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| 8-K - 8-K - BANCORPSOUTH INC | d855924d8k.htm |
| EX-99.1 - EX-99.1 - BANCORPSOUTH INC | d855924dex991.htm |
 BancorpSouth, Inc.
Financial Information
As of and for the three months
ended December 31, 2014
Exhibit 99.2 |
 Forward Looking Information
2
Certain
statements
contained
in
this
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,”
“hope,”
“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, those relating to the terms, timing and closings of the
proposed mergers with Ouachita Bancshares Corp. and Central Community Corporation,
the Company’s ability to satisfy the requirements of the consent order issued by the FDIC and the Mississippi Department of Banking and Consumer Finance (“Mississippi
Banking Department”), 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 findings and results of the joint investigation by the Consumer Financial Protection Bureau (the “CFPB”) and the United States Department of
Justice (“DOJ”) of the Company’s fair lending practices, the
acceptance by customers of Ouachita Bancshares Corp. and Central Community Corporation of the Company’s products and services if the proposed mergers close, the outcome of any instituted,
pending or threatened material litigation, amortization expense for intangible
assets, goodwill impairments, loan impairment, utilization of appraisals and inspections for real estate loans, maturity, renewal or extension of construction, acquisition and
development loans, net interest revenue, fair value determinations, the amount of
the Company’s non-performing loans and leases, additions to OREO, credit quality, credit losses, liquidity, off-balance sheet commitments and arrangements, valuation of
mortgage servicing rights, allowance and provision for credit losses, continued
weakness in the economic environment, early identification and resolution of credit issues, utilization of non-GAAP financial measures, the ability of the Company to collect all
amounts due according to the contractual terms of loan agreements, the
Company’s reserve for losses from representation and warranty obligations, the Company’s foreclosure process related to mortgage loans, the resolution of non-performing loans that are
collaterally dependent, real estate values, fully-indexed interest rates,
interest rate risk, interest rate sensitivity, calculation of economic value of equity, impaired loan charge-offs, troubled debt restructurings, diversification of the Company’s revenue stream,
liquidity
needs
and
strategies,
sources
of
funding,
net
interest
margin,
declaration and payment of dividends, cost saving initiatives, improvement in the
Company’s efficiencies, operating expense trends, future acquisitions and consideration to be used therefor,
the impact of litigation regarding debit card fees and the impact of certain claims
and ongoing, pending or threatened litigation, administrative and investigatory matters.
The Company cautions readers 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
as
a
result
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 Company’s ability to comply with the consent order issued by the FDIC and the Mississippi Banking Department, the findings and results of
the
CFPB
and
the
DOJ
in
their
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 of these proposed mergers, the impact
of any ongoing, pending or threatened litigation, administrative and investigatory matters involving the Company, 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 OREO, limitations on the Company’s ability to declare and pay
dividends, 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
and
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
the
loss
of
any
key
Company
personnel,
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 and this presentation and the accompanying slides, reports and other filings with the
SEC.
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
that
occur
after
the date of this this presentation and the accompanying slides.
|
 Q4
Highlights As of and for the three months ended December 31, 2014
Net income of $28.7 million, or $0.30 per diluted share
Earnings adversely impacted by negative mortgage servicing rights (“MSR”)
valuation adjustment of $3.4 million
Generated net loan growth of $202.4 million, or 8.4% annualized
Net interest margin remained stable at 3.60%
Announced authorization of stock repurchase program
3 |
 Recent
Quarterly Results Dollars in millions, except per share data
NM
–
Not
Meaningful
4
12/31/14
9/30/14
12/31/13
vs 9/30/14
Net interest revenue
106.4
$
105.6
$
102.4
$
0.8
%
3.9
%
Provision for credit losses
0.0
0.0
0.0
NM
NM
Noninterest revenue
63.5
69.3
65.1
(8.3)
(2.5)
Noninterest expense
130.0
133.7
127.8
(2.7)
1.7
Income before income taxes
39.9
