Exhibit 99.1

News Release

 

 

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

BancorpSouth Announces Fourth Quarter 2015 Financial Results

TUPELO, MS, January 25, 2016/PRNewswire — BancorpSouth, Inc. (NYSE: BXS) today announced financial results for the quarter and year ended December 31, 2015.

Highlights for the fourth quarter of 2015 included:

 

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Net income of $21.2 million or $0.22 per diluted share.

 

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Net operating income of $31.4 million or $0.33 per diluted share.

 

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Generated net loan growth of $153.2 million, or 5.9 percent on an annualized basis and deposit growth of $189.2 million, or 6.7 percent on an annualized basis.

 

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Net interest margin remained stable at 3.58 percent.

 

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Continued stable credit quality resulted in no recorded provision for credit losses for the quarter.

 

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Other real estate owned (“OREO”) declined $8.9 million, or 37.7 percent, as a result of the disposition of several large parcels of property. Related foreclosed property expense was elevated at $3.0 million.

 

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Incurred a charge in the fourth quarter of 2015 of $16.5 million related to the settlement of the 2010 class action lawsuit for $24 million related to overdraft fees.

The Company reported net income of $21.2 million, or $0.22 per diluted share, for the fourth quarter of 2015 compared with net income of $28.7 million, or $0.30 per diluted share, for the fourth quarter of 2014 and net income of $34.3 million, or $0.36 per diluted share, for the third quarter of 2015. Additionally, the Company reported net income of $127.5 million, or $1.33 per diluted share, for the year ended December 31, 2015 compared to $116.8 million, or $1.21 per diluted share, for the year ended December 31, 2014.

 

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

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BXS Announces Fourth Quarter Results

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January 25, 2016

 

The Company reported net operating income of $31.4 million, or $0.33 per diluted share, for the fourth quarter of 2015 compared to $28.7 million, or $0.30 per diluted share, for the fourth quarter of 2014 and $34.3 million, or $0.36 per diluted share, for the third quarter of 2015.

“Our fourth quarter results were impacted by elevated non-interest expense, particularly related to the legal settlement,” remarked Dan Rollins, BancorpSouth Chairman and Chief Executive Officer. “While this settlement has an adverse impact on current quarter earnings, we believe it was in the best interest of our shareholders to put this case behind us and move forward. We also had the opportunity to dispose of several large parcels of foreclosed property, including our largest individual property, resulting in an $8.9 million decline in total OREO. Despite elevated legal and foreclosed property expense, we continue to be pleased with our core fundamental performance. We reported nice loan and deposit growth for the quarter. Additionally, both our net interest margin and our credit quality indicators remained stable. Finally, we continue to challenge expenses as many of our other core expense line items were either flat or down for the quarter.

“Additionally, we have begun settlement discussions with the Consumer Financial Protection Bureau and the U.S. Department of Justice regarding their joint investigation of our fair lending practices. While it is too early to speculate on the potential timing or outcome of these discussions, we are pleased that these agencies have opened this dialogue with us and we are working toward a resolution. However, if we are able to reach a settlement of this investigation, there is no guarantee that the terms would permit our pending mergers to move forward.” The Company is currently unable to estimate any potential liability that may result from this matter. Prior to the filing of the Annual Report on Form 10-K for 2015, should a settlement be reached that results in a liability, the financial information in this release could be revised.

Net Interest Revenue

Net interest revenue was $111.2 million for the fourth quarter of 2015, an increase of 4.5 percent from $106.4 million for the fourth quarter of 2014 and an increase of 0.1 percent from $111.1 million for the third quarter of 2015. The fully taxable equivalent net interest margin was 3.58 percent for the fourth quarter of 2015 compared to 3.60 percent for the fourth quarter of 2014 and 3.59 percent for the third quarter of 2015. Yields on loans and leases were 4.15 percent for the fourth quarter of 2015 compared with 4.30 percent for the fourth quarter of 2014 and 4.22 percent for the third quarter of 2015, while yields on total interest earning assets were 3.79 percent for the fourth quarter of 2015 compared with 3.85 percent for the fourth quarter of 2014 and 3.82 percent for the third quarter of 2015. The average cost of deposits was 0.21 percent for the fourth quarter of 2015 compared to 0.25 percent for the fourth quarter of 2014 and 0.22 percent for the third quarter of 2015.

Asset, Deposit and Loan Activity

Total assets were $13.8 billion at December 31, 2015 compared with $13.3 billion at December 31, 2014. Loans and leases, net of unearned income, were $10.4 billion at December 31, 2015 compared with $9.7 billion at December 31, 2014.

 

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BXS Announces Fourth Quarter Results

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Total deposits were $11.3 billion at December 31, 2015 compared with $11.0 billion at December 31, 2014. A decrease in time deposits of $140.1 million, or 7.0 percent, at December 31, 2015 compared to December 31, 2014 was more than offset by growth in other lower cost deposits. Noninterest bearing demand deposits increased $252.8 million, or 9.1 percent, over the same period. Additionally, savings deposits increased $110.4 million, or 8.3 percent, while interest bearing demand deposits increased $135.8 million, or 2.8 percent, over the same period.

Provision for Credit Losses and Allowance for Credit Losses

Earnings for the quarter reflect no recorded provision for credit losses, compared to no recorded provision for the fourth quarter of 2014 and a negative provision of $3.0 million for the third quarter of 2015. Total non-performing assets (“NPAs”) were $109.7 million, or 1.06 percent of net loans and leases, at December 31, 2015 compared with $105.7 million, or 1.09 percent of net loans and leases, at December 31, 2014, and $113.9 million, or 1.11 percent of net loans and leases, at September 30, 2015.

Net charge-offs for the fourth quarter of 2015 were $6.6 million, compared with net charge-offs of $1.5 million for the fourth quarter of 2014 and net charge-offs of $2.3 million for the third quarter of 2015. Gross charge-offs were $9.5 million for the fourth quarter of 2015, compared with $4.9 million for the fourth quarter of 2014 and $7.4 million for the third quarter of 2015. Gross recoveries of previously charged-off loans were $3.0 million for the fourth quarter of 2015, compared with $3.3 million for the fourth quarter of 2014 and $5.1 million for the third quarter of 2015. Annualized net charge-offs were 0.25 percent of average loans and leases for the fourth quarter of 2015, compared with annualized net charge-offs of 0.06 percent for the fourth quarter of 2014 and annualized net charge-offs of 0.09 percent for the third quarter of 2015.

Non-performing loans (“NPLs”) were $95.0 million, or 0.92 percent of net loans and leases, at December 31, 2015, compared with $71.7 million, or 0.74 percent of net loans and leases, at December 31, 2014, and $90.3 million, or 0.88 percent of net loans and leases, at September 30, 2015. The allowance for credit losses was $126.5 million, or 1.22 percent of net loans and leases, at December 31, 2015 compared with $142.4 million, or 1.47 percent of net loans and leases, at December 31, 2014 and $133.0 million, or 1.30 percent of net loans and leases, at September 30, 2015.

NPLs at December 31, 2015 consisted primarily of $83.0 million of nonaccrual loans, compared with $70.2 million of nonaccrual loans at September 30, 2015. NPLs at December 31, 2015 also included $2.0 million of loans 90 days or more past due and still accruing, compared with $1.4 million of such loans at September 30, 2015, and included restructured loans still accruing of $9.9 million at December 31, 2015, compared with $18.6 million of such loans at September 30, 2015. Early stage past due loans, representing loans 30-89 days past due, totaled $24.6 million at December 31, 2015 compared to $25.6 million at September 30, 2015.

