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 First Quarter 2016 Financial Results

TUPELO, MS, April 20, 2016/PRNewswire — BancorpSouth, Inc. (NYSE: BXS) today announced financial results for the quarter ended March 31, 2016.

Highlights for the first quarter of 2016 included:

 

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Net income of $22.5 million or $0.24 per diluted share.

 

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Generated net loan growth of $71.9 million, or 2.8 percent on an annualized basis, and deposit growth of $155.5 million, or 5.5 percent on an annualized basis.

 

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Incurred a total pre-tax charge of $13.8 million to reflect a probable and estimable liability associated with ongoing regulatory matters as well as related legal and consulting expense.

 

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Earnings were adversely impacted by a negative mortgage servicing rights (“MSR”) valuation adjustment of $8.0 million.

 

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Net operating income - excluding MSR of $36.9 million or $0.39 per diluted share.

 

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Continued stable credit quality; recorded provision for credit losses of $1.0 million for the quarter.

 

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Net interest margin remained stable at 3.56 percent.

 

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Continued focus on controlling expenses as total noninterest expense declined compared to both the first and fourth quarters of 2015, excluding disclosed non-operating items.

The Company reported net income of $22.5 million, or $0.24 per diluted share, for the first quarter of 2016 compared with net income of $32.3 million, or $0.33 per diluted share, for the first quarter of 2015 and net income of $21.2 million, or $0.22 per diluted share, for the fourth quarter of 2015.

 

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BancorpSouth, Inc.

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

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BXS Announces First Quarter Results

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April 20, 2016

 

The Company reported net operating income of $32.0 million, or $0.34 per diluted share, for the first quarter of 2016 compared to $32.3 million, or $0.33 per diluted share, for the first quarter of 2015 and $31.4 million, or $0.33 per diluted share, for the fourth quarter of 2015.

“We continue to have productive discussions with the Consumer Financial Protection Bureau and the U.S. Department of Justice regarding a settlement of their joint investigation of our fair lending practices,” remarked Dan Rollins, BancorpSouth Chairman and Chief Executive Officer. “While we continue to believe that our fair lending policies and practices are in compliance with all applicable laws and regulations, we are encouraged with the continued progress being made to resolve this matter. Thus, even though we are unable to predict the final timing of any settlement or the impact on our pending mergers, our financial results for the first quarter reflect an estimate for a liability associated with a potential settlement. We note, however, that should a settlement be reached, the final liability could differ materially from the current estimate.

“We also had a negative MSR valuation adjustment of $8.0 million that had an adverse impact on what was otherwise a very solid first quarter. Otherwise, our performance metrics continue to trend in a positive direction. We continue to maintain a very stable net interest margin while growing both sides of the balance sheet. We recorded a provision for credit losses of $1.0 million for the quarter, marking our first recorded provision since the third quarter of 2013. Our mortgage team had a nice quarter as well, reporting $10.6 million in production and servicing revenue and total production of $315.4 million. Finally, our efforts to challenge expenses continue to be reflected in our financial results. Outside of non-operating items that have been disclosed, our expense base has been stable over the past several quarters.”

Net Interest Revenue

Net interest revenue was $111.2 million for the first quarter of 2016, an increase of 4.8 percent from $106.1 million for the first quarter of 2015 and flat compared to $111.2 million for the fourth quarter of 2015. The fully taxable equivalent net interest margin was 3.56 percent for the first quarter of 2016 compared to 3.56 percent for the first quarter of 2015 and 3.58 percent for the fourth quarter of 2015. Yields on loans and leases were 4.21 percent for the first quarter of 2016 compared with 4.31 percent for the first quarter of 2015 and 4.15 percent for the fourth quarter of 2015, while yields on total interest earning assets were 3.78 percent for the first quarter of 2016 compared with 3.80 percent for the first quarter of 2015 and 3.79 percent for the fourth quarter of 2015. The average cost of deposits was 0.21 percent for the first quarter of 2016 compared to 0.24 percent for the first quarter of 2015 and 0.21 percent for the fourth quarter of 2015.

Asset, Deposit and Loan Activity

Total assets were $13.9 billion at March 31, 2016 compared with $13.6 billion at March 31, 2015. Loans and leases, net of unearned income, were $10.4 billion at March 31, 2016 compared with $9.7 billion at March 31, 2015.

 

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Total deposits were $11.5 billion at March 31, 2016 compared with $11.3 billion at March 31, 2015. A decrease in time deposits of $119.3 million, or 6.1 percent, at March 31, 2016 compared to March 31, 2015 was more than offset by growth in other lower cost deposits. Noninterest bearing demand deposits increased $188.4 million, or 6.5 percent, over the same period. Additionally, savings deposits increased $111.1 million, or 8.0 percent, while interest bearing demand deposits increased $53.9 million, or 1.1 percent, over the same period.

Provision for Credit Losses and Allowance for Credit Losses

Earnings for the quarter reflect a provision for credit losses of $1.0 million, compared to a negative provision of $5.0 million for the first quarter of 2015 and no recorded provision for the fourth quarter of 2015. Total non-performing assets (“NPAs”) were $106.9 million, or 1.02 percent of net loans and leases, at March 31, 2016 compared with $89.4 million, or 0.92 percent of net loans and leases, at March 31, 2015, and $109.7 million, or 1.06 percent of net loans and leases, at December 31, 2015.

Net charge-offs for the first quarter of 2016 were $1.0 million, compared with net charge-offs of $0.8 million for the first quarter of 2015 and net charge-offs of $6.6 million for the fourth quarter of 2015. Gross charge-offs were $3.2 million for the first quarter of 2016, compared with $4.8 million for the first quarter of 2015 and $9.5 million for the fourth quarter of 2015. Gross recoveries of previously charged-off loans were $2.3 million for the first quarter of 2016, compared with $4.0 million for the first quarter of 2015 and $3.0 million for the fourth quarter of 2015. Annualized net charge-offs were 0.04 percent of average loans and leases for the first quarter of 2016, compared with annualized net charge-offs of 0.03 percent for the first quarter of 2015 and annualized net charge-offs of 0.25 percent for the fourth quarter of 2015.

Non-performing loans (“NPLs”) were $94.2 million, or 0.90 percent of net loans and leases, at March 31, 2016, compared with $61.5 million, or 0.63 percent of net loans and leases, at March 31, 2015, and $95.0 million, or 0.92 percent of net loans and leases, at December 31, 2015. The allowance for credit losses was $126.5 million, or 1.21 percent of net loans and leases, at March 31, 2016 compared with $136.7 million, or 1.40 percent of net loans and leases, at March 31, 2015 and $126.5 million, or 1.22 percent of net loans and leases, at December 31, 2015.

