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 and Annual 2016 Financial Results;

Declares Quarterly Dividend

TUPELO, MS, January 25, 2017/PRNewswire — BancorpSouth, Inc. (NYSE: BXS) today announced financial results for the quarter and year ended December 31, 2016.

Annual highlights for 2016 included:

 

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Net income of $132.7 million, or $1.41 per diluted share.

 

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Generated net loan growth of $439.2 million, or 4.2 percent.

 

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Reported total deposit growth of $357.0 million, or 3.2 percent.

 

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Reached settlement with the Consumer Financial Protection Bureau and U.S. Department of Justice regarding their joint investigation into the Company’s fair lending practices; incurred related pre-tax charge of $13.8 million.

 

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Net operating income – excluding MSR – of $141.4 million, or $1.50 per diluted share.

 

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Total operating expense declined $5.1 million compared to 2015.

 

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Repurchased 988,060 shares of outstanding common stock at a weighted average price of $23.40 per share.

Highlights for the fourth quarter of 2016 included:

 

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Net income of $37.7 million, or $0.40 per diluted share.

 

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Generated net loan growth of $153.2 million, or 5.7 percent on an annualized basis.

 

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Reported total deposit growth of $98.1 million, or 3.4 percent on an annualized basis.

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

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BXS Announces Fourth Quarter 2016 Financial Results

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January 25, 2017

 

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Earnings benefitted from a positive pre-tax mortgage servicing rights (“MSR”) valuation adjustment of $11.2 million.

 

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Net operating income – excluding MSR – of $30.7 million, or $0.33 per diluted share.

 

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

 

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Repurchased 436,541 shares of outstanding common stock at a weighted average price of $22.91 per share.

 

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Acquired certain assets of Gonzales, Louisiana based Waguespack & Associates Insurance, Inc. (“Waguespack”), which is expected to produce annual insurance commission revenues of approximately $3 million.

The Company reported net income of $37.7 million, or $0.40 per diluted share, for the fourth quarter of 2016 compared with net income of $21.2 million, or $0.22 per diluted share, for the fourth quarter of 2015 and net income of $37.8 million, or $0.40 per diluted share, for the third quarter of 2016. Additionally, the Company reported net income of $132.7 million, or $1.41 per diluted share, for the year ended December 31, 2016 compared to $127.5 million, or $1.33 per diluted share, for the year ended December 31, 2015.

The Company reported net operating income – excluding MSR – of $30.7 million, or $0.33 per diluted share, for the fourth quarter of 2016 compared to $29.6 million, or $0.31 per diluted share, for the fourth quarter of 2015 and $36.7 million, or $0.39 per diluted share, for the third quarter of 2016. Additionally, the Company reported net operating income – excluding MSR – of $141.4 million, or $1.50 per diluted share, for the year ended December 31, 2016 compared to $138.4 million, or $1.44 per diluted share, for the year ended December 31, 2015. Net operating income – excluding MSR – is a non-GAAP financial measure used by management to assess the core operating performance of the Company. This measure excludes items such as securities gains and losses, MSR valuation adjustments, restructuring charges, merger related expenses, industry related legal settlements, and other one-time charges. A full reconciliation of this measure is provided in the supplemental schedules of this news release.

At its regular quarterly meeting today, the Board of Directors of the Company declared a quarterly cash dividend of $0.125 per common share. The dividend is payable April 3, 2017 to shareholders of record at the close of business on March 15, 2017.

“Earnings for the quarter benefitted from the positive MSR valuation adjustment of $11.2 million as a result of the rising interest rate environment,” remarked Dan Rollins, BancorpSouth Chairman and Chief Executive Officer. “Otherwise, while seasonal headwinds in several of our non-interest product offerings prevented sequential quarter improvement in certain of our operating metrics, we continue to grow our Company. We reported net loan growth of $153.2 million, or 5.7 percent annualized, while total deposits grew $98.1 million, or 3.4 percent annualized. Credit quality continues to remain stable as well, reflected by our provision for credit losses for the quarter of $1.0 million. Finally, we continue to focus on controlling costs. Total operating expenses declined by over $5 million in 2016 compared to 2015.”

