarterly Results Dollars in millions, except per share data
NM –
Not Meaningful
6/30/14
3/31/14
6/30/13
vs 3/31/14
Net interest revenue
103.1
$
101.5
$
98.2
$
1.5
%
5.0
%
Provision for credit losses
0.0
0.0
3.0
NM
(100.0)
Noninterest revenue
69.8
66.5
76.1
5.0
(8.2)
Noninterest expense
128.0
126.7
142.3
1.0
(10.1)
Income before income taxes
45.0
41.3
29.1
8.8
54.7
Income tax provision
14.1
12.9
8.3
9.4
69.5
Net income
30.9
$
28.4
$
20.8
$
8.5
%
48.7
%
Net income per share: diluted
0.32
$
0.30
$
0.22
$
6.7
%
45.5
%
Three Months Ended
% Change
vs 6/30/13
4 |
 Noninterest Revenue
Dollars in thousands
5
6/30/14
3/31/14
6/30/13
vs 3/31/14
Mortgage lending revenue
9,089
3,394
17,892
167.8
(49.2)
Credit card, debit card and merchant fees
8,567
7,843
8,324
9.2
2.9
Deposit service charges
12,437
12,536
12,824
(0.8)
(3.0)
Insurance commissions
28,621
31,599
25,862
(9.4)
10.7
Wealth management
5,828
5,916
5,802
(1.5)
0.4
Other
5,296
5,229
5,405
1.3
(2.0)
Total noninterest revenue
69,838
$
66,517
$
76,109
$
5.0
%
(8.2)
%
% of total revenue
40.4%
39.6%
43.7%
Three Months Ended
% Change
vs 6/30/13 |
 Mortgage and Insurance
Revenue Dollars in thousands
Mortgage Lending Revenue
6/30/14
3/31/14
12/31/13
9/30/13
6/30/13
Origination revenue
8,758
$
1,964
$
3,590
$
2,862
$
10,471
$
Servicing revenue
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
$
Production volume
291,010
$
197,110
$
222,282
$
341,854
$
434,966
$
Purchase money production
241,538
$
143,890
$
160,043
$
229,042
$
226,182
$
Mortgage loans sold
264,478
$
143,213
$
200,665
$
371,271
$
424,355
$
Margin on loans sold
3.31%
1.37%
1.79%
0.77%
2.47%
Insurance Commission Revenue
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
$
Three Months Ended
6 |
 Loan
Portfolio Dollars in millions
Net loans and leases
As of
6/30/14
3/31/14
6/30/13
Commercial and industrial
1,700
$
1,581
$
1,553
$
30.1
%
9.5
%
Real estate:
Consumer mortgages
2,072
2,047
1,880
4.8
10.2
Home equity
507
498
482
7.0
5.2
Agricultural
238
230
238
14.7
0.0
Commercial and industrial-owner occupied
1,506
1,488
1,376
4.7
9.4
Construction, acquisition and development
772
748
709
12.9
8.8
Commercial
1,902
1,848
1,755
11.7
8.4
Credit Cards
109
106
103
12.1
5.7
Other
507
522
582
(11.7)
(13.0)
Total
9,312
$
9,068
$
8,679
$
10.8
%
7.3
%
vs 6/30/13
% Change
vs 3/31/14
Annualized
7 |
 NPLs
decreased $19.6 million, or 21.0%, and NPAs declined $27.9 million, or 17.8%,
quarter over quarter OREO decreased $8.3 million, or 13.1%, quarter over
quarter Near-term delinquencies remained stable at $28.8 million
No provision for credit losses recorded, 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
Net charge-offs were $2.6 million for the second quarter compared with
$3.5 million for the first quarter of 2014 and $4.6 million for the second
quarter of 2013
57% of non-accrual loans were paying as agreed
Credit Quality Highlights
As of and for the three months ended June 30, 2014
“Paying
as
agreed”
includes
loans
<
30
days
past
due
with
payments
occurring
at
least
quarterly
8 |
 Non-Performing Loans
Dollars in millions
Net loans and leases
As of
6/30/14
3/31/14
6/30/13
Commercial and industrial
3.8
$
4.9
$
6.5
$
(23.2)
%
(41.8)
%
Real estate:
Consumer mortgages
26.7
27.8
37.6
(3.9)
(29.0)
Home equity
2.2
2.8
3.9
(19.4)
(42.2)
Agricultural
0.7
1.3
5.4
(45.5)
(87.2)
Commercial and industrial-owner occupied
12.8
18.7
21.1
(31.6)
(39.4)
Construction, acquisition and development
10.3
11.6
46.0
(10.9)
(77.6)
Commercial
14.9
23.5
42.6
(36.5)
(65.0)
Credit Cards
1.5
1.7
2.3
(12.4)
(37.2)
Other
0.8
1.1
2.5
(27.0)
(67.5)
Total
73.7
$
93.3
$
167.9
$
(21.0)
%
(56.1)
%
NPL's to net loans and leases
0.79%
1.03%
1.94%
% Change
vs 3/31/14
vs 6/30/13
9 |
 NPA
Improvement Total NPAs Have Declined 50% in the Last 12 Months
NPAs consist of NPLs and other real estate owned
NPLs consist of nonaccrual loans, loans 90+ days past due and restructured
loans 10
Dollars in millions
$0
$125
$250
$375
$500
$625
4Q 08
4Q 09
1Q 10
2Q 10
3Q 10
4Q 10
1Q 11
2Q 11
3Q 11
4Q 11
1Q 12
2Q 12
3Q 12
4Q 12
1Q 13
2Q 13
3Q 13
4Q 13
1Q 14
2Q 14
NPLs
OREO |
 Dollars in
millions Net Charge-offs
% Avg. Loans
11
$24
$23
$12
$13
$11
$6
$5
$8
$1
$4
$3
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
$0
$5
$10
$15
$20
$25
$30
12/31/11
3/31/12
6/30/12
9/30/12
12/31/12
3/31/13
6/30/13
9/30/13
12/31/13
3/31/14
6/30/14
Net charge-offs
Net charge-offs / average loans
Net charge-offs for the quarters ended as of the dates shown |
 Summary
Non-Financial Highlights
Extension of merger agreements
President and COO succession
Management restructure
Acquisition of Knox Insurance Group, LLC
Financial Highlights
Improvement in GAAP and operating earnings
Meaningful loan growth
Steady net interest margin
Progress toward reducing expenses
Continued credit quality improvement
Q&A
12 |