NPLs at March 31, 2016 consisted primarily of $81.9 million of nonaccrual loans, compared with $83.0 million of nonaccrual loans at December 31, 2015. NPLs at March 31, 2016 also included $4.6 million of loans 90 days or more past due and still accruing, compared with $2.0 million of such loans at December 31, 2015, and included restructured loans still accruing of $7.8 million at March 31, 2016, compared with $9.9 million of such loans at December 31, 2015. Early stage past due loans, representing loans 30-89 days past due, totaled $23.6 million at March 31, 2016 compared to $24.6 million at December 31, 2015. Other real estate owned decreased $2.1 million to $12.7 million during the first quarter of 2016 from $14.8 million at December 31, 2015.

 

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BXS Announces First Quarter Results

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Noninterest Revenue

Noninterest revenue was $65.5 million for the first quarter of 2016, compared with $73.3 million for the first quarter of 2015 and $67.4 million for the fourth quarter of 2015. These results included a negative MSR valuation adjustment of $8.0 million for the first quarter of 2016 compared with a negative MSR valuation adjustment of $3.0 million for the first quarter of 2015 and a positive MSR valuation adjustment of $2.9 million for the fourth 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 $10.6 million for the first quarter of 2016, compared with $11.6 million for the first quarter of 2015 and $7.7 million for the fourth quarter of 2015. Mortgage origination volume for the first quarter of 2016 was $315.4 million, compared with $311.1 million for the first quarter of 2015 and $310.0 million for the fourth quarter of 2015.

Credit and debit card fee revenue was $9.0 million for the first quarter of 2016, compared with $8.5 million for the first quarter of 2015 and $9.4 million for the fourth quarter of 2015. Deposit service charge revenue was $11.0 million for the first quarter of 2016, compared with $11.3 million for the first quarter of 2015 and $11.8 million for the fourth quarter of 2015. Insurance commission revenue was $33.2 million for the first quarter of 2016, compared with $33.5 million for the first quarter of 2015 and $25.3 million for the fourth quarter of 2015. Wealth management revenue was $5.1 million for the first quarter of 2016, compared with $6.2 million for the first quarter of 2015 and $5.4 million for the fourth quarter of 2015.

Noninterest Expense

Noninterest expense for the first quarter of 2016 was $142.3 million, compared with $136.9 million for the first quarter of 2015 and $148.4 million for the fourth quarter of 2015. Salaries and employee benefits expense was $82.5 million for the first quarter of 2016 compared to $81.2 million for the first quarter of 2015 and $80.2 million for the fourth quarter of 2015. Occupancy expense was $10.3 million for the first quarter of 2016 compared with $10.2 million for the first quarter of 2015 and $10.4 million for the fourth quarter of 2015. Other noninterest expense was $33.2 million for the first quarter of 2016 compared to $39.3 million for the first quarter of 2015 and $51.5 million for the fourth quarter of 2015. Total noninterest expense for the first quarter of 2016 included a total charge of $13.8 million to reflect a probable and estimable liability associated with ongoing regulatory matters, $10.3 million of which is reflected as regulatory settlement expense and $3.5 million of which is included in other noninterest expense. Other noninterest 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.

Capital Management

The Company’s equity capitalization is comprised entirely of common stock. BancorpSouth’s ratio of shareholders’ equity to assets was 12.06 percent at March 31, 2016, compared with 12.07 percent at March 31, 2015 and 12.00 percent at December 31, 2015. The ratio of tangible shareholders’ equity to tangible assets was 10.05 percent at March 31, 2016, compared with 9.99 percent at March 31, 2015 and 9.96 percent at December 31, 2015.

 

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Estimated regulatory capital ratios at March 31, 2016 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 12.34 percent at March 31, 2016 and total risk based capital of 13.43 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 March 31, 2016, OIB, on a consolidated basis, reported total assets of $672.3 million, total loans of $456.8 million and total deposits of $575.7 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 March 31, 2016, Central Community Corporation, on a consolidated basis, reported total assets of $1.5 billion, total loans of $614.6 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

 

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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 the most recent information regarding the status of the merger with Ouachita Bancshares Corp. and the status of the merger with Central Community Corporation in our periodic reports, please refer to the section titled “Recent Acquisitions and Transaction Activity” in Part I, Item 1, and Part I, Item 1A, of the Annual Report on Form 10-K that was previously filed with the SEC on February 23, 2016.

Summary

Rollins concluded, “Our financial results reflect steady improvement in our core operating performance quarter after quarter. Our bankers are growing loans and deposits, our mortgage lenders continue to grow home purchase money, and our insurance producers are working diligently to grow their customer base to help offset industry pricing headwinds. Importantly, we are achieving this growth while holding operating expenses relatively flat. As we look forward, I’m confident the simple formula of growing customers and challenging expenses will allow us to continue to improve our operating results.”

Conference Call

BancorpSouth will conduct a conference call to discuss its first quarter 2016 results on April 21, 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.

About BancorpSouth, Inc.

BancorpSouth, Inc. is a financial holding company headquartered in Tupelo, Mississippi, with $13.9 billion in assets. BancorpSouth Bank, a wholly-owned subsidiary of BancorpSouth, Inc., operates 239 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.

 

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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 First Quarter Results

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BancorpSouth, Inc.

Selected Financial Information

(Dollars in thousands, except per share data)

(Unaudited)

 