 

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“Additionally, we continue to look for opportunities to deploy capital in a manner that enhances shareholder value. I’m excited about the opportunity presented by our transaction with the Waguespack team as we look to continue to expand our agency footprint and grow insurance commission revenue. This team is expected to add annual revenues of approximately $3 million to our book of business. Finally, we were able to continue to execute on our share repurchase program as we repurchased 436,541 shares during the quarter at a weighted average price of $22.91 per share.”

Net Interest Revenue

Net interest revenue was $115.4 million for the fourth quarter of 2016, an increase of 3.7 percent from $111.2 million for the fourth quarter of 2015 and an increase of 0.7 percent from $114.6 million for the third quarter of 2016. The fully taxable equivalent net interest margin was 3.46 percent for the fourth quarter of 2016 compared to 3.58 percent for the fourth quarter of 2015 and 3.51 percent for the third quarter of 2016. Yields on loans and leases were 4.18 percent for the fourth quarter of 2016 compared with 4.15 percent for the fourth quarter of 2015 and 4.20 percent for the third quarter of 2016, while yields on total interest earning assets were 3.70 percent for the fourth quarter of 2016 compared with 3.79 percent for the fourth quarter of 2015 and 3.74 percent for the third quarter of 2016. The average cost of deposits was 0.23 percent for the fourth quarter of 2016 compared to 0.21 percent for the fourth quarter of 2015 and 0.22 percent for the third quarter of 2016.

Asset, Deposit and Loan Activity

Total assets were $14.7 billion at December 31, 2016 compared with $13.8 billion at December 31, 2015. Loans and leases, net of unearned income, were $10.8 billion at December 31, 2016 compared with $10.4 billion at December 31, 2015.

Total deposits were $11.7 billion at December 31, 2016 compared with $11.3 billion at December 31, 2015. Time deposits decreased $12.2 million, or 0.7 percent, at December 31, 2016 compared to December 31, 2015. Over the same time period, interest bearing demand deposits increased $30.7 million, or 0.6 percent while noninterest bearing demand deposits increased $219.0 million, or 7.2 percent, and savings deposits increased $119.5 million, or 8.3 percent.

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 no recorded provision for the fourth quarter of 2015 and no recorded provision for the third quarter of 2016. Total non-performing assets (“NPAs”) were $109.7 million, or 1.01 percent of net loans and leases, at December 31, 2016 compared with $109.7 million, or 1.06 percent of net loans and leases, at December 31, 2015, and $102.3 million, or 0.96 percent of net loans and leases, at September 30, 2016.

 

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BXS Announces Fourth Quarter 2016 Financial Results

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Net charge-offs for the fourth quarter of 2016 were $3.2 million, compared with net charge-offs of $6.6 million for the fourth quarter of 2015 and net charge-offs of $1.0 million for the third quarter of 2016. Gross charge-offs were $5.7 million for the fourth quarter of 2016, compared with $9.5 million for the fourth quarter of 2015 and $3.8 million for the third quarter of 2016. Gross recoveries of previously charged-off loans were $2.5 million for the fourth quarter of 2016, compared with $3.0 million for the fourth quarter of 2015 and $2.7 million for the third quarter of 2016. Annualized net charge-offs were 0.12 percent of average loans and leases for the fourth quarter of 2016, compared with annualized net charge-offs of 0.25 percent for the fourth quarter of 2015 and annualized net charge-offs of 0.04 percent for the third quarter of 2016.

Non-performing loans (“NPLs”) were $101.8 million, or 0.94 percent of net loans and leases, at December 31, 2016, compared with $94.9 million, or 0.92 percent of net loans and leases, at December 31, 2015, and $90.9 million, or 0.85 percent of net loans and leases, at September 30, 2016. The allowance for credit losses was $123.7 million, or 1.14 percent of net loans and leases, at December 31, 2016, compared with $126.5 million, or 1.22 percent of net loans and leases, at December 31, 2015 and $125.9 million, or 1.18 percent of net loans and leases, at September 30, 2016.