OREO decreased $8.9 million to $14.8 million during the fourth quarter of 2015 from $23.7 million at September 30, 2015. This net decrease reflected $1.6 million of OREO added through foreclosure, offset by sales of OREO of $8.2 million. Write-downs in the value of existing

 

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BXS Announces Fourth Quarter Results

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properties were $2.3 million for the fourth quarter of 2015 compared to $0.5 million for the third quarter of 2015. Sales of OREO during the fourth quarter of 2015 resulted in a net loss of $0.5 million compared to a net gain of $0.2 million for the third quarter of 2015. At December 31, 2015, OREO was carried at 39.3 percent of the aggregate loan balances at the time of foreclosure, compared with 42.8 percent at September 30, 2015.

Noninterest Revenue

Noninterest revenue was $67.4 million for the fourth quarter of 2015, compared with $63.5 million for the fourth quarter of 2014 and $63.0 million for the third quarter of 2015. These results included a positive MSR valuation adjustment of $2.9 million for the fourth quarter of 2015 compared with a negative MSR valuation adjustment of $3.4 million for the fourth quarter of 2014 and a negative MSR valuation adjustment of $5.3 million for the third quarter of 2015. Valuation adjustments in the MSR asset are driven primarily by fluctuations in interest rates period over period.

Excluding the MSR valuation adjustments, net mortgage lending revenue was $7.7 million for the fourth quarter of 2015, compared with $6.7 million for the fourth quarter of 2014 and $7.6 million for the third quarter of 2015. Mortgage origination volume for the fourth quarter of 2015 was $310.0 million, compared with $256.3 million for the fourth quarter of 2014 and $402.2 million for the third quarter of 2015.

Credit and debit card fee revenue was $9.4 million for the fourth quarter of 2015, compared with $9.9 million for the fourth quarter of 2014 and $9.3 million for the third quarter of 2015. Deposit service charge revenue was $11.8 million for the fourth quarter of 2015, compared with $12.5 million for the fourth quarter of 2014 and $12.2 million for the third quarter of 2015. Insurance commission revenue was $25.3 million for the fourth quarter of 2015, compared with $25.4 million for the fourth quarter of 2014 and $28.6 million for the third quarter of 2015. Wealth management revenue was $5.4 million for the fourth quarter of 2015, compared with $5.9 million for the fourth quarter of 2014 and $5.6 million for the third quarter of 2015.

Noninterest Expense

Noninterest expense for the fourth quarter of 2015 was $148.4 million, compared with $130.0 million for the fourth quarter of 2014 and $126.5 million for the third quarter of 2015. Non-interest expense for the fourth quarter of 2015 included the $16.5 million legal charge related to the settlement of the class action lawsuit related to overdraft fees. The settlement plus estimated administrative fees totaled $24.5 million, $8.0 million of which was accrued in prior years. Salaries and employee benefits expense was $80.2 million for the fourth quarter of 2015 compared to $76.8 million for the fourth quarter of 2014 and $81.4 million for the third quarter of 2015. Foreclosed property expense was $3.0 million for the fourth quarter of 2015 compared with $4.6 million for the fourth quarter of 2014 and $0.8 million for the third quarter of 2015. Deposit insurance assessments were $2.6 million for the fourth quarter of 2015 compared to $2.4 million for the fourth quarter of 2014 and $2.2 million for the third quarter of 2015.

 

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BXS Announces Fourth Quarter Results

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Capital Management

The Company’s equity capitalization is comprised entirely of common stock. BancorpSouth’s ratio of shareholders’ equity to assets was 12.00 percent at December 31, 2015, compared with 12.05 percent at December 31, 2014 and 11.93 percent at September 30, 2015. The ratio of tangible shareholders’ equity to tangible assets was 9.96 percent at December 31, 2015, compared with 9.92 percent at December 31, 2014 and 9.88 percent at September 30, 2015.

Estimated regulatory capital ratios at December 31, 2015 were calculated in accordance with the Basel III capital framework. BancorpSouth is a “well capitalized” financial holding company, as defined by federal regulations, with Tier 1 risk-based capital of 12.31 percent at December 31, 2015 and total risk based capital of 13.40 percent, compared with required minimum levels of 8 percent and 10 percent, respectively, for “well capitalized” classification.

Transactions

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 11 full-service banking offices along the I-20 corridor and has a loan production office in Madison, Mississippi. As of December 31, 2015, OIB, on a consolidated basis, reported total assets of $652.9 million, total loans of $463.8 million and total deposits of $562.0 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 merger has been unanimously approved by the Board of Directors of each company and was approved by OIB shareholders on April 8, 2014. On February 25, 2015, the Company re-filed the merger application for the merger with Ouachita Bancshares Corp. with the appropriate regulatory agencies. On June 30, 2015, the Company announced the merger agreement was extended through December 31, 2015 to allow for additional time to obtain the necessary regulatory approvals and to satisfy all closing conditions. Although the merger agreement has not been extended beyond December 31, 2015, the amended agreement remains in effect until terminated by the Board of Directors of the Company or OIB. The terms of the amended agreement provide for a minimum total deal value of $111.1 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 transaction is expected to close shortly after receiving all required regulatory approvals, although 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 December 31, 2015, Central Community Corporation, on a consolidated

 

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BXS Announces Fourth Quarter Results

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basis, reported total assets of $1.4 billion, total loans of $615.0 million and total deposits of $1.2 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 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. On February 25, 2015, the Company re-filed the merger application for the merger with Central Community Corporation with the appropriate regulatory agencies. On June 30, 2015, the Company announced the merger agreement was extended through December 31, 2015 to allow for additional time to obtain the necessary regulatory approvals and to satisfy all closing conditions. Although the merger agreement has not been extended beyond December 31, 2015, the amended agreement remains in effect until terminated by the Board of Directors of the Company or Central Community Corporation. The terms of the amended agreement provide for a minimum total deal value of $202.5 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 transaction is expected to close shortly after receiving all required regulatory approvals, although the Company can provide no assurance that the merger will close timely or at all.

For additional information regarding the status of the merger with Ouachita Bancshares Corp. and the status of the merger with Central Community Corporation, please refer to the Current Report on Form 8-K that was previously filed with the Securities and Exchange Commission (the “SEC”) on July 24, 2014, Part II, Item 5 of the Quarterly Report on Form 10-Q that was previously filed with the SEC on August 6, 2014, the Current Report on Form 8-K that was previously filed with the SEC on September 4, 2014, the Annual Report on Form 10-K that was previously filed with the SEC on February 24, 2015, and the Current Report on Form 8-K that was previously filed with the SEC on July 1, 2015.

Summary

Rollins concluded, “I am proud of our team’s continued progress as we all work together to improve our financial and operating performance. During 2015, our constant focus on expense control allowed us to keep total non-interest expense essentially flat for the year, excluding the impact of the class action settlement. We grew net loans and leases by 6.8 percent and total deposits by 3.3 percent while maintaining a stable net interest margin. Credit quality improved as well, as evidenced by our improvement in classified asset levels, low levels of net charge-offs, and negative provision for credit losses for the year. As we look forward to 2016, I’m confident our team of professionals will find a way to deliver on our goal of growing shareholder value.”

Conference Call

BancorpSouth will conduct a conference call to discuss its fourth quarter 2015 results on January 26, 2016, 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.

 

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About BancorpSouth, Inc.