		Quarter Ended				Quarter Ended				Quarter Ended				Quarter Ended				Quarter Ended
		3/31/2016				12/31/2015				9/30/2015				6/30/2015				3/31/2015
Earnings Summary:
Interest revenue		$	117,972			$	118,050			$	118,201			$	114,630			$	113,497
Interest expense			6,813				6,820				7,131				7,321				7,424
Net interest revenue			111,159				111,230				111,070				107,309				106,073
Provision for credit losses			1,000				—				(3,000	)			(5,000	)			(5,000	)
Net interest revenue, after provision for credit losses			110,159				111,230				114,070				112,309				111,073
Noninterest revenue			65,515				67,386				62,953				74,314				73,315
Noninterest expense			142,300				148,351				126,450				128,177				136,933
Income before income taxes			33,374				30,265				50,573				58,446				47,455
Income tax expense			10,825				9,096				16,230				18,733				15,189
Net income		$	22,549			$	21,169			$	34,343			$	39,713			$	32,266
Balance Sheet - Period End Balances
Total assets		$	13,926,398			$	13,798,662			$	13,787,424			$	13,634,931			$	13,630,322
Total earning assets			12,760,031				12,656,791				12,663,944				12,492,532				12,468,322
Total securities			2,016,373				2,082,329				2,161,125				2,251,153				2,194,373
Loans and leases, net of unearned income			10,444,697				10,372,778				10,219,576				10,007,571				9,726,970
Allowance for credit losses			126,506				126,458				133,009				138,312				136,660
Total deposits			11,486,697				11,331,161				11,141,946				11,134,961				11,252,654
Long-term debt			67,681				69,775				71,868				73,962				76,055
Total shareholders’ equity			1,679,793				1,655,444				1,644,820				1,680,196				1,645,208
Balance Sheet - Average Balances
Total assets		$	13,851,661			$	13,724,595			$	13,632,581			$	13,516,546			$	13,457,668
Total earning assets			12,830,000				12,628,685				12,548,967				12,443,960				12,398,058
Total securities			2,037,739				2,110,195				2,207,935				2,211,931				2,190,989
Loans and leases, net of unearned income			10,372,925				10,321,299				10,110,995				9,868,318				9,670,987
Total deposits			11,431,480				11,182,750				11,140,542				11,148,246				11,126,210
Long-term debt			67,750				69,775				71,868				73,962				76,078
Total shareholders’ equity			1,668,465				1,650,924				1,680,123				1,659,991				1,624,496
Nonperforming Assets:
Non-accrual loans and leases		$	81,926			$	83,028			$	70,237			$	67,766			$	54,418
Loans and leases 90+ days past due, still accruing			4,567				2,013				1,436				1,568				1,615
Restructured loans and leases, still accruing			7,753				9,876				18,578				10,109				5,433
Non-performing loans (NPLs)			94,246				94,917				90,251				79,443				61,466
Other real estate owned			12,685				14,759				23,696				24,299				27,889
Non-performing assets (NPAs)		$	106,931			$	109,676			$	113,947			$	103,742			$	89,355
Financial Ratios and Other Data:
Return on average assets			0.65	%			0.61	%			1.00	%			1.18	%			0.97	%
Return on average shareholders’ equity			5.44	%			5.09	%			8.11	%			9.60	%			8.06	%
Noninterest income to average assets			1.90	%			1.95	%			1.83	%			2.21	%			2.21	%
Noninterest expense to average assets			4.13	%			4.29	%			3.68	%			3.80	%			4.13	%
Net interest margin-fully taxable equivalent			3.56	%			3.58	%			3.59	%			3.54	%			3.56	%
Net interest rate spread			3.47	%			3.48	%			3.49	%			3.44	%			3.46	%
Loan/deposit ratio			90.93	%			91.54	%			91.72	%			89.88	%			86.44	%
Price to earnings mult (avg)			17.33				18.17				16.98				18.80				18.43
Market value to book value			119.81	%			136.46	%			135.80	%			148.34	%			136.26	%
Market value to book value (avg)			116.78	%			142.53	%			140.68	%			142.10	%			127.91	%
Market value to tangible book value			147.04	%			168.15	%			167.71	%			182.42	%			168.52	%
Market value to tangible book value (avg)			143.33	%			175.64	%			173.74	%			174.75	%			158.20	%
Headcount FTE			3,966				3,970				3,903				3,935				3,924
Non-GAAP Financial Ratios:
Operating return on average assets-excluding MSR			1.07	%			0.86	%			1.09	%			1.10	%			1.03	%
Operating return on average shareholders’ equity-excluding MSR			8.89	%			7.12	%			8.88	%			8.94	%			8.52	%
Return on tangible equity			6.63	%			6.25	%			10.23	%			11.66	%			9.84	%
Operating return on tangible equity-excluding MSR			10.84	%			8.75	%			11.21	%			10.87	%			10.41	%
Efficiency ratio (tax equivalent)			79.39	%			81.86	%			71.56	%			69.52	%			75.17	%
Operating efficiency ratio-excluding MSR (tax equivalent)			68.66	%			73.89	%			69.45	%			71.16	%			73.93	%

 

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BXS Announces First Quarter Results

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BancorpSouth, Inc.

Selected Financial Information

(Dollars in thousands, except per share data)

(Unaudited)

 

		Quarter Ended				Quarter Ended				Quarter Ended				Quarter Ended				Quarter Ended
		3/31/2016				12/31/2015				9/30/2015				6/30/2015				3/31/2015
Credit Quality Ratios:
Net (recoveries) charge-offs to average loans and leases (annualized)			0.04	%			0.25	%			0.09	%			(0.27	%)			0.03	%
Provision for credit losses to average loans and leases (annualized)			0.04	%			0.00	%			(0.12	%)			(0.20	%)			(0.21	%)
Allowance for credit losses to net loans and leases			1.21	%			1.22	%			1.30	%			1.38	%			1.40	%
Allowance for credit losses to non-performing loans and leases			134.23	%			133.23	%			147.38	%			174.10	%			222.33	%
Allowance for credit losses to non-performing assets			118.31	%			115.30	%			116.73	%			133.32	%			152.94	%
Non-performing loans and leases to net loans and leases			0.90	%			0.92	%			0.88	%			0.79	%			0.63	%
Non-performing assets to net loans and leases			1.02	%			1.06	%			1.11	%			1.04	%			0.92	%
Equity Ratios:
Total shareholders’ equity to total assets			12.06	%			12.00	%			11.93	%			12.32	%			12.07	%
Tangible shareholders’ equity to tangible assets			10.05	%			9.96	%			9.88	%			10.26	%			9.99	%
Capital Adequacy:
Common Equity Tier 1 capital			12.14	%			12.07	%			12.08	%			12.60	%			12.60	%
Tier 1 capital			12.34	%			12.27	%			12.29	%			12.81	%			12.81	%
Total capital			13.43	%			13.37	%			13.45	%			14.04	%			14.07	%
Tier 1 leverage capital			10.61	%			10.61	%			10.56	%			10.96	%			10.71	%
Estimated for current quarter
Common Share Data:
Basic earnings per share		$	0.24			$	0.22			$	0.36			$	0.41			$	0.33
Diluted earnings per share			0.24				0.22				0.36				0.41				0.33
Cash dividends per share			0.10				0.10				0.10				0.08				0.08
Book value per share			17.79				17.58				17.50				17.37				17.04
Tangible book value per share			14.49				14.27				14.17				14.12				13.78
Market value per share (last)			21.31				23.99				23.77				25.76				23.22
Market value per share (high)			23.64				27.23				26.54				26.68				23.68
Market value per share (low)			18.69				22.44				22.09				22.83				19.64
Market value per share (avg)			20.77				25.06				24.62				24.68				21.80
Dividend payout ratio			41.85	%			44.46	%			28.01	%			18.25	%			22.40	%
Total shares outstanding			94,438,626				94,162,728				93,969,994				96,755,530				96,544,502
Average shares outstanding - basic			94,369,211				94,111,408				96,202,871				96,625,794				96,359,885
Average shares outstanding - diluted			94,593,540				94,384,443				96,467,728				96,957,441				96,653,401
Yield/Rate:
(Taxable equivalent basis)
Loans, loans held for sale, and leases net of unearned income			4.21	%			4.15	%			4.22	%			4.23	%			4.31	%
Available-for-sale securities:
Taxable			1.40	%			1.48	%			1.40	%			1.40	%			1.54	%
Tax-exempt			5.36	%			5.32	%			5.32	%			5.44	%			5.40	%
Short-term investments			0.33	%			0.22	%			0.20	%			0.24	%			0.22	%
Total interest earning assets and revenue			3.78	%			3.79	%			3.82	%			3.78	%			3.80	%
Deposits			0.21	%			0.21	%			0.22	%			0.23	%			0.24	%
Demand - interest bearing			0.17	%			0.18	%			0.18	%			0.19	%			0.18	%
Savings			0.12	%			0.12	%			0.12	%			0.12	%			0.12	%
Other time			0.73	%			0.71	%			0.76	%			0.79	%			0.82	%
Short-term borrowings			0.14	%			0.12	%			0.12	%			0.11	%			0.12	%
Total int bearing dep & s/t borrowings			0.28	%			0.28	%			0.30	%			0.31	%			0.31	%
Junior subordinated debt			3.18	%			2.93	%			2.87	%			2.86	%			2.84	%
Long-term debt			3.08	%			2.95	%			2.91	%			2.90	%			2.88	%
Total interest bearing liabilities and expense			0.31	%			0.31	%			0.32	%			0.34	%			0.34	%
Interest bearing liabilities to interest earning assets			69.75	%			69.23	%			69.68	%			70.36	%			71.13	%
Net interest tax equivalent adjustment		$	2,558			$	2,601			$	2,558			$	2,628			$	2,653