NPLs at December 31, 2016 consisted primarily of $71.8 million of nonaccrual loans, compared with $70.7 million of nonaccrual loans at September 30, 2016. NPLs at December 31, 2016 also included $4.0 million of loans 90 days or more past due and still accruing, compared with $2.3 million of such loans at September 30, 2016, and included restructured loans still accruing of $26.0 million at December 31, 2016, compared with $17.9 million of such loans at September 30, 2016. Early stage past due loans, representing loans 30-89 days past due, totaled $27.8 million at December 31, 2016 compared to $46.7 million at September 30, 2016. Other real estate owned decreased $3.6 million to $7.8 million during the fourth quarter of 2016 from $11.4 million at September 30, 2016.

Noninterest Revenue

Noninterest revenue was $73.0 million for the fourth quarter of 2016, compared with $67.4 million for the fourth quarter of 2015 and $70.9 million for the third quarter of 2016. These results included a positive MSR valuation adjustment of $11.2 million for the fourth quarter of 2016 compared with a positive MSR valuation adjustment of $2.9 million for the fourth quarter of 2015 and a positive MSR valuation adjustment of $1.8 million for the third quarter of 2016. Valuation adjustments in the MSR asset are driven primarily by fluctuations in interest rates period over period.

Excluding the MSR valuation adjustments, mortgage banking revenue was $6.6 million for the fourth quarter of 2016, compared with $7.7 million for the fourth quarter of 2015 and $10.5 million for the third quarter of 2016. Mortgage origination volume for the fourth quarter of 2016 was $395.9 million, compared with $310.0 million for the fourth quarter of 2015 and $478.2 million for the third quarter of 2016.

 

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BXS Announces Fourth Quarter 2016 Financial Results

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Credit and debit card fee revenue was $9.3 million for the fourth quarter of 2016, compared with $9.4 million for the fourth quarter of 2015 and $9.3 million for the third quarter of 2016. Deposit service charge revenue was $10.0 million for the fourth quarter of 2016, compared with $11.8 million for the fourth quarter of 2015 and $11.3 million for the third quarter of 2016. Insurance commission revenue was $25.7 million for the fourth quarter of 2016, compared with $25.3 million for the fourth quarter of 2015 and $28.2 million for the third quarter of 2016. Wealth management revenue was $5.4 million for the fourth quarter of 2016, compared with $5.4 million for the fourth quarter of 2015 and $5.3 million for the third quarter of 2016.

Noninterest Expense

Noninterest expense for the fourth quarter of 2016 was $131.5 million, compared with $148.4 million for the fourth quarter of 2015 and $129.5 million for the third quarter of 2016. Noninterest expense for the fourth quarter of 2015 included a charge of $16.5 million related to the settlement of a 2010 class action lawsuit related to overdraft fees. Salaries and employee benefits expense was $81.8 million for the fourth quarter of 2016 compared to $80.2 million for the fourth quarter of 2015 and $82.1 million for the third quarter of 2016. Occupancy expense was $10.3 million for the fourth quarter of 2016, compared with $10.4 million for the fourth quarter of 2015 and $10.4 million for the third quarter of 2016. Other noninterest expense was $34.0 million for the fourth quarter of 2016, compared to $51.5 million for the fourth quarter of 2015 and $30.4 million for the third quarter of 2016.

Capital Management

The Company’s equity capitalization is comprised entirely of common stock. BancorpSouth’s ratio of shareholders’ equity to assets was 11.71 percent at December 31, 2016, compared with 12.00 percent at December 31, 2015 and 11.80 percent at September 30, 2016. The ratio of tangible shareholders’ equity to tangible assets was 9.73 percent at December 31, 2016, compared with 9.96 percent at December 31, 2015 and 9.86 percent at September 30, 2016.