BancorpSouth, Inc. is a financial holding company headquartered in Tupelo, Mississippi, with $13.8 billion in assets. BancorpSouth Bank, a wholly-owned subsidiary of BancorpSouth, Inc., operates 241 full service branch locations as well additional mortgage, insurance, and loan production offices 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,” “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 operate its regulatory compliance programs consistent with federal, state and local laws, including its BSA/AML compliance program, the terms, timing and outcome of the settlement discussions in connection with 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, 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 news release, 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 Company’s ability to operate its regulatory compliance programs consistent with federal, state and local laws, including its BSA/AML compliance program, when and whether the joint investigation by the CFPB and the DOJ of the Company’s fair lending practices is resolved by settlement and, if so, on what terms, 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 news releases, 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 news release.

 

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BXS Announces Fourth Quarter Results

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January 25, 2016

 

BancorpSouth, Inc.

Selected Financial Information

(Dollars in thousands, except per share data)

(Unaudited)

 

		Quarter Ended				Quarter Ended				Quarter Ended				Quarter Ended				Quarter Ended
		12/31/2015				9/30/2015				6/30/2015				3/31/2015				12/31/2014
Earnings Summary:
Interest revenue		$	118,050			$	118,201			$	114,630			$	113,497			$	114,237
Interest expense			6,820				7,131				7,321				7,424				7,792
Net interest revenue			111,230				111,070				107,309				106,073				106,445
Provision for credit losses			—				(3,000	)			(5,000	)			(5,000	)			—
Net interest revenue, after provision for credit losses			111,230				114,070				112,309				111,073				106,445
Noninterest revenue			67,386				62,953				74,314				73,315				63,513
Noninterest expense			148,351				126,450				128,177				136,933				130,046
Income before income taxes			30,265				50,573				58,446				47,455				39,912
Income tax expense			9,096				16,230				18,733				15,189				11,252
Net income		$	21,169			$	34,343			$	39,713			$	32,266			$	28,660
Balance Sheet - Period End Balances
Total assets		$	13,798,662			$	13,787,424			$	13,634,931			$	13,630,322			$	13,326,369
Total earning assets			12,656,791				12,663,944				12,492,532				12,468,322				12,163,897
Total securities			2,082,329				2,161,125				2,251,153				2,194,373				2,156,927
Loans and leases, net of unearned income			10,372,778				10,219,576				10,007,571				9,726,970				9,712,936
Allowance for credit losses			126,458				133,009				138,312				136,660				142,443
Total deposits			11,331,161				11,141,946				11,134,961				11,252,654				10,972,339
Long-term debt			69,775				71,868				73,962				76,055				78,148
Total shareholders’ equity			1,655,444				1,644,820				1,680,196				1,645,208				1,606,059
Balance Sheet - Average Balances
Total assets		$	13,724,595			$	13,632,581			$	13,516,546			$	13,457,668			$	13,131,130
Total earning assets			12,628,685				12,548,967				12,443,960				12,398,058				12,038,265
Total securities			2,110,195				2,207,935				2,211,931				2,190,989				2,180,000
Loans and leases, net of unearned income			10,321,299				10,110,995				9,868,318				9,670,987				9,579,059
Total deposits			11,182,750				11,140,542				11,148,246				11,126,210				10,802,194
Long-term debt			69,775				71,868				73,962				76,078				79,387
Total shareholders’ equity			1,650,924				1,680,123				1,659,991				1,624,496				1,613,239
Nonperforming Assets:
Non-accrual loans and leases		$	83,028			$	70,237			$	67,766			$	54,418			$	58,052
Loans and leases 90+ days past due, still accruing			2,013				1,436				1,568				1,615				2,763
Restructured loans and leases, still accruing			9,876				18,578				10,109				5,433				10,920
Non-performing loans (NPLs)			94,917				90,251				79,443				61,466				71,735
Other real estate owned			14,759				23,696				24,299				27,889				33,984
Non-performing assets (NPAs)		$	109,676			$	113,947			$	103,742			$	89,355			$	105,719
Financial Ratios and Other Data:
Return on average assets			0.61	%			1.00	%			1.18	%			0.97	%			0.87	%
Return on average shareholders’ equity			5.09	%			8.11	%			9.60	%			8.06	%			7.05	%
Return on tangible equity			6.25	%			10.23	%			11.66	%			9.84	%			8.81	%
Pre-tax pre-provision return on average assets			0.87	%			1.38	%			1.59	%			1.29	%			1.21	%
Noninterest income to average assets			1.95	%			1.83	%			2.21	%			2.21	%			1.92	%
Noninterest expense to average assets			4.29	%			3.68	%			3.80	%			4.13	%			3.93	%
Net interest margin-fully taxable equivalent			3.58	%			3.59	%			3.54	%			3.56	%			3.60	%
Net interest rate spread			3.48	%			3.49	%			3.44	%			3.46	%			3.49	%
Efficiency ratio (tax equivalent)			81.86	%			71.56	%			69.52	%			75.17	%			75.25	%
Loan/deposit ratio			91.54	%			91.72	%			89.88	%			86.44	%			88.52	%
Price to earnings mult (avg)			18.17				16.98				18.80				18.43				18.45
Market value to book value			136.46	%			135.80	%			148.34	%			136.26	%			134.91	%
Market value to book value (avg)			142.53	%			140.68	%			142.10	%			127.91	%			130.16	%
Market value to tangible book value			168.15	%			167.71	%			182.42	%			168.52	%			167.95	%
Market value to tangible book value (avg)			175.64	%			173.74	%			174.75	%			158.20	%			162.04	%
Headcount FTE			3,970				3,903				3,935				3,924				3,948

 

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BXS Announces Fourth Quarter Results

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January 25, 2016

 

BancorpSouth, Inc.

Selected Financial Information

(Dollars in thousands, except per share data)

(Unaudited)

 