 

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BXS Announces First Quarter Results

Page 10

April 20, 2016

 

BancorpSouth, Inc.

Consolidated Balance Sheets

(Unaudited)

 

		Mar-16				Dec-15				Sep-15				Jun-15				Mar-15
		(Dollars in thousands)
Assets
Cash and due from banks		$	197,538			$	154,192			$	159,923			$	183,541			$	199,337
Interest bearing deposits with other banks			148,915				43,777				113,068				34,438				360,469
Available-for-sale securities, at fair value			2,016,373				2,082,329				2,161,125				2,251,153				2,194,373
Loans and leases			10,475,528				10,404,326				10,254,013				10,041,455				9,761,555
Less: Unearned income			30,831				31,548				34,437				33,884				34,585
Allowance for credit losses			126,506				126,458				133,009				138,312				136,660
Net loans and leases			10,318,191				10,246,320				10,086,567				9,869,259				9,590,310
Loans held for sale			150,046				157,907				170,175				199,370				186,510
Premises and equipment, net			306,765				308,125				304,317				303,837				305,335
Accrued interest receivable			41,401				40,901				41,599				41,065				42,933
Goodwill			291,498				291,498				291,498				291,498				291,498
Other identifiable intangibles			19,664				20,545				21,466				22,415				23,476
Bank owned life insurance			253,427				251,534				249,825				247,983				246,148
Other real estate owned			12,685				14,759				23,696				24,299				27,889
Other assets			169,895				186,775				164,165				166,073				162,044
Total Assets		$	13,926,398			$	13,798,662			$	13,787,424			$	13,634,931			$	13,630,322
Liabilities
Deposits:
Demand: Noninterest bearing		$	3,103,321			$	3,031,528			$	3,053,439			$	2,911,972			$	2,914,949
Interest bearing			5,033,565				5,003,806				4,794,656				4,881,469				4,979,710
Savings			1,506,942				1,442,336				1,409,856				1,407,616				1,395,857
Other time			1,842,869				1,853,491				1,883,995				1,933,904				1,962,138
Total deposits			11,486,697				11,331,161				11,141,946				11,134,961				11,252,654
Federal funds purchased and securities sold under agreement to repurchase			431,089				405,937				425,203				375,980				384,829
Short-term Federal Home Loan Bank borrowings and other short-term borrowing			—				62,000				224,500				92,500				1,500
Accrued interest payable			3,305				3,071				3,353				3,494				3,371
Junior subordinated debt securities			23,198				23,198				23,198				23,198				23,198
Long-term debt			67,681				69,775				71,868				73,962				76,055
Other liabilities			234,635				248,076				252,536				250,640				243,507
Total Liabilities			12,246,605				12,143,218				12,142,604				11,954,735				11,985,114
Shareholders’ Equity
Common stock			236,097				235,407				234,925				241,889				241,361
Capital surplus			283,800				282,934				278,998				337,272				331,016
Accumulated other comprehensive loss			(32,144	)			(41,825	)			(36,355	)			(41,288	)			(37,033	)
Retained earnings			1,192,040				1,178,928				1,167,252				1,142,323				1,109,864
Total Shareholders’ Equity			1,679,793				1,655,444				1,644,820				1,680,196				1,645,208
Total Liabilities & Shareholders’ Equity		$	13,926,398			$	13,798,662			$	13,787,424			$	13,634,931			$	13,630,322

 

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BXS Announces First Quarter Results

Page 11

April 20, 2016

 

BancorpSouth, Inc.

Consolidated Average Balance Sheets

(Unaudited)

 

		Mar-16				Dec-15				Sep-15				Jun-15				Mar-15
		(Dollars in thousands)
Assets
Cash and due from banks		$	71,528			$	159,696			$	159,569			$	152,792			$	132,734
Interest bearing deposits with other banks			316,108				69,552				72,438				212,634				426,792
Available-for-sale securities, at fair value			2,037,739				2,110,195				2,207,935				2,211,931				2,190,989
Loans and leases			10,405,063				10,353,913				10,144,874				9,903,034				9,706,941
Less: Unearned income			32,138				32,614				33,879				34,716				35,954
Allowance for credit losses			126,567				132,375				137,547				140,483				141,299
Net loans and leases			10,246,358				10,188,924				9,973,448				9,727,835				9,529,688
Loans held for sale			103,227				127,638				157,598				151,077				109,291
Premises and equipment, net			308,065				306,881				304,948				305,335				305,277
Accrued interest receivable			38,306				38,142				38,847				38,268				39,279
Goodwill			291,498				291,498				291,498				291,498				291,498
Other identifiable intangibles			19,987				20,880				21,812				22,780				23,834
Bank owned life insurance			252,422				250,577				248,798				246,872				246,538
Other real estate owned			14,523				21,049				24,008				27,190				32,062
Other assets			151,900				139,563				131,682				128,334				129,686
Total Assets		$	13,851,661			$	13,724,595			$	13,632,581			$	13,516,546			$	13,457,668
Liabilities
Deposits:
Demand: Noninterest bearing		$	3,014,896			$	3,106,947			$	2,992,903			$	2,895,451			$	2,807,816
Interest bearing			5,102,648				4,782,234				4,822,567				4,899,467				4,985,577
Savings			1,468,262				1,421,361				1,413,187				1,404,336				1,358,565
Other time			1,845,674				1,872,208				1,911,885				1,948,992				1,974,252
Total deposits			11,431,480				11,182,750				11,140,542				11,148,246				11,126,210
Federal funds purchased and securities sold under agreement to repurchase			431,260				466,865				439,503				399,447				398,237
Short-term Federal Home Loan Bank borrowings and other short-term borrowing			10,484				107,408				62,136				6,555				3,056
Accrued interest payable			3,248				3,340				3,600				3,457				3,338
Junior subordinated debt securities			23,198				23,198				23,198				23,198				23,198
Long-term debt			67,750				69,775				71,868				73,962				76,078
Other liabilities			215,776				220,335				211,611				201,690				203,055
Total Liabilities			12,183,196				12,073,671				11,952,458				11,856,555				11,833,172
Shareholders’ Equity
Common stock			235,946				235,227				240,473				241,540				240,992
Capital surplus			282,796				282,076				325,118				332,993				326,476
Accumulated other comprehensive loss			(36,184	)			(38,618	)			(40,476	)			(38,534	)			(39,529	)
Retained earnings			1,185,907				1,172,239				1,155,008				1,123,992				1,096,557
Total Shareholders’ Equity			1,668,465				1,650,924				1,680,123				1,659,991				1,624,496
Total Liabilities & Shareholders’ Equity		$	13,851,661			$	13,724,595			$	13,632,581			$	13,516,546			$	13,457,668