On December 15, 2016, the Company redeemed $10.3 million in Junior Subordinated Debt Securities issued to City Bancorp Preferred Trust I. Subsequent to year-end, on January 9, 2017, the Company redeemed $6.7 million in Junior Subordinated Debt Securities issued to American State Capital Trust I and $6.2 million in Junior Subordinated Debt Securities issued to Business Holding Company Trust I. Each of these Junior Subordinated Debt Securities was assumed by the Company pursuant to various prior mergers.

Estimated regulatory capital ratios at December 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 December 31, 2016 and total risk based capital of 13.38 percent, compared with required minimum levels of 8 percent and 10 percent, respectively, in order to qualify for “well capitalized” classification.

 

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Transactions

On December 19, 2016, BancorpSouth Insurance Services, Inc. announced and closed the acquisition of certain assets of Gonzales, Louisiana based Waguespack & Associates Insurance, Inc. The agency was formed in 1986 and is expected to produce annual revenues of approximately $3 million. Waguespack will continue to operate under current leadership in its current location in Gonzales.

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 agreed to 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, 2016, Central Community Corporation, on a consolidated basis, reported total assets of $1.4 billion, total loans of $647.6 million and total deposits of $1.1 billion. Under the terms of the definitive agreement, the Company will issue approximately 7,250,000 shares of the Company’s common stock plus $28.5 million in cash for all outstanding shares of Central Community Corporation’s capital stock, subject to certain conditions and potential adjustments. The 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. The Company and Central Community Corporation entered into an extension of the merger effective on October 13, 2016, extending the merger agreement through December 31, 2017 to allow for additional time to obtain the necessary regulatory approvals and to satisfy all closing conditions. The merger agreement remains in effect until terminated by the Board of Directors of the Company or Central Community Corporation. The terms of the 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.

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. agreed to 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, 2016, OIB, on a consolidated basis, reported total assets of $671.5 million, total loans of $494.8 million and total deposits of $567.2 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 Ouachita Bancshares Corp. shareholders on April 8, 2014. The Company and Ouachita Bancshares Corp. entered into an extension of the merger effective on October 13, 2016, extending the merger agreement through December 31, 2017 to allow for additional time to obtain the necessary regulatory approvals and to satisfy all closing conditions. The merger

 

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agreement remains in effect until terminated by the Board of Directors of the Company or Ouachita Bancshares Corp. The terms of the 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.

For the most recent information regarding the status of the merger with Central Community Corporation and the status of the merger with Ouachita Bancshares Corp. in our periodic and current reports, please refer to the Form 8-K that was previously filed with the SEC on October 14, 2016.

Summary

Rollins concluded, “I believe our annual results for 2016 reflect our simple strategy of continuing to grow our Company while challenging expenses. We reported total loan growth for the year of over $435 million and total deposit growth of over $355 million. This growth, combined with a relatively stable net interest margin, resulted in annual growth in net interest income of $17.8 million, or 4.1 percent. Our mortgage team originated $1.7 billion in mortgage loans for the year and reported mortgage banking revenue growth, excluding MSR, of $4.0 million, or 11.0 percent. Our insurance team was able to grow their customer base and hold total commission revenue essentially flat, despite continued pricing pressure on premiums across the industry. Finally, we continue to improve our cost structure. Our operating efficiency ratio – excluding MSR – declined from 72.14 percent in 2015 to 69.92 percent for 2016. As we move into 2017, I’m confident this simple approach will allow us to continue improving our operating performance.”