		Quarter Ended				Quarter Ended				Quarter Ended				Quarter Ended				Quarter Ended
		12/31/2015				9/30/2015				6/30/2015				3/31/2015				12/31/2014
Credit Quality Ratios:
Net (recoveries) charge-offs to average loans and leases (annualized)			0.25	%			0.09	%			(0.27	%)			0.03	%			0.06	%
Provision for credit losses to average loans and leases (annualized)			0.00	%			(0.12	%)			(0.20	%)			(0.21	%)			0.00	%
Allowance for credit losses to net loans and leases			1.22	%			1.30	%			1.38	%			1.40	%			1.47	%
Allowance for credit losses to non-performing loans and leases			133.23	%			147.38	%			174.10	%			222.33	%			198.57	%
Allowance for credit losses to non-performing assets			115.30	%			116.73	%			133.32	%			152.94	%			134.74	%
Non-performing loans and leases to net loans and leases			0.92	%			0.88	%			0.79	%			0.63	%			0.74	%
Non-performing assets to net loans and leases			1.06	%			1.11	%			1.04	%			0.92	%			1.09	%
Equity Ratios:
Total shareholders’ equity to total assets			12.00	%			11.93	%			12.32	%			12.07	%			12.05	%
Tangible shareholders’ equity to tangible assets			9.96	%			9.88	%			10.26	%			9.99	%			9.92	%
Capital Adequacy:
Common Equity Tier 1 capital			12.11	%			12.08	%			12.60	%			12.60	%			N/A
Tier 1 capital			12.31	%			12.29	%			12.81	%			12.81	%			13.26	%
Total capital			13.40	%			13.45	%			14.04	%			14.07	%			14.52	%
Tier 1 leverage capital			10.61	%			10.56	%			10.96	%			10.71	%			10.55	%
Estimated for current quarter
Common Share Data:
Basic earnings per share		$	0.22			$	0.36			$	0.41			$	0.33			$	0.30
Diluted earnings per share			0.22				0.36				0.41				0.33				0.30
Cash dividends per share			0.10				0.10				0.08				0.08				0.08
Book value per share			17.58				17.50				17.37				17.04				16.69
Tangible book value per share			14.27				14.17				14.12				13.78				13.40
Market value per share (last)			23.99				23.77				25.76				23.22				22.51
Market value per share (high)			27.23				26.54				26.68				23.68				23.28
Market value per share (low)			22.44				22.09				22.83				19.64				19.22
Market value per share (avg)			25.06				24.62				24.68				21.80				21.72
Dividend payout ratio			44.46	%			28.01	%			18.25	%			22.40	%			25.17	%
Total shares outstanding			94,162,728				93,969,994				96,755,530				96,544,502				96,254,903
Average shares outstanding - basic			94,111,408				96,202,871				96,625,794				96,359,885				96,173,000
Average shares outstanding - diluted			94,384,443				96,467,728				96,957,441				96,653,401				96,506,827
Yield/Rate:
(Taxable equivalent basis)
Loans, loans held for sale, and leases net of unearned income			4.15	%			4.22	%			4.23	%			4.31	%			4.30	%
Available-for-sale securities:
Taxable			1.48	%			1.40	%			1.40	%			1.54	%			1.43	%
Tax-exempt			5.32	%			5.32	%			5.44	%			5.40	%			5.30	%
Short-term investments			0.22	%			0.20	%			0.24	%			0.22	%			0.24	%
Total interest earning assets and revenue			3.79	%			3.82	%			3.78	%			3.80	%			3.85	%
Deposits			0.21	%			0.22	%			0.23	%			0.24	%			0.25	%
Demand - interest bearing			0.18	%			0.18	%			0.19	%			0.18	%			0.18	%
Savings			0.12	%			0.12	%			0.12	%			0.12	%			0.12	%
Other time			0.71	%			0.76	%			0.79	%			0.82	%			0.87	%
Short-term borrowings			0.12	%			0.12	%			0.11	%			0.12	%			0.11	%
Total int bearing dep & s/t borrowings			0.28	%			0.30	%			0.31	%			0.31	%			0.33	%
Junior subordinated debt			2.93	%			2.87	%			2.86	%			2.84	%			2.82	%
Long-term debt			2.95	%			2.91	%			2.90	%			2.88	%			2.86	%
Total interest bearing liabilities and expense			0.31	%			0.32	%			0.34	%			0.34	%			0.36	%
Interest bearing liabilities to interest earning assets			69.23	%			69.68	%			70.36	%			71.13	%			70.57	%
Net interest tax equivalent adjustment		$	2,601			$	2,558			$	2,628			$	2,653			$	2,736

 

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BXS Announces Fourth Quarter Results

Page 10

January 25, 2016

 

BancorpSouth, Inc.

Consolidated Balance Sheets

(Unaudited)

 

		Dec-15				Sep-15				Jun-15				Mar-15				Dec-14
		(Dollars in thousands)
Assets
Cash and due from banks		$	154,192			$	159,923			$	183,541			$	199,337			$	204,231
Interest bearing deposits with other banks			43,777				113,068				34,438				360,469				153,019
Available-for-sale securities, at fair value			2,082,329				2,161,125				2,251,153				2,194,373				2,156,927
Loans and leases			10,404,326				10,254,013				10,041,455				9,761,555				9,749,540
Less: Unearned income			31,548				34,437				33,884				34,585				36,604
Allowance for credit losses			126,458				133,009				138,312				136,660				142,443
Net loans and leases			10,246,320				10,086,567				9,869,259				9,590,310				9,570,493
Loans held for sale			157,907				170,175				199,370				186,510				141,015
Premises and equipment, net			308,125				304,317				303,837				305,335				304,943
Accrued interest receivable			40,901				41,599				41,065				42,933				41,985
Goodwill			291,498				291,498				291,498				291,498				291,498
Other identifiable intangibles			20,545				21,466				22,415				23,476				24,508
Bank owned life insurance			251,534				249,825				247,983				246,148				247,076
Other real estate owned			14,759				23,696				24,299				27,889				33,984
Other assets			186,775				164,165				166,073				162,044				156,690
Total Assets		$	13,798,662			$	13,787,424			$	13,634,931			$	13,630,322			$	13,326,369
Liabilities
Deposits:
Demand: Noninterest bearing		$	3,031,528			$	3,053,439			$	2,911,972			$	2,914,949			$	2,778,686
Interest bearing			5,003,806				4,794,656				4,881,469				4,979,710				4,868,054
Savings			1,442,336				1,409,856				1,407,616				1,395,857				1,331,963
Other time			1,853,491				1,883,995				1,933,904				1,962,138				1,993,636
Total deposits			11,331,161				11,141,946				11,134,961				11,252,654				10,972,339
Federal funds purchased and securities sold under agreement to repurchase			405,937				425,203				375,980				384,829				388,166
Short-term Federal Home Loan Bank borrowings and other short-term borrowing			62,000				224,500				92,500				1,500				3,500
Accrued interest payable			3,071				3,353				3,494				3,371				3,400
Junior subordinated debt securities			23,198				23,198				23,198				23,198				23,198
Long-term debt			69,775				71,868				73,962				76,055				78,148
Other liabilities			248,076				252,536				250,640				243,507				251,559
Total Liabilities			12,143,218				12,142,604				11,954,735				11,985,114				11,720,310
Shareholders’ Equity
Common stock			235,407				234,925				241,889				241,361				240,637
Capital surplus			282,934				278,998				337,272				331,016				324,271
Accumulated other comprehensive loss			(41,825	)			(36,355	)			(41,288	)			(37,033	)			(43,686	)
Retained earnings			1,178,928				1,167,252				1,142,323				1,109,864				1,084,837
Total Shareholders’ Equity			1,655,444				1,644,820				1,680,196				1,645,208				1,606,059
Total Liabilities & Shareholders’ Equity		$	13,798,662			$	13,787,424			$	13,634,931			$	13,630,322			$	13,326,369

 

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BXS Announces Fourth Quarter Results

Page 11

January 25, 2016

 

BancorpSouth, Inc.

Consolidated Average Balance Sheets

(Unaudited)

 