 

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BXS Announces First Quarter Results

Page 12

April 20, 2016

 

BancorpSouth, Inc.

Consolidated Condensed Statements of Income

(Dollars in thousands, except per share data)

(Unaudited)

 

		Quarter Ended																				YTD
		Mar-16				Dec-15				Sep-15				Jun-15				Mar-15				Mar-16				Mar-15
INTEREST REVENUE:
Loans and leases		$	107,805			$	107,164			$	107,086			$	103,428			$	102,135			$	107,805			$	102,135
Deposits with other banks			263				40				36				126				236				263				236
Available-for-sale securities:
Taxable			5,888				6,550				6,490				6,424				6,844				5,888				6,844
Tax-exempt			3,032				3,137				3,226				3,335				3,377				3,032				3,377
Loans held for sale			984				1,159				1,363				1,317				905				984				905
Total interest revenue			117,972				118,050				118,201				114,630				113,497				117,972				113,497
INTEREST EXPENSE:
Interest bearing demand			2,163				2,166				2,209				2,262				2,183				2,163				2,183
Savings			443				434				431				426				412				443				412
Other time			3,354				3,356				3,646				3,827				4,008				3,354				4,008
Federal funds purchased and securities sold under agreement to repurchase			140				112				104				85				82				140				82
Long-term debt			530				581				571				556				577				530				577
Junior subordinated debt			183				171				168				165				163				183				163
Other			—				—				2				—				(1	)			—				(1	)
Total interest expense			6,813				6,820				7,131				7,321				7,424				6,813				7,424
Net interest revenue			111,159				111,230				111,070				107,309				106,073				111,159				106,073
Provision for credit losses			1,000				—				(3,000	)			(5,000	)			(5,000	)			1,000				(5,000	)
Net interest revenue, after provision for credit losses			110,159				111,230				114,070				112,309				111,073				110,159				111,073
NONINTEREST REVENUE:
Mortgage lending			2,618				10,522				2,339				14,102				8,567				2,618				8,567
Credit card, debit card and merchant fees			8,961				9,414				9,282				9,298				8,539				8,961				8,539
Deposit service charges			11,014				11,836				12,150				11,527				11,252				11,014				11,252
Security gains, net			2				48				33				41				14				2				14
Insurance commissions			33,249				25,348				28,584				29,319				33,493				33,249				33,493
Wealth Management			5,109				5,375				5,567				5,508				6,210				5,109				6,210
Other			4,562				4,843				4,998				4,519				5,240				4,562				5,240
Total noninterest revenue			65,515				67,386				62,953				74,314				73,315				65,515				73,315
NONINTEREST EXPENSE:
Salaries and employee benefits			82,467				80,177				81,354				79,759				81,179				82,467				81,179
Occupancy, net of rental income			10,273				10,434				10,819				10,419				10,194				10,273				10,194
Equipment			3,765				3,569				3,742				4,024				3,974				3,765				3,974
Deposit insurance assessments			2,288				2,630				2,191				2,377				2,311				2,288				2,311
Regulatory settlement			10,277				—				—				—				—				10,277				—
Other			33,230				51,541				28,344				31,598				39,275				33,230				39,275
Total noninterest expenses			142,300				148,351				126,450				128,177				136,933				142,300				136,933
Income before income taxes			33,374				30,265				50,573				58,446				47,455				33,374				47,455
Income tax expense			10,825				9,096				16,230				18,733				15,189				10,825				15,189
Net income		$	22,549			$	21,169			$	34,343			$	39,713			$	32,266			$	22,549			$	32,266
Net income per share: Basic		$	0.24			$	0.22			$	0.36			$	0.41			$	0.33			$	0.24			$	0.33
Diluted		$	0.24			$	0.22			$	0.36			$	0.41			$	0.33			$	0.24			$	0.33

 

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BXS Announces First Quarter Results

Page 13

April 20, 2016

 

BancorpSouth, Inc.

Selected Loan Data

(Dollars in thousands)

(Unaudited)

 

		Quarter Ended
		Mar-16				Dec-15				Sep-15				Jun-15				Mar-15
LOAN AND LEASE PORTFOLIO:
Commercial and industrial		$	1,716,477			$	1,747,774			$	1,710,497			$	1,730,142			$	1,676,366
Real estate
Consumer mortgages			2,480,828				2,472,202				2,447,132				2,374,122				2,301,112
Home equity			605,228				589,752				573,566				558,460				538,042
Agricultural			239,422				259,360				252,381				239,884				236,898
Commercial and industrial-owner occupied			1,654,577				1,617,429				1,605,811				1,596,244				1,518,153
Construction, acquisition and development			966,362				945,045				900,875				860,407				892,730
Commercial real estate			2,233,742				2,188,048				2,141,398				2,081,394				1,993,473
Credit cards			106,714				112,165				109,576				110,552				106,287
All other			441,347				441,003				478,340				456,366				463,909
Total loans		$	10,444,697			$	10,372,778			$	10,219,576			$	10,007,571			$	9,726,970
ALLOWANCE FOR CREDIT LOSSES:
Balance, beginning of period		$	126,458			$	133,009			$	138,312			$	136,660			$	142,443
Loans and leases charged-off:
Commercial and industrial			(140	)			(6,193	)			(2,010	)			(1,436	)			(383	)
Real estate
Consumer mortgages			(710	)			(1,146	)			(1,382	)			(575	)			(892	)
Home equity			(550	)			(147	)			(314	)			(245	)			(498	)
Agricultural			(11	)			(16	)			(9	)			—				(8	)
Commercial and industrial-owner occupied			(154	)			(357	)			(645	)			(404	)			(394	)
Construction, acquisition and development			(226	)			(221	)			(203	)			(272	)			(343	)
Commercial real estate			(245	)			(122	)			(1,477	)			(1,117	)			(1,007	)
Credit cards			(720	)			(723	)			(706	)			(527	)			(676	)
All other			(487	)			(623	)			(628	)			(441	)			(579	)
Total loans charged-off			(3,243	)			(9,548	)			(7,374	)			(5,017	)			(4,780	)
Recoveries:
Commercial and industrial			212				354				897				282				502
Real estate
Consumer mortgages			455				596				461				1,024				612
Home equity			80				123				90				185				241
Agricultural			36				20				59				36				269
Commercial and industrial-owner occupied			125				307				1,831				146				550
Construction, acquisition and development			272				1,061				1,084				8,978				604
Commercial real estate			683				149				187				600				720
Credit cards			181				152				170				183				153
All other			247				235				292				235				346
Total recoveries			2,291				2,997				5,071				11,669				3,997
Net (charge-offs) recoveries			(952	)			(6,551	)			(2,303	)			6,652				(783	)
Provision charged to operating expense			1,000				—				(3,000	)			(5,000	)			(5,000	)
Balance, end of period		$	126,506			$	126,458			$	133,009			$	138,312			$	136,660
Average loans for period		$	10,372,925			$	10,321,299			$	10,110,995			$	9,868,318			$	9,670,987
Ratio:
Net (charge-offs) recoveries to average loans (annualized)			0.04	%			0.25	%			0.09	%			(0.27	%)			0.03	%