Conference Call

BancorpSouth will conduct a conference call to discuss its fourth quarter 2016 results on January 26, 2017, at 10:00 a.m. (Central Time). Investors may listen via the Internet by accessing BancorpSouth’s website at www.bancorpsouth.com and accessing the “Investor Relations” webpage. 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. (NYSE: BXS) is a financial holding company headquartered in Tupelo, Mississippi, with $14.7 billion in assets. BancorpSouth Bank, a wholly-owned subsidiary of BancorpSouth, Inc., operates 234 full service branch locations as well as additional mortgage, insurance, and loan production offices in Alabama, Arkansas, Florida, Louisiana, Mississippi, Missouri, Tennessee and Texas, including an insurance location in Illinois. BancorpSouth is committed to a culture of respect, diversity, and inclusion in both its workplace and communities. To learn more, visit our Community Commitment page at www.bancorpsouth.com. Like us on Facebook; follow us on Twitter: @MyBXS; or connect with us through LinkedIn.

 

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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 Bank Secrecy Act (“BSA”) and anti-money laundering (“AML”) compliance program and its fair lending compliance program, the Company’s compliance with the consent order it entered into with the Consumer Financial Protection Bureau (the “CFPB”) and the United States Department of Justice (“DOJ”) related to the Company’s fair lending practices (the “Consent Order”), 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, credit quality, credit losses, liquidity, off-balance sheet commitments and arrangements, valuation of mortgage servicing rights, allowance and provision for credit losses, 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, diversification of the Company’s revenue stream, the growth of the Company’s insurance business and commission revenue, the growth of the Company’s loan, deposit and fee revenue sources, liquidity needs and strategies, sources of funding, net interest margin, declaration and payment of dividends, the utilization of the Company’s share repurchase program, the implementation and execution of 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 and its fair lending compliance program, the Company’s ability to successfully implement and comply with the Consent Order, the ability of the Company, Ouachita Bancshares Corp. and Central Community Corporation to obtain regulatory approval of and close the proposed mergers, the willingness of Ouachita Bancshares Corp. and Central Community Corporation to proceed with 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, 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 growth of the Company’s insurance business and commission revenue, the growth of the Company’s loan, deposit and fee revenue sources, 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, the utilization of the Company’s share repurchase program, the implementation and execution of cost saving initiatives, 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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BancorpSouth, Inc.

Selected Financial Information

(Dollars in thousands, except per share data)

(Unaudited)

 