		Dec-15				Sep-15				Jun-15				Mar-15				Dec-14
		(Dollars in thousands)
Assets
Cash and due from banks		$	159,696			$	159,569			$	152,792			$	132,734			$	166,941
Interest bearing deposits with other banks			69,552				72,438				212,634				426,792				165,713
Available-for-sale securities, at fair value			2,110,195				2,207,935				2,211,931				2,190,989				2,180,000
Loans and leases			10,353,913				10,144,874				9,903,034				9,706,941				9,615,125
Less: Unearned income			32,614				33,879				34,716				35,954				36,066
Allowance for credit losses			132,375				137,547				140,483				141,299				143,842
Net loans and leases			10,188,924				9,973,448				9,727,835				9,529,688				9,435,217
Loans held for sale			127,638				157,598				151,077				109,291				113,493
Premises and equipment, net			306,881				304,948				305,335				305,277				306,630
Accrued interest receivable			38,142				38,847				38,268				39,279				39,034
Goodwill			291,498				291,498				291,498				291,498				291,498
Other identifiable intangibles			20,880				21,812				22,780				23,834				24,910
Bank owned life insurance			250,577				248,798				246,872				246,538				245,584
Other real estate owned			21,049				24,008				27,190				32,062				39,209
Other assets			139,563				131,682				128,334				129,686				122,901
Total Assets		$	13,724,595			$	13,632,581			$	13,516,546			$	13,457,668			$	13,131,130
Liabilities
Deposits:
Demand: Noninterest bearing		$	3,106,947			$	2,992,903			$	2,895,451			$	2,807,816			$	2,837,919
Interest bearing			4,782,234				4,822,567				4,899,467				4,985,577				4,617,998
Savings			1,421,361				1,413,187				1,404,336				1,358,565				1,321,000
Other time			1,872,208				1,911,885				1,948,992				1,974,252				2,025,277
Total deposits			11,182,750				11,140,542				11,148,246				11,126,210				10,802,194
Federal funds purchased and securities sold under agreement to repurchase			466,865				439,503				399,447				398,237				426,842
Short-term Federal Home Loan Bank borrowings and other short-term borrowing			107,408				62,136				6,555				3,056				2,261
Accrued interest payable			3,340				3,600				3,457				3,338				3,630
Junior subordinated debt securities			23,198				23,198				23,198				23,198				23,198
Long-term debt			69,775				71,868				73,962				76,078				79,387
Other liabilities			220,335				211,611				201,690				203,055				180,379
Total Liabilities			12,073,671				11,952,458				11,856,555				11,833,172				11,517,891
Shareholders’ Equity
Common stock			235,227				240,473				241,540				240,992				240,436
Capital surplus			282,076				325,118				332,993				326,476				323,372
Accumulated other comprehensive loss			(38,618	)			(40,476	)			(38,534	)			(39,529	)			(22,747	)
Retained earnings			1,172,239				1,155,008				1,123,992				1,096,557				1,072,178
Total Shareholders’ Equity			1,650,924				1,680,123				1,659,991				1,624,496				1,613,239
Total Liabilities & Shareholders’ Equity		$	13,724,595			$	13,632,581			$	13,516,546			$	13,457,668			$	13,131,130

 

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BXS Announces Fourth Quarter Results

Page 12

January 25, 2016

 

BancorpSouth, Inc.

Consolidated Condensed Statements of Income

(Dollars in thousands, except per share data)

(Unaudited)

 

		Quarter Ended																				YTD
		Dec-15				Sep-15				Jun-15				Mar-15				Dec-14				Dec-15				Dec-14
INTEREST REVENUE:
Loans and leases		$	107,164			$	107,086			$	103,428			$	102,135			$	103,172			$	419,813			$	404,559
Deposits with other banks			40				36				126				236				101				438				532
Available-for-sale securities:
Taxable			6,550				6,490				6,424				6,844				6,429				26,308				27,755
Tax-exempt			3,137				3,226				3,335				3,377				3,471				13,075				14,462
Loans held for sale			1,159				1,363				1,317				905				1,064				4,744				2,949
Total interest revenue			118,050				118,201				114,630				113,497				114,237				464,378				450,257
INTEREST EXPENSE:
Interest bearing demand			2,166				2,209				2,262				2,183				2,070				8,820				7,851
Savings			434				431				426				412				411				1,703				1,614
Other time			3,356				3,646				3,827				4,008				4,453				14,837				20,675
Federal funds purchased and securities sold under agreement to repurchase			112				104				85				82				89				383				331
Long-term debt			581				571				556				577				603				2,285				2,463
Junior subordinated debt			171				168				165				163				165				667				659
Other			—				2				—				(1	)			1				1				2
Total interest expense			6,820				7,131				7,321				7,424				7,792				28,696				33,595
Net interest revenue			111,230				111,070				107,309				106,073				106,445				435,682				416,662
Provision for credit losses			—				(3,000	)			(5,000	)			(5,000	)			—				(13,000	)			—
Net interest revenue, after provision for credit losses			111,230				114,070				112,309				111,073				106,445				448,682				416,662
NONINTEREST REVENUE:
Mortgage lending			10,522				2,339				14,102				8,567				3,250				35,530				22,671
Credit card, debit card and merchant fees			9,414				9,282				9,298				8,539				9,921				36,533				35,303
Deposit service charges			11,836				12,150				11,527				11,252				12,538				46,765				50,622
Security gains, net			48				33				41				14				18				136				37
Insurance commissions			25,348				28,584				29,319				33,493				25,376				116,744				114,842
Wealth Management			5,375				5,567				5,508				6,210				5,925				22,660				23,940
Other			4,843				4,998				4,519				5,240				6,485				19,600				21,731
Total noninterest revenue			67,386				62,953				74,314				73,315				63,513				277,968				269,146
NONINTEREST EXPENSE:
Salaries and employee benefits			80,177				81,354				79,759				81,179				76,751				322,469				307,828
Occupancy, net of rental income			10,434				10,819				10,419				10,194				10,500				41,866				41,345
Equipment			3,569				3,742				4,024				3,974				3,996				15,309				16,869
Deposit insurance assessments			2,630				2,191				2,377				2,311				2,430				9,509				8,190
Other			51,541				28,344				31,598				39,275				36,369				150,758				144,174
Total noninterest expenses			148,351				126,450				128,177				136,933				130,046				539,911				518,406
Income before income taxes			30,265				50,573				58,446				47,455				39,912				186,739				167,402
Income tax expense			9,096				16,230				18,733				15,189				11,252				59,248				50,652
Net income		$	21,169			$	34,343			$	39,713			$	32,266			$	28,660			$	127,491			$	116,750
Net income per share: Basic		$	0.22			$	0.36			$	0.41			$	0.33			$	0.30			$	1.33			$	1.22
Diluted		$	0.22			$	0.36			$	0.41			$	0.33			$	0.30			$	1.33			$	1.21

 

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BXS Announces Fourth Quarter Results

Page 13

January 25, 2016

 

BancorpSouth, Inc.

Selected Loan Data

(Dollars in thousands)

(Unaudited)

 

		Quarter Ended
		Dec-15				Sep-15				Jun-15				Mar-15				Dec-14
LOAN AND LEASE PORTFOLIO:
Commercial and industrial		$	1,747,774			$	1,710,497			$	1,730,142			$	1,676,366			$	1,746,486
Real estate
Consumer mortgages			2,472,202				2,447,132				2,374,122				2,301,112				2,257,726
Home equity			589,752				573,566				558,460				538,042				531,374
Agricultural			259,360				252,381				239,884				236,898				239,616
Commercial and industrial-owner occupied			1,617,429				1,605,811				1,596,244				1,518,153				1,522,536
Construction, acquisition and development			945,045				900,875				860,407				892,730				853,623
Commercial real estate			2,188,048				2,141,398				2,081,394				1,993,473				1,961,977
Credit cards			112,165				109,576				110,552				106,287				113,426
All other			441,003				478,340				456,366				463,909				486,172
Total loans		$	10,372,778			$	10,219,576			$	10,007,571			$	9,726,970			$	9,712,936
ALLOWANCE FOR CREDIT LOSSES:
Balance, beginning of period		$	133,009			$	138,312			$	136,660			$	142,443			$	143,950
Loans and leases charged-off:
Commercial and industrial			(6,193	)			(2,010	)			(1,436	)			(383	)			(1,179	)
Real estate
Consumer mortgages			(1,146	)			(1,382	)			(575	)			(892	)			(900	)
Home equity			(147	)			(314	)			(245	)			(498	)			(93	)
Agricultural			(16	)			(9	)			—				(8	)			(4	)
Commercial and industrial-owner occupied			(357	)			(645	)			(404	)			(394	)			(220	)
Construction, acquisition and development			(221	)			(203	)			(272	)			(343	)			(566	)
Commercial real estate			(122	)			(1,477	)			(1,117	)			(1,007	)			(463	)
Credit cards			(723	)			(706	)			(527	)			(676	)			(580	)
All other			(623	)			(628	)			(441	)			(579	)			(847	)
Total loans charged-off			(9,548	)			(7,374	)			(5,017	)			(4,780	)			(4,852	)
Recoveries:
Commercial and industrial			354				897				282				502				298
Real estate
Consumer mortgages			596				461				1,024				612				821
Home equity			123				90				185				241				102
Agricultural			20				59				36				269				16
Commercial and industrial-owner occupied			307				1,831				146				550				216
Construction, acquisition and development			1,061				1,084				8,978				604				897
Commercial real estate			149				187				600				720				623
Credit cards			152				170				183				153				160
All other			235				292				235				346				212
Total recoveries			2,997				5,071				11,669				3,997				3,345
Net (charge-offs) recoveries			(6,551	)			(2,303	)			6,652				(783	)			(1,507	)
Provision charged to operating expense			—				(3,000	)			(5,000	)			(5,000	)			—
Balance, end of period		$	126,458			$	133,009			$	138,312			$	136,660			$	142,443
Average loans for period		$	10,321,299			$	10,110,995			$	9,868,318			$	9,670,987			$	9,579,059
Ratio:
Net (charge-offs) recoveries to average loans (annualized)			0.25	%			0.09	%			(0.27	%)			0.03	%			0.06	%