 

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BXS Announces First Quarter Results

Page 14

April 20, 2016

 

BancorpSouth, Inc.

Selected Loan Data

(Dollars in thousands)

(Unaudited)

 

		Quarter Ended
		Mar-16				Dec-15				Sep-15				Jun-15				Mar-15
NON-PERFORMING ASSETS
NON-PERFORMING LOANS AND LEASES:
Nonaccrual Loans and Leases
Commercial and industrial		$	10,248			$	8,493			$	15,697			$	9,740			$	3,923
Real estate
Consumer mortgages			22,968				21,637				21,959				21,636				21,435
Home equity			3,564				4,021				3,664				3,550				2,269
Agricultural			932				921				484				259				259
Commercial and industrial-owner occupied			16,633				16,512				12,690				14,007				9,687
Construction, acquisition and development			7,720				9,130				4,240				5,411				5,111
Commercial real estate			19,417				21,741				10,730				12,397				11,107
Credit cards			188				188				215				157				118
All other			256				385				558				609				509
Total nonaccrual loans and leases		$	81,926			$	83,028			$	70,237			$	67,766			$	54,418
Loans and Leases 90+ Days Past Due, Still Accruing:			4,567				2,013				1,436				1,568				1,615
Restructured Loans and Leases, Still Accruing			7,753				9,876				18,578				10,109				5,433
Total non-performing loans and leases			94,246				94,917				90,251				79,443				61,466
OTHER REAL ESTATE OWNED:			12,685				14,759				23,696				24,299				27,889
Total Non-performing Assets		$	106,931			$	109,676			$	113,947			$	103,742			$	89,355
Additions to Nonaccrual Loans and Leases During the Quarter		$	15,933			$	34,050			$	22,271			$	35,315			$	23,607
Loans and Leases 30-89 Days Past Due, Still Accruing:
Commercial and industrial		$	3,758			$	2,409			$	4,985			$	3,081			$	3,270
Real estate
Consumer mortgages			11,985				15,128				10,789				10,622				9,955
Home equity			2,414				2,456				1,455				2,527				2,594
Agricultural			240				303				393				116				161
Commercial and industrial-owner occupied			669				1,018				3,888				2,643				3,026
Construction, acquisition and development			1,489				1,070				1,218				1,120				5,471
Commercial real estate			1,831				830				798				1,651				3,032
Credit cards			569				677				788				529				581
All other			606				744				1,334				1,481				1,014
Total Loans and Leases 30-89 days past due, still accruing		$	23,561			$	24,635			$	25,648			$	23,770			$	29,104
Credit Quality Ratios:
Provision for credit losses to average loans and leases (annualized)			0.04	%			0.00	%			(0.12	%)			(0.20	%)			(0.21	%)
Allowance for credit losses to net loans and leases			1.21	%			1.22	%			1.30	%			1.38	%			1.40	%
Allowance for credit losses to non-performing loans and leases			134.23	%			133.23	%			147.38	%			174.10	%			222.33	%
Allowance for credit losses to non-performing assets			118.31	%			115.30	%			116.73	%			133.32	%			152.94	%
Non-performing loans and leases to net loans and leases			0.90	%			0.92	%			0.88	%			0.79	%			0.63	%
Non-performing assets to net loans and leases			1.02	%			1.06	%			1.11	%			1.04	%			0.92	%

 

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BXS Announces First Quarter Results

Page 15

April 20, 2016

 

BancorpSouth, Inc.

Selected Loan Data

(Dollars in thousands)

(Unaudited)

 

		March 31, 2016
						Special
		Pass				Mention				Substandard				Doubtful				Loss				Impaired				Total
LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE:
Commercial and industrial		$	1,672,249			$	—			$	35,633			$	394			$	—			$	8,201			$	1,716,477
Real estate
Consumer mortgages			2,407,869				—				69,215				11				—				3,733				2,480,828
Home equity			593,500				—				9,938				—				—				1,790				605,228
Agricultural			229,935				—				8,632				—				—				855				239,422
Commercial and industrial-owner occupied			1,595,424				—				47,293				—				—				11,860				1,654,577
Construction, acquisition and development			944,533				—				15,908				—				—				5,921				966,362
Commercial real estate			2,166,616				—				49,440				400				—				17,286				2,233,742
Credit cards			106,714				—				—				—				—				—				106,714
All other			436,409				—				4,838				100				—				—				441,347
Total loans		$	10,153,249			$	—			$	240,897			$	905			$	—			$	49,646			$	10,444,697
		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

 

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BXS Announces First Quarter Results

Page 16

April 20, 2016

 

BancorpSouth, Inc.

Geographical Information

(Dollars in thousands)

(Unaudited)

 