		Quarter Ended 12/31/2016				Quarter Ended 9/30/2016				Quarter Ended 6/30/2016				Quarter Ended 3/31/2016				Quarter Ended 12/31/2015				Year Ended 12/31/2016				Year Ended 12/31/2015
Earnings Summary:
Interest revenue		$	123,444			$	122,340			$	119,423			$	117,972			$	118,050			$	483,179			$	464,378
Interest expense			8,057				7,750				7,107				6,813				6,820				29,727				28,696
Net interest revenue			115,387				114,590				112,316				111,159				111,230				453,452				435,682
Provision for credit losses			1,000				—				2,000				1,000				—				4,000				(13,000	)
Net interest revenue, after provision for credit losses			114,387				114,590				110,316				110,159				111,230				449,452				448,682
Noninterest revenue			72,964				70,868				69,683				65,515				67,386				279,030				277,968
Noninterest expense			131,508				129,512				128,718				142,300				148,351				532,038				539,911
Income before income taxes			55,843				55,946				51,281				33,374				30,265				196,444				186,739
Income tax expense			18,173				18,129				16,589				10,825				9,096				63,716				59,248
Net income		$	37,670			$	37,817			$	34,692			$	22,549			$	21,169			$	132,728			$	127,491
Balance Sheet - Period End Balances
Total assets		$	14,724,388			$	14,611,483			$	14,137,160			$	13,926,398			$	13,798,662			$	14,724,388			$	13,798,662
Total earning assets			13,549,407				13,483,345				12,977,030				12,760,031				12,656,791				13,549,407				12,656,791
Total securities			2,531,676				2,468,199				2,103,883				2,016,373				2,082,329				2,531,676				2,082,329
Loans and leases, net of unearned income			10,811,991				10,658,761				10,575,978				10,444,697				10,372,778				10,811,991				10,372,778
Allowance for credit losses			123,736				125,887				126,935				126,506				126,458				123,736				126,458
Total deposits			11,688,141				11,590,059				11,364,367				11,486,697				11,331,161				11,688,141				11,331,161
Long-term debt			530,000				563,495				365,588				67,681				69,775				530,000				69,775
Total shareholders’ equity			1,723,883				1,724,104				1,713,043				1,679,793				1,655,444				1,723,883				1,655,444
Balance Sheet - Average Balances
Total assets		$	14,655,360			$	14,366,759			$	14,027,786			$	13,851,661			$	13,724,595			$	14,226,953			$	13,583,715
Total earning assets			13,525,284				13,265,266				12,963,056				12,830,000				12,628,685				13,147,264				12,505,670
Total securities			2,479,008				2,186,889				2,069,058				2,037,739				2,110,195				2,193,937				2,180,117
Loans and leases, net of unearned income			10,737,802				10,601,481				10,513,732				10,372,925				10,321,299				10,557,103				9,995,005
Total deposits			11,700,213				11,509,764				11,437,422				11,431,480				11,182,750				11,520,186				11,149,567
Long-term debt			534,141				430,886				219,434				67,750				69,775				313,979				72,900
Total shareholders’ equity			1,724,871				1,719,503				1,690,906				1,668,465				1,650,924				1,701,052				1,654,028
Nonperforming Assets:
Non-accrual loans and leases		$	71,812			$	70,725			$	68,638			$	81,926			$	83,028			$	71,812			$	83,028
Loans and leases 90+ days past due, still accruing			3,983				2,255				1,875				4,567				2,013				3,983				2,013
Restructured loans and leases, still accruing			26,047				17,936				9,687				7,753				9,876				26,047				9,876
Non-performing loans (NPLs)			101,842				90,916				80,200				94,246				94,917				101,842				94,917
Other real estate owned			7,810				11,391				14,658				12,685				14,759				7,810				14,759
Non-performing assets (NPAs)		$	109,652			$	102,307			$	94,858			$	106,931			$	109,676			$	109,652			$	109,676
Financial Ratios and Other Data:
Return on average assets			1.02	%			1.05	%			0.99	%			0.65	%			0.61	%			0.93	%			0.94	%
Operating return on average assets-excluding MSR*			0.83	%			1.02	%			1.07	%			1.07	%			0.86	%			0.99	%			1.02	%
Return on average shareholders’ equity			8.69	%			8.75	%			8.25	%			5.44	%			5.09	%			7.80	%			7.71	%
Operating return on average shareholders’ equity-excluding MSR*			7.08	%			8.49	%			8.84	%			8.89	%			7.12	%			8.31	%			8.37	%
Return on tangible equity*			10.70	%			10.68	%			9.99	%			6.63	%			6.25	%			9.47	%			9.50	%
Operating return on tangible equity-excluding MSR*			8.71	%			10.36	%			10.70	%			10.84	%			8.75	%			10.09	%			10.30	%
Noninterest income to average assets			1.98	%			1.96	%			2.00	%			1.90	%			1.95	%			1.96	%			2.05	%
Noninterest expense to average assets			3.57	%			3.59	%			3.69	%			4.13	%			4.29	%			3.74	%			3.97	%
Net interest margin-fully taxable equivalent			3.46	%			3.51	%			3.56	%			3.56	%			3.58	%			3.52	%			3.57	%
Net interest rate spread			3.36	%			3.41	%			3.47	%			3.47	%			3.48	%			3.42	%			3.47	%
Efficiency ratio (tax equivalent)*			68.95	%			68.92	%			69.77	%			79.39	%			81.86	%			71.67	%			74.53	%
Operating efficiency ratio-excluding MSR (tax equivalent)*			73.29	%			69.59	%			68.21	%			68.66	%			73.89	%			69.92	%			72.14	%
Loan/deposit ratio			92.50	%			91.96	%			93.06	%			90.93	%			91.54	%			92.50	%			91.54	%
Price to earnings multiple (avg)			22.02				18.86				19.07				17.33				18.17				22.02				18.17
Market value to book value			168.76	%			126.59	%			125.23	%			119.81	%			136.46	%			168.76	%			136.46	%
Market value to book value (avg)			145.61	%			129.73	%			124.62	%			116.78	%			142.53	%			127.73	%			136.87	%
Market value to tangible book value			207.63	%			154.87	%			153.53	%			147.04	%			168.15	%			207.63	%			168.15	%
Market value to tangible book value (avg)			179.14	%			158.71	%			152.78	%			143.33	%			175.64	%			157.14	%			168.67	%
Headcount FTE			3,998				3,981				4,028				3,966				3,970				3,998				3,970