 

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BXS Announces Fourth Quarter Results

Page 14

January 25, 2016

 

BancorpSouth, Inc.

Selected Loan Data

(Dollars in thousands)

(Unaudited)

 

		Quarter Ended
		Dec-15				Sep-15				Jun-15				Mar-15				Dec-14
NON-PERFORMING ASSETS
NON-PERFORMING LOANS AND LEASES:
Nonaccrual Loans and Leases
Commercial and industrial		$	8,493			$	15,697			$	9,740			$	3,923			$	3,934
Real estate
Consumer mortgages			21,637				21,959				21,636				21,435				23,668
Home equity			4,021				3,664				3,550				2,269				2,253
Agricultural			921				484				259				259				291
Commercial and industrial-owner occupied			16,512				12,690				14,007				9,687				11,190
Construction, acquisition and development			9,130				4,240				5,411				5,111				4,162
Commercial real estate			21,741				10,730				12,397				11,107				11,915
Credit cards			188				215				157				118				133
All other			385				558				609				509				506
Total nonaccrual loans and leases		$	83,028			$	70,237			$	67,766			$	54,418			$	58,052
Loans and Leases 90+ Days Past Due, Still Accruing:
Commercial and industrial		$	60			$	58			$	20			$	30			$	41
Real estate
Consumer mortgages			1,655				1,068				1,022				1,256				1,828
Home equity			—				—				141				—				—
Agricultural			—				—				—				—				—
Commercial and industrial-owner occupied			—				—				14				—				39
Construction, acquisition and development			—				—				—				—				387
Commercial real estate			—				—				—				—				137
Credit cards			298				310				342				329				327
All other			—				—				29				—				4
Total loans and leases 90+ days past due, still accruing			2,013				1,436				1,568				1,615				2,763
Restructured Loans and Leases, Still Accruing			9,876				18,578				10,109				5,433				10,920
Total non-performing loans and leases			94,917				90,251				79,443				61,466				71,735
OTHER REAL ESTATE OWNED:			14,759				23,696				24,299				27,889				33,984
Total Non-performing Assets		$	109,676			$	113,947			$	103,742			$	89,355			$	105,719
Additions to Nonaccrual Loans and Leases During the Quarter		$	34,050			$	22,271			$	35,315			$	23,607			$	21,952
Loans and Leases 30-89 Days Past Due, Still Accruing:
Commercial and industrial		$	2,409			$	4,985			$	3,081			$	3,270			$	2,319
Real estate
Consumer mortgages			15,128				10,789				10,622				9,955				11,412
Home equity			2,456				1,455				2,527				2,594				2,047
Agricultural			303				393				116				161				366
Commercial and industrial-owner occupied			1,018				3,888				2,643				3,026				912
Construction, acquisition and development			1,070				1,218				1,120				5,471				4,811
Commercial real estate			830				798				1,651				3,032				1,510
Credit cards			677				788				529				581				739
All other			744				1,334				1,481				1,014				1,698
Total Loans and Leases 30-89 days past due, still accruing		$	24,635			$	25,648			$	23,770			$	29,104			$	25,814
Credit Quality Ratios:
Provision for credit losses to average loans and leases (annualized)			0.00	%			(0.12	%)			(0.20	%)			(0.21	%)			0.00	%
Allowance for credit losses to net loans and leases			1.22	%			1.30	%			1.38	%			1.40	%			1.47	%
Allowance for credit losses to non-performing loans and leases			133.23	%			147.38	%			174.10	%			222.33	%			198.57	%
Allowance for credit losses to non-performing assets			115.30	%			116.73	%			133.32	%			152.94	%			134.74	%
Non-performing loans and leases to net loans and leases			0.92	%			0.88	%			0.79	%			0.63	%			0.74	%
Non-performing assets to net loans and leases			1.06	%			1.11	%			1.04	%			0.92	%			1.09	%

 

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BXS Announces Fourth Quarter Results

Page 15

January 25, 2016

 

BancorpSouth, Inc.

Selected Loan Data

(Dollars in thousands)

(Unaudited)

 

		December 31, 2015
						Special
		Pass				Mention				Substandard				Doubtful				Loss				Impaired				Total
LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE:
Commercial and industrial		$	1,721,118			$	—			$	19,529			$	—			$	—			$	7,127			$	1,747,774
Real estate
Consumer mortgages			2,399,081				—				68,768				363				—				3,990				2,472,202
Home equity			577,539				—				10,418				—				—				1,795				589,752
Agricultural			250,579				—				7,909				—				—				872				259,360
Commercial and industrial-owner occupied			1,554,984				—				50,304				—				—				12,141				1,617,429
Construction, acquisition and development			920,372				—				17,090				—				—				7,583				945,045
Commercial real estate			2,124,448				—				45,658				161				—				17,781				2,188,048
Credit cards			112,165				—				—				—				—				—				112,165
All other			433,333				—				7,465				102				—				103				441,003
Total loans		$	10,093,619			$	—			$	227,141			$	626			$	—			$	51,392			$	10,372,778
		September 30, 2015
						Special
		Pass				Mention				Substandard				Doubtful				Loss				Impaired				Total
LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE:
Commercial and industrial		$	1,671,522			$	—			$	24,967			$	—			$	—			$	14,008			$	1,710,497
Real estate
Consumer mortgages			2,369,160				—				73,753				107				—				4,112				2,447,132
Home equity			563,119				—				8,645				—				—				1,802				573,566
Agricultural			243,814				—				8,235				—				—				332				252,381
Commercial and industrial-owner occupied			1,541,771				—				55,289				224				—				8,527				1,605,811
Construction, acquisition and development			870,595				—				27,243				430				—				2,607				900,875
Commercial real estate			2,072,229				—				59,514				410				—				9,245				2,141,398
Credit cards			109,576				—				—				—				—				—				109,576
All other			471,633				—				6,604				—				—				103				478,340
Total loans		$	9,913,419			$	—			$	264,250			$	1,171			$	—			$	40,736			$	10,219,576

 

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BXS Announces Fourth Quarter Results

Page 16

January 25, 2016

 

BancorpSouth, Inc.