		March 31, 2016
		Alabama
		and Florida
		Panhandle				Arkansas				Louisiana				Mississippi				Missouri				Tennessee				Texas				Other				Total
LOAN AND LEASE PORTFOLIO:
Commercial and industrial		$	150,326			$	188,911			$	197,183			$	702,459			$	87,479			$	120,117			$	224,543			$	45,459			$	1,716,477
Real estate
Consumer mortgages			298,267				327,457				221,327				805,657				76,343				277,477				454,925				19,375				2,480,828
Home equity			91,297				41,653				65,239				223,097				23,336				144,591				14,238				1,777				605,228
Agricultural			7,714				82,747				26,854				67,290				3,196				12,274				39,347				—				239,422
Commercial and industrial-owner occupied			200,951				179,923				197,650				677,771				56,581				134,104				207,597				—				1,654,577
Construction, acquisition and development			114,795				104,591				66,009				308,487				23,923				140,730				207,826				1				966,362
Commercial real estate			339,339				362,449				244,741				599,878				198,505				179,555				309,275				—				2,233,742
Credit cards			—				—				—				—				—				—				—				106,714				106,714
All other			66,946				49,535				30,177				177,429				3,066				37,723				54,958				21,513				441,347
Total loans		$	1,269,635			$	1,337,266			$	1,049,180			$	3,562,068			$	472,429			$	1,046,571			$	1,512,709			$	194,839			$	10,444,697
NON-PERFORMING LOANS AND LEASES:
Commercial and industrial		$	130			$	668			$	731			$	5,780			$	—			$	175			$	1,950			$	1,740			$	11,174
Real estate
Consumer mortgages			899				2,797				1,867				9,063				758				635				1,815				8,602				26,436
Home equity			798				1,286				490				452				—				555				—				3				3,584
Agricultural			—				—				—				959				—				—				—				—				959
Commercial and industrial-owner occupied			1,640				2,296				2,293				11,878				1,889				35				1,259				—				21,290
Construction, acquisition and development			812				630				—				6,285				1,241				8				14				1				8,991
Commercial real estate			1,285				1,146				2,885				11,908				—				2,196				166				—				19,586
Credit cards			—				—				—				—				—				—				—				1,212				1,212
All other			100				696				24				176				—				18				—				—				1,014
Total loans		$	5,664			$	9,519			$	8,290			$	46,501			$	3,888			$	3,622			$	5,204			$	11,558			$	94,246
NON-PERFORMING LOANS AND LEASES
AS A PERCENTAGE OF OUTSTANDING:
Commercial and industrial			0.09	%			0.35	%			0.37	%			0.82	%			0.00	%			0.15	%			0.87	%			3.83	%			0.65	%
Real estate
Consumer mortgages			0.30	%			0.85	%			0.84	%			1.12	%			0.99	%			0.23	%			0.40	%			44.40	%			1.07	%
Home equity			0.87	%			3.09	%			0.75	%			0.20	%			0.00	%			0.38	%			0.00	%			0.17	%			0.59	%
Agricultural			0.00	%			0.00	%			0.00	%			1.43	%			0.00	%			0.00	%			0.00	%			N/A				0.40	%
Commercial and industrial-owner occupied			0.82	%			1.28	%			1.16	%			1.75	%			3.34	%			0.03	%			0.61	%			N/A				1.29	%
Construction, acquisition and development			0.71	%			0.60	%			0.00	%			2.04	%			5.19	%			0.01	%			0.01	%			100.00	%			0.93	%
Commercial real estate			0.38	%			0.32	%			1.18	%			1.99	%			0.00	%			1.22	%			0.05	%			N/A				0.88	%
Credit cards			N/A				N/A				N/A				N/A				N/A				N/A				N/A				1.14	%			1.14	%
All other			0.15	%			1.41	%			0.08	%			0.10	%			0.00	%			0.05	%			0.00	%			0.00	%			0.23	%
Total loans			0.45	%			0.71	%			0.79	%			1.31	%			0.82	%			0.35	%			0.34	%			5.93	%			0.90	%

 

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BXS Announces First Quarter Results

Page 17

April 20, 2016

 

BancorpSouth, Inc.

Noninterest Revenue and Expense

(Dollars in thousands)

(Unaudited)

 

		Quarter Ended																				YTD
		Mar-16				Dec-15				Sep-15				Jun-15				Mar-15				Mar-16				Mar-15
NONINTEREST REVENUE:
Mortgage lending		$	2,618			$	10,522			$	2,339			$	14,102			$	8,567			$	2,618			$	8,567
Credit card, debit card and merchant fees			8,961				9,414				9,282				9,298				8,539				8,961				8,539
Deposit service charges			11,014				11,836				12,150				11,527				11,252				11,014				11,252
Securities gains, net			2				48				33				41				14				2				14
Insurance commissions			33,249				25,348				28,584				29,319				33,493				33,249				33,493
Trust income			3,430				3,469				3,653				3,543				4,036				3,430				4,036
Annuity fees			477				449				539				470				558				477				558
Brokerage commissions and fees			1,202				1,457				1,375				1,495				1,616				1,202				1,616
Bank-owned life insurance			1,893				1,881				1,842				1,835				1,899				1,893				1,899
Other miscellaneous income			2,669				2,962				3,156				2,684				3,341				2,669				3,341
Total noninterest revenue		$	65,515			$	67,386			$	62,953			$	74,314			$	73,315			$	65,515			$	73,315
NONINTEREST EXPENSE:
Salaries and employee benefits		$	82,467			$	80,177			$	81,354			$	79,759			$	81,179			$	82,467			$	81,179
Occupancy, net of rental income			10,273				10,434				10,819				10,419				10,194				10,273				10,194
Equipment			3,765				3,569				3,742				4,024				3,974				3,765				3,974
Deposit insurance assessments			2,288				2,630				2,191				2,377				2,311				2,288				2,311
Regulatory settlement			10,277				—				—				—				—				10,277				—
Advertising			633				1,009				812				1,686				781				633				781
Foreclosed property expense			1,181				3,014				808				1,625				1,971				1,181				1,971
Telecommunications			1,295				1,322				1,267				1,323				1,314				1,295				1,314
Public relations			661				702				588				794				685				661				685
Data processing			6,391				6,092				6,156				5,898				6,002				6,391				6,002
Computer software			2,660				2,609				2,595				2,690				2,606				2,660				2,606
Amortization of intangibles			880				922				948				1,061				1,032				880				1,032
Legal			4,535				19,434				1,233				1,998				7,681				4,535				7,681
Merger expense			1				13				8				4				—				1				—
Postage and shipping			1,117				1,139				1,030				1,194				1,172				1,117				1,172
Other miscellaneous expense			13,876				15,285				12,899				13,325				16,031				13,876				16,031
Total noninterest expense		$	142,300			$	148,351			$	126,450			$	128,177			$	136,933			$	142,300			$	136,933
INSURANCE COMMISSIONS:
Property and casualty commissions		$	19,877			$	18,814			$	21,155			$	21,145			$	20,673			$	19,877			$	20,673
Life and health commissions			5,615				5,823				5,775				6,202				5,412				5,615				5,412
Risk management income			623				672				709				637				666				623				666
Other			7,134				39				945				1,335				6,742				7,134				6,742
Total insurance commissions		$	33,249			$	25,348			$	28,584			$	29,319			$	33,493			$	33,249			$	33,493

 

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BXS Announces First Quarter Results

Page 18

April 20, 2016

 

BancorpSouth, Inc.