 

*	Denotes non-GAAP financial measure. Refer to related disclosure and reconciliation on pages 20 and 21.

 

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BXS Announces Fourth Quarter 2016 Financial Results

Page 10

January 25, 2017

 

BancorpSouth, Inc.

Selected Financial Information

(Dollars in thousands, except per share data)

(Unaudited)

 

		Quarter Ended 12/31/2016				Quarter Ended 9/30/2016				Quarter Ended 6/30/2016				Quarter Ended 3/31/2016				Quarter Ended 12/31/2015				Year Ended 12/31/2016				Year Ended 12/31/2015
Credit Quality Ratios:
Net charge-offs to average loans and leases (annualized)			0.12	%			0.04	%			0.06	%			0.04	%			0.25	%			0.06	%			0.03	%
Provision for credit losses to average loans and leases (annualized)			0.04	%			0.00	%			0.08	%			0.04	%			0.00	%			0.04	%			(0.13	%)
Allowance for credit losses to net loans and leases			1.14	%			1.18	%			1.20	%			1.21	%			1.22	%			1.14	%			1.22	%
Allowance for credit losses to non-performing loans and leases			121.50	%			138.47	%			158.27	%			134.23	%			133.23	%			121.50	%			133.23	%
Allowance for credit losses to non-performing assets			112.84	%			123.05	%			133.82	%			118.31	%			115.30	%			112.84	%			115.30	%
Non-performing loans and leases to net loans and leases			0.94	%			0.85	%			0.76	%			0.90	%			0.92	%			0.94	%			0.92	%
Non-performing assets to net loans and leases			1.01	%			0.96	%			0.90	%			1.02	%			1.06	%			1.01	%			1.06	%
Equity Ratios:
Total shareholders’ equity to total assets			11.71	%			11.80	%			12.12	%			12.06	%			12.00	%			11.71	%			12.00	%
Tangible shareholders’ equity to tangible assets*			9.73	%			9.86	%			10.11	%			10.05	%			9.96	%			9.73	%			9.96	%
Capital Adequacy:
Common Equity Tier 1 capital			12.23	%			12.13	%			12.17	%			12.14	%			12.07	%			12.23	%			12.07	%
Tier 1 capital			12.34	%			12.32	%			12.37	%			12.34	%			12.27	%			12.34	%			12.27	%
Total capital			13.38	%			13.37	%			13.45	%			13.43	%			13.37	%			13.38	%			13.37	%
Tier 1 leverage capital			10.32	%			10.53	%			10.66	%			10.61	%			10.61	%			10.32	%			10.61	%
Estimated for current quarter
Common Share Data:
Basic earnings per share		$	0.40			$	0.40			$	0.37			$	0.24			$	0.22			$	1.41			$	1.33
Diluted earnings per share			0.40				0.40				0.37				0.24				0.22				1.41				1.33
Operating earnings per share*			0.40				0.40				0.37				0.34				0.33				1.51				1.44
Operating earnings per share- excluding MSR*			0.33				0.39				0.39				0.39				0.31				1.50				1.44
Cash dividends per share			0.13				0.13				0.10				0.10				0.10				0.45				0.35
Book value per share			18.40				18.33				18.12				17.79				17.58				18.40				17.58
Tangible book value per share*			14.95				14.98				14.78				14.49				14.27				14.95				14.27
Market value per share (last)			31.05				23.20				22.69				21.31				23.99				31.05				23.99
Market value per share (high)			31.75				25.09				24.18				23.64				27.23				31.75				27.23