41.2
39.7
(3.1)
0.5
Income tax provision
11.3
12.4
12.0
(9.4)
(6.3)
Net income
28.7
$
28.8
$
27.7
$
(0.4)
%
3.5
%
Net income per share: diluted
0.30
$
0.30
$
0.29
$
0.0
%
3.4
%
Three Months Ended
% Change
vs 12/31/13 |
 Noninterest Revenue
Dollars in thousands
5
12/31/14
9/30/14
12/31/13
vs 9/30/14
Mortgage lending revenue
3,250
$
6,938
$
9,605
$
(53.2)
%
(66.2)
%
Credit card, debit card and merchant fees
9,921
8,972
8,324
10.6
19.2
Deposit service charges
12,538
13,111
13,570
(4.4)
(7.6)
Insurance commissions
25,376
29,246
21,397
(13.2)
18.6
Wealth management
5,826
5,961
5,320
(2.3)
9.5
Other
6,602
5,050
6,909
30.7
(4.4)
Total noninterest revenue
63,513
$
69,278
$
65,125
$
(8.3)
%
(2.5)
%
% of total revenue
37.4%
39.6%
38.9%
Three Months Ended
% Change
vs 12/31/13 |
 Noninterest Expense
Dollars in thousands
NM –
Not Meaningful
6
12/31/14
9/30/14
12/31/13
vs 9/30/14
Salaries and employee benefits
76,751
$
77,453
$
75,466
$
(0.9)
%
1.7
%
Occupancy, net of rental income
10,500
10,313
9,935
1.8
5.7
Equipment
3,996
4,205
4,298
(5.0)
(7.0)
Deposit insurance assessments
2,430
2,125
2,687
14.4
(9.6)
Write-off and amortization of bond issue cost
12
12
12
-
-
Advertising & public relations
2,003
2,142
2,408
(6.5)
(16.8)
Foreclosed property expense
4,593
5,721
2,831
(19.7)
62.2
Data processing, telecom & computer software
7,529
7,476
7,107
0.7
5.9
Amortization of intangibles
1,111
1,126
819
(1.3)
35.7
Legal
2,322
2,620
2,537
(11.4)
(8.5)
Merger expense
4
188
-
(97.9)
NM
Postage and shipping
1,239
1,103
1,133
12.3
9.4
Other miscellaneous expense
17,556
19,215
18,597
(8.6)
(5.6)
Total noninterest expense
130,046
$
133,699
$
127,830
$
(2.7)
%
1.7
%
Non-operating items:
Merger expense
4
$
188
$
-
$
BSA-AML charge
-
3,069
-
Total
4
$
3,257
$
-
$
Three Months Ended
% Change
vs 12/31/13 |
 Loan
Portfolio Dollars in millions
Net loans and leases
7
As of
12/31/14
9/30/14
12/31/13
Commercial and industrial
1,746
$
1,714
$
1,529
$
7.5
%
14.2
%
Real estate:
Consumer mortgages
2,258
2,191
1,976
12.0
14.3
Home equity
531
518
494
10.0
7.5
Agricultural
240
242
235
(3.9)
2.1
Commercial and industrial-owner occupied
1,523
1,509
1,473
3.6
3.3
Construction, acquisition and development
854
820
741
16.5
15.1
Commercial
1,962
1,917
1,846
9.4
6.3
Credit Cards
113
109
111
14.4
1.9
Other
486
491
552
(3.6)
(11.9)
Total
9,713
$
9,511
$
8,958
$
8.4
%
8.4
%
vs 12/31/13
% Change
vs 9/30/14
Annualized |
 Mortgage and Insurance Revenue
Dollars in thousands
8
Mortgage Lending Revenue
12/31/14
9/30/14
6/30/14
3/31/14
12/31/13
Origination revenue
3,949
$
3,736
$
8,758
$
1,964
$
3,590
$
Servicing revenue
4,215
4,113
4,058
4,115
4,361
MSR payoffs/paydowns
(1,480)
(1,559)
(1,616)
(1,138)
(1,240)
MSR valuation adjustment
(3,434)
648
(2,111)
(1,547)
2,894
Total mortgage lending revenue
3,250
$
6,938
$
9,089
$
3,394
$
9,605
$
Production volume
256,308
$
305,730
$
291,010
$
197,110
$
222,282
$
Purchase money production
193,154
$
244,584
$
241,538
$
143,890
$
160,043
$
Mortgage loans sold
229,070
$
225,444
$
264,478
$
143,213
$
200,665
$
Margin on loans sold
1.72%
1.66%
3.31%
1.37%
1.79%
Insurance Commission Revenue
Property and casualty commissions
19,007
$
22,746
$
21,576
$
19,987
$
15,588
$
Life and health commissions
5,521
5,128
5,549
5,010
4,525
Risk management income
621
708
617
705
648
Other
227
664
879
5,897
636
Total insurance commissions
25,376
$
29,246
$
28,621
$
31,599
$
21,397
$
Three Months Ended |
 NPLs
increased $2.8 million, or 4.1%, and NPAs declined $5.9 million, or 5.3%,
quarter over quarter OREO decreased $8.7 million, or 20.4%, quarter over
quarter Near-term delinquencies remained stable at $25.8 million
No provision for credit losses recorded, which is consistent with no
recorded provision for both the third quarter of 2014 and the fourth
quarter of 2013
Net charge-offs were $1.5 million for the fourth quarter compared with
$3.2 million for the third quarter of 2014 and $0.7 million for the fourth
quarter of 2013
52% of non-accrual loans were paying as agreed
Credit Quality Highlights
9
As of and for the three months ended December 31, 2014
“Paying as agreed” includes loans that are less than 30 days past due with payments occurring
at least quarterly |
 NPA
Improvement Total NPAs Have Declined Approximately 45% in the Last 12
Months 10
Dollars
in
millions
NPLs
consist
of
nonaccrual
loans,
loans
90+
days
past
due
and
restructured
loans
NPAs
consist
of
NPLs
and
other
real
estate
owned |
 Summary
Non-Financial Highlights
Progress toward remediating BSA/AML compliance weaknesses
Authorization of a stock repurchase program
Opened loan production office in Austin, TX
Financial Highlights
Meaningful net loan growth
Stable net interest margin
Adverse impact of negative MSR valuation adjustment
Continued resolution of remaining problem assets
Q&A
11 |