Selected Additional Information

(Dollars in thousands)

(Unaudited)

 

		Quarter Ended
		Mar-16				Dec-15				Sep-15				Jun-15				Mar-15
MORTGAGE SERVICING RIGHTS:
Fair value, beginning of period		$	57,268			$	52,973			$	55,924			$	49,190			$	51,296
Additions to mortgage servicing rights:
Originations of servicing assets			2,612				3,065				4,231				4,344				2,499
Changes in fair value:
Due to payoffs/paydowns			(1,380	)			(1,633	)			(1,872	)			(1,930	)			(1,564	)
Due to change in valuation inputs or assumptions used in the valuation model			(7,954	)			2,865				(5,308	)			4,321				(3,039	)
Other changes in fair value			(2	)			(2	)			(2	)			(1	)			(2	)
Fair value, end of period		$	50,544			$	57,268			$	52,973			$	55,924			$	49,190
Production revenue:
Origination		$	7,208			$	4,909			$	5,154			$	7,395			$	8,914
Servicing			4,744				4,381				4,365				4,316				4,256
Payoffs/Paydowns			(1,380	)			(1,633	)			(1,872	)			(1,930	)			(1,564	)
Total production revenue			10,572				7,657				7,647				9,781				11,606
Market value adjustment			(7,954	)			2,865				(5,308	)			4,321				(3,039	)
Total mortgage lending revenue		$	2,618			$	10,522			$	2,339			$	14,102			$	8,567
Mortgage loans serviced		$	6,096,220			$	6,011,236			$	5,942,736			$	5,802,407			$	5,705,638
MSR/mtg loans serviced			0.83	%			0.95	%			0.89	%			0.96	%			0.86	%
AVAILABLE-FOR-SALE SECURITIES, at fair value
U.S. Government agencies		$	1,196,167			$	1,244,640			$	1,255,717			$	1,336,846			$	1,286,981
Government agency issued residential mortgage-back securities			189,741				140,540				206,878				217,191				200,381
Government agency issued commercial mortgage-back securities			207,908				260,693				229,922				224,450				227,409
Obligations of states and political subdivisions			408,537				417,499				451,600				458,322				471,539
Other			14,020				18,957				17,008				14,344				8,063
Total available-for-sale securities		$	2,016,373			$	2,082,329			$	2,161,125			$	2,251,153			$	2,194,373

 

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BXS Announces First Quarter Results

Page 19

April 20, 2016

 

BancorpSouth, Inc.

Reconciliation of Non-GAAP Measures and Other Ratio Definitions

(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 net operating income, net operating income-excluding MSR, tangible shareholders’ equity to tangible assets, return on tangible equity, operating return on tangible equity-excluding MSR, operating return on average assets-excluding MSR, operating return on average shareholders’ equity-excluding MSR, tangible book value per share, operating earnings per share, and operating earnings per share-excluding MSR. 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 Net Operating Income and Net Operating Income-Excluding MSR to Net Income:

 

		Quarter ended
		3/31/2016				12/31/2015				9/30/2015				6/30/2015				3/31/2015
Net income		$	22,549			$	21,169			$	34,343			$	39,713			$	32,266
Plus:  Merger expense, net of tax			1				8				5				3				—
Legal charge, net of tax			—				10,246				—				—				—
Regulatory related charges, net of tax			9,412				—				—				—				—
Less: Security gains, net of tax			2				30				20				26				10
Net operating income		$	31,960			$	31,393			$	34,328			$	39,690			$	32,256
Less: MSR market value adjustment, net of tax			(4,931	)			1,776				(3,291	)			2,679				(1,884	)
Net operating income-excluding MSR		$	36,891			$	29,617			$	37,619			$	37,011			$	34,140

 

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BXS Announces First Quarter Results

Page 20

April 20, 2016

 

BancorpSouth, Inc.

Reconciliation of Non-GAAP Measures and Other Ratio Definitions

(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
		3/31/2016				12/31/2015				9/30/2015				6/30/2015				3/31/2015
Tangible assets
Total assets		$	13,926,398			$	13,798,662			$	13,787,424			$	13,634,931			$	13,630,322
Less: Goodwill			291,498				291,498				291,498				291,498				291,498
Other identifiable intangible assets			19,664				20,545				21,466				22,415				23,476
Total tangible assets		$	13,615,236			$	13,486,619			$	13,474,460			$	13,321,018			$	13,315,348
Tangible shareholders’ equity
Total shareholders’ equity		$	1,679,793			$	1,655,444			$	1,644,820			$	1,680,196			$	1,645,208
Less: Goodwill			291,498				291,498				291,498				291,498				291,498
Other identifiable intangible assets			19,664				20,545				21,466				22,415				23,476
Total tangible shareholders’ equity		$	1,368,631			$	1,343,401			$	1,331,856			$	1,366,283			$	1,330,234
Total average assets		$	13,851,661			$	13,724,595			$	13,632,581			$	13,516,546			$	13,457,668
Total common shares outstanding			94,438,626				94,162,728				93,969,994				96,755,530				96,544,502
Average shares outstanding-diluted			94,593,540				94,384,443				96,467,728				96,957,441				96,653,401
Tangible shareholders’ equity to tangible assets (1)			10.05	%			9.96	%			9.88	%			10.26	%			9.99	%
Return on tangible equity (2)			6.63	%			6.25	%			10.23	%			11.66	%			9.84	%
Operating return on tangible equity-excluding MSR (3)			10.84	%			8.75	%			11.21	%			10.87	%			10.41	%
Operating return on average assets-excluding MSR (4)			1.07	%			0.86	%			1.09	%			1.10	%			1.03	%
Operating return on average shareholders’ equity-excluding MSR (5)			8.89	%			7.12	%			8.88	%			8.94	%			8.52	%
Tangible book value per share (6)		$	14.49			$	14.27			$	14.17			$	14.12			$	13.78
Operating earnings per share (7)		$	0.34			$	0.33			$	0.36			$	0.41			$	0.33
Operating earnings per share-excluding MSR (8)		$	0.39			$	0.31			$	0.39			$	0.39			$	0.36

 

(1)	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.

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

(3)	Operating return on tangible equity-excluding MSR is defined by the Company as annualized net operating income-excluding MSR divided by tangible shareholders’ equity.

(4)	Operating return on average assets-excluding MSR is defined by the Company as annualized net operating income-excluding MSR divided by total average assets.

(5)	Operating return on average shareholders’ equity-excluding MSR is defined by the Company as annualized net operating income-excluding MSR divided by average shareholders’ equity.

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

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

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

Efficiency Ratio (tax equivalent) and Operating Efficiency Ratio-excluding MSR (tax equivalent) Definitions

The efficiency ratio (tax equivalent) and the operating efficiency ratio-excluding MSR (tax equivalent) are supplemental financial measures utilized in management’s internal evaluation of the Company’s use of resources and are not defined under GAAP. The efficiency ratio (tax equivalent) is calculated by dividing total noninterest expense by total revenue, which includes net interest income plus noninterest income plus the tax equivalent adjustment. The operating efficiency ratio-excluding MSR (tax equivalent) excludes expense items otherwise disclosed as non-operating from total noninterest expense. In addition, the MSR valuation adjustment as well as securities gains and losses are excluded from total revenue.

 

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