Geographical Information

(Dollars in thousands)

(Unaudited)

 

		December 31, 2015
		Alabama and Florida Panhandle				Arkansas				Louisiana				Mississippi				Missouri				Tennessee				Texas				Other				Total
LOAN AND LEASE PORTFOLIO:
Commercial and industrial		$	160,361			$	199,347			$	202,755			$	618,901			$	79,928			$	116,514			$	237,102			$	132,866			$	1,747,774
Real estate
Consumer mortgages			296,698				330,780				219,334				818,423				71,915				273,980				443,852				17,220				2,472,202
Home equity			83,979				42,448				63,859				221,588				23,163				142,825				10,264				1,626				589,752
Agricultural			7,852				86,172				30,930				78,729				3,118				12,468				40,091				—				259,360
Commercial and industrial-owner occupied			181,017				194,152				181,567				677,686				47,937				132,156				202,914				—				1,617,429
Construction, acquisition and development			108,851				97,151				76,801				315,295				22,621				138,126				186,200				—				945,045
Commercial real estate			332,985				360,884				241,093				593,677				206,352				184,338				268,719				—				2,188,048
Credit cards			—				—				—				—				—				—				—				112,165				112,165
All other			72,347				48,554				30,130				165,509				3,081				41,062				56,900				23,420				441,003
Total loans		$	1,244,090			$	1,359,488			$	1,046,469			$	3,489,808			$	458,115			$	1,041,469			$	1,446,042			$	287,297			$	10,372,778
NON-PERFORMING LOANS AND LEASES:
Commercial and industrial		$	99			$	884			$	493			$	6,228			$	—			$	17			$	1,444			$	143			$	9,308
Real estate
Consumer mortgages			1,226				3,529				1,389				7,460				858				1,369				1,525				7,339				24,695
Home equity			783				1,291				519				885				—				560				—				2				4,040
Agricultural			—				—				—				932				—				26				—				—				958
Commercial and industrial-owner occupied			1,659				2,706				2,737				11,860				406				195				1,295				—				20,858
Construction, acquisition and development			53				636				199				6,783				1,570				1,418				65				—				10,724
Commercial real estate			3,718				1,181				2,459				12,193				428				2,234				172				—				22,385
Credit cards			—				—				—				—				—				—				—				1,291				1,291
All other			102				120				55				211				—				169				—				1				658
Total loans		$	7,640			$	10,347			$	7,851			$	46,552			$	3,262			$	5,988			$	4,501			$	8,776			$	94,917
NON-PERFORMING LOANS AND LEASES AS A PERCENTAGE OF OUTSTANDING:
Commercial and industrial			0.06	%			0.44	%			0.24	%			1.01	%			0.00	%			0.01	%			0.61	%			0.11	%			0.53	%
Real estate
Consumer mortgages			0.41	%			1.07	%			0.63	%			0.91	%			1.19	%			0.50	%			0.34	%			42.62	%			1.00	%
Home equity			0.93	%			3.04	%			0.81	%			0.40	%			0.00	%			0.39	%			0.00	%			0.12	%			0.69	%
Agricultural			0.00	%			0.00	%			0.00	%			1.18	%			0.00	%			0.21	%			0.00	%			N/A				0.37	%
Commercial and industrial-owner occupied			0.92	%			1.39	%			1.51	%			1.75	%			0.85	%			0.15	%			0.64	%			N/A				1.29	%
Construction, acquisition and development			0.05	%			0.65	%			0.26	%			2.15	%			6.94	%			1.03	%			0.03	%			N/A				1.13	%
Commercial real estate			1.12	%			0.33	%			1.02	%			2.05	%			0.21	%			1.21	%			0.06	%			N/A				1.02	%
Credit cards			N/A				N/A				N/A				N/A				N/A				N/A				N/A				1.15	%			1.15	%
All other			0.14	%			0.25	%			0.18	%			0.13	%			0.00	%			0.41	%			0.00	%			0.00	%			0.15	%
Total loans			0.61	%			0.76	%			0.75	%			1.33	%			0.71	%			0.57	%			0.31	%			3.05	%			0.92	%

 

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BXS Announces Fourth Quarter Results

Page 17

January 25, 2016

 

BancorpSouth, Inc.

Selected Additional Information

(Dollars in thousands)

(Unaudited)

 

		December 31, 2015
		Alabama and Florida Panhandle				Arkansas				Louisiana				Mississippi				Missouri				Tennessee				Texas				Other				Total
OTHER REAL ESTATE OWNED:
Commercial and industrial		$	84			$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	84
Real estate
Consumer mortgages			167				191				—				1,786				173				156				4				—				2,477
Home equity			—				—				—				101				—				—				—				—				101
Agricultural			—				—				—				25				—				—				—				—				25
Commercial and industrial-owner occupied			61				—				—				568				—				385				60				—				1,074
Construction, acquisition and development			2,305				168				130				6,033				—				1,576				—				—				10,212
Commercial real estate			170				108				—				210				127				—				63				—				678
All other			—				—				—				90				—				—				18				—				108
Total loans		$	2,787			$	467			$	130			$	8,813			$	300			$	2,117			$	145			$	—			$	14,759

 

		Quarter Ended
		Dec-15				Sep-15				Jun-15				Mar-15				Dec-14
OTHER REAL ESTATE OWNED:
Balance, beginning of period		$	23,696			$	24,299			$	27,889			$	33,984			$	42,691
Additions to foreclosed properties
New foreclosed property			1,555				1,333				1,730				2,804				2,257
Reductions in foreclosed properties
Sales			(8,227	)			(1,412	)			(4,284	)			(6,726	)			(8,548	)
Writedowns			(2,265	)			(524	)			(1,036	)			(2,173	)			(2,416	)
Balance, end of period		$	14,759			$	23,696			$	24,299			$	27,889			$	33,984
FORECLOSED PROPERTY EXPENSE
(Gain) Loss on sale of other real estate owned		$	483			$	(203	)		$	204			$	(779	)		$	1,643
Writedown of other real estate owned			2,265				524				1,036				2,173				2,416
Other foreclosed property expense			266				487				385				577				534
Total foreclosed property expense		$	3,014			$	808			$	1,625			$	1,971			$	4,593

 

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BXS Announces Fourth Quarter Results

Page 18

January 25, 2016

 

BancorpSouth, Inc.

Noninterest Revenue and Expense

(Dollars in thousands)

(Unaudited)

 

		Quarter Ended																				YTD
		Dec-15				Sep-15				Jun-15				Mar-15				Dec-14				Dec-15				Dec-14
NONINTEREST REVENUE:
Mortgage lending		$	10,522			$	2,339			$	14,102			$	8,567			$	3,250			$	35,530			$	22,671
Credit card, debit card and merchant fees			9,414				9,282				9,298				8,539				9,921				36,533				35,303
Deposit service charges			11,836				12,150				11,527				11,252				12,538				46,765				50,622
Securities gains, net			48				33				41				14				18				136				37
Insurance commissions			25,348				28,584				29,319				33,493				25,376				116,744				114,842
Trust income			3,469				3,653				3,543				4,036				3,791				14,701				14,520
Annuity fees			449				539				470				558				639				2,016				2,877
Brokerage commissions and fees			1,457				1,375				1,495				1,616				1,495				5,943				6,543
Bank-owned life insurance			1,881				1,842				1,835				1,899				3,249				7,457				8,848
Other miscellaneous income			2,962				3,156				2,684				3,341				3,236				12,143				12,883
Total noninterest revenue		$	67,386			$	62,953			$	74,314			$	73,315			$	63,513			$	277,968			$	269,146
NONINTEREST EXPENSE:
Salaries and employee benefits		$	80,177			$	81,354			$	79,759			$	81,179			$	76,751			$	322,469			$	307,828
Occupancy, net of rental income			10,434				10,819				10,419				10,194				10,500				41,866				41,345
Equipment			3,569				3,742				4,024				3,974				3,996				15,309				16,869
Deposit insurance assessments			2,630				2,191				2,377				2,311				2,430				9,509				8,190
Amortization of bond issue cost			12				12				12				12				12				48				48
Advertising			1,009				812				1,686				781				1,233				4,288				4,388
Foreclosed property expense			3,014				808				1,625				1,971				4,593				7,418				17,071
Telecommunications			1,807				1,825				1,897				1,922				1,960				7,451				8,720
Public relations			474				481				653				570				770				2,178				3,399
Data processing			5,608				5,598				5,324				5,393				4,804				21,923				20,736
Computer software			2,609				2,595				2,690				2,606				2,763				10,500				10,525
Amortization of intangibles			922				948				1,061				1,032				1,111				3,963				4,443
Legal			19,434				1,233				1,998				7,681				2,322				30,346				9,822
Merger expense			13				8				4				—				4				25				1,761
Postage and shipping			1,139				1,030				1,194				1,172				1,239				4,535				4,745
Other miscellaneous expense			15,500				12,994				13,454				16,135				15,558				58,083				58,516
Total noninterest expense		$	148,351			$	126,450			$	128,177			$	136,933			$	130,046			$	539,911			$	518,406
INSURANCE COMMISSIONS:
Property and casualty commissions		$	18,814			$	21,155			$	21,145			$	20,673			$	19,007			$	81,787			$	83,316
Life and health commissions			5,823				5,775				6,202				5,412				5,521				23,212				21,208
Risk management income			672				709				637				666				621				2,684				2,651
Other			39				945				1,335				6,742				227				9,061				7,667
Total insurance commissions		$	25,348			$	28,584			$	29,319			$	33,493			$	25,376			$	116,744			$	114,842

 

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BXS Announces Fourth Quarter Results

Page 19

January 25, 2016

 

BancorpSouth, Inc.

Selected Additional Information

(Dollars in thousands)

(Unaudited)

 

		Quarter Ended
		Dec-15				Sep-15				Jun-15				Mar-15				Dec-14
MORTGAGE SERVICING RIGHTS:
Fair value, beginning of period		$	52,973			$	55,924			$	49,190			$	51,296			$	53,759
Additions to mortgage servicing rights:
Originations of servicing assets			3,065				4,231				4,344				2,499				2,453
Changes in fair value:
Due to payoffs/paydowns			(1,633	)			(1,872	)			(1,930	)			(1,564	)			(1,480	)
Due to change in valuation inputs or assumptions used in the valuation model			2,865				(5,308	)			4,321				(3,039	)			(3,434	)
Other changes in fair value			(2	)			(2	)			(1	)			(2	)			(2	)
Fair value, end of period		$	57,268			$	52,973			$	55,924			$	49,190			$	51,296
Production revenue:
Origination		$	4,909			$	5,154			$	7,395			$	8,914			$	3,949
Servicing			4,381				4,365				4,316				4,256				4,215
Payoffs/Paydowns			(1,633	)			(1,872	)			(1,930	)			(1,564	)			(1,480	)
Total production revenue			7,657				7,647				9,781				11,606				6,684
Market value adjustment			2,865				(5,308	)			4,321				(3,039	)			(3,434	)
Total mortgage lending revenue		$	10,522			$	2,339			$	14,102			$	8,567			$	3,250
Mortgage loans serviced		$	6,011,236			$	5,942,736			$	5,802,407			$	5,705,638			$	5,686,756
MSR/mtg loans serviced			0.95	%			0.89	%			0.96	%			0.86	%			0.90	%
AVAILABLE-FOR-SALE SECURITIES, at fair value
U.S. Government agencies		$	1,244,640			$	1,255,717			$	1,336,846			$	1,286,981			$	1,215,054
Government agency issued residential mortgage-back securities			140,540				206,878				217,191				200,381				209,230
Government agency issued commercial mortgage-back securities			260,693				229,922				224,450				227,409				240,568
Obligations of states and political subdivisions			417,499				451,600				458,322				471,539				483,864
Other			18,957				17,008				14,344				8,063				8,211
Total available-for-sale securities		$	2,082,329			$	2,161,125			$	2,251,153			$	2,194,373			$	2,156,927

 

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BXS Announces Fourth Quarter Results

Page 20

January 25, 2016

 

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 pre-tax, pre-provision earnings, net operating income, 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) enables a more 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 to Net Income:

 

		Quarter ended
		12/31/2015				9/30/2015				6/30/2015				3/31/2015				12/31/2014
Net income		$	21,169			$	34,343			$	39,713			$	32,266			$	28,660
Plus: Provision for credit losses			—				(3,000	)			(5,000	)			(5,000	)			—
Income tax expense			9,096				16,230				18,733				15,189				11,252
Pre-tax, pre-provision earnings		$	30,265			$	47,573			$	53,446			$	42,455			$	39,912
Net income		$	21,169			$	34,343			$	39,713			$	32,266			$	28,660
Plus: Merger expense, net of tax			8				5				3				(1	)			2
Legal charge, net of tax			10,246				—				—				—				—
Net operating income		$	31,423			$	34,348			$	39,716			$	32,265			$	28,662

 

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BXS Announces Fourth Quarter Results

Page 21

January 25, 2016

 

BancorpSouth, Inc.

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
		12/31/2015				9/30/2015				6/30/2015				3/31/2015				12/31/2014
Tangible assets
Total assets		$	13,798,662			$	13,787,424			$	13,634,931			$	13,630,322			$	13,326,369
Less: Goodwill			291,498				291,498				291,498				291,498				291,498
Other identifiable intangible assets			20,545				21,466				22,415				23,476				24,508
Total tangible assets		$	13,486,619			$	13,474,460			$	13,321,018			$	13,315,348			$	13,010,363
Tangible shareholders’ equity
Total shareholders’ equity		$	1,655,444			$	1,644,820			$	1,680,196			$	1,645,208			$	1,606,059
Less: Goodwill			291,498				291,498				291,498				291,498				291,498
Other identifiable intangible assets			20,545				21,466				22,415				23,476				24,508
Total tangible shareholders’ equity		$	1,343,401			$	1,331,856			$	1,366,283			$	1,330,234			$	1,290,053
Total average assets		$	13,724,595			$	13,632,581			$	13,516,546			$	13,457,668			$	13,131,130
Total common shares outstanding			94,162,728				93,969,994				96,755,530				96,544,502				96,254,903
Average shares outstanding-diluted			94,384,443				96,467,728				96,957,441				96,653,401				96,506,827
Tangible shareholders’ equity to tangible assets*			9.96	%			9.88	%			10.26	%			9.99	%			9.92	%
Return on tangible equity **			6.25	%			10.23	%			11.66	%			9.84	%			8.81	%
Pre-tax pre-provision return on average assets ***			0.87	%			1.38	%			1.59	%			1.29	%			1.21	%
Tangible book value per share****		$	14.27			$	14.17			$	14.12			$	13.78			$	13.40
Operating earnings per share*****		$	0.33			$	0.36			$	0.41			$	0.33			$	0.30

 

*	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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