Market value per share (low)			22.23				20.98				20.19				18.69				22.44				18.69				19.64
Market value per share (avg)			26.79				23.78				22.58				20.77				25.06				23.50				24.06
Dividend payout ratio			31.11	%			31.17	%			22.58	%			41.85	%			44.46	%			31.94	%			26.31	%
Total shares outstanding			93,696,687				94,074,740				94,546,091				94,438,626				94,162,728				93,696,687				94,162,728
Average shares outstanding - basic			93,740,626				94,303,916				94,461,025				94,369,211				94,111,408				94,218,694				95,824,989
Average shares outstanding - diluted			93,966,392				94,563,833				94,694,795				94,593,540				94,384,443				94,454,640				96,123,847
Yield/Rate:
(Taxable equivalent basis)
Loans, loans held for sale, and leases net of unearned income			4.18	%			4.20	%			4.20	%			4.21	%			4.15	%			4.20	%			4.23	%
Available-for-sale securities:
Taxable			1.31	%			1.33	%			1.40	%			1.40	%			1.48	%			1.36	%			1.46	%
Tax-exempt			5.29	%			5.32	%			5.36	%			5.36	%			5.32	%			5.33	%			5.37	%
Short-term investments			0.41	%			0.52	%			0.39	%			0.33	%			0.22	%			0.42	%			0.23	%
Total interest earning assets and revenue			3.70	%			3.74	%			3.78	%			3.78	%			3.79	%			3.75	%			3.80	%
Deposits			0.23	%			0.22	%			0.21	%			0.21	%			0.21	%			0.22	%			0.23	%
Demand - interest bearing			0.20	%			0.19	%			0.18	%			0.17	%			0.18	%			0.19	%			0.18	%
Savings			0.12	%			0.12	%			0.12	%			0.12	%			0.12	%			0.12	%			0.12	%
Other time			0.79	%			0.78	%			0.75	%			0.73	%			0.71	%			0.76	%			0.77	%
Short-term borrowings			0.16	%			0.15	%			0.15	%			0.14	%			0.12	%			0.15	%			0.12	%
Total interest bearing deposits & short-term borrowings			0.31	%			0.30	%			0.29	%			0.28	%			0.28	%			0.29	%			0.30	%
Junior subordinated debt			3.53	%			3.27	%			3.23	%			3.18	%			2.93	%			3.30	%			2.87	%
Long-term debt			0.73	%			0.83	%			1.21	%			3.08	%			2.95	%			0.98	%			2.91	%
Total interest bearing liabilities and expense			0.34	%			0.34	%			0.32	%			0.31	%			0.31	%			0.33	%			0.33	%
Interest bearing liabilities to interest earning assets			69.43	%			69.33	%			69.47	%			69.75	%			69.23	%			69.49	%			70.09	%
Net interest tax equivalent adjustment		$	2,371			$	2,462			$	2,493			$	2,558			$	2,601			$	9,884			$	10,789

 

*	Denotes non-GAAP financial measure. Refer to related disclosure and reconciliation on pages 20 and 21.

 

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BXS Announces Fourth Quarter 2016 Financial Results

Page 11

January 25, 2017

 

BancorpSouth, Inc.

Consolidated Balance Sheets

(Unaudited)

 

		Dec-16				Sep-16				Jun-16				Mar-16				Dec-15
		(Dollars in thousands)
Assets
Cash and due from banks		$	184,152			$	172,782			$	186,381			$	197,538			$	154,192
Interest bearing deposits with other banks			38,813				151,944				86,472				148,915				43,777
Available-for-sale securities, at fair value			2,531,676				2,468,199				2,103,883				2,016,373				2,082,329
Loans and leases			10,835,512				10,685,166				10,604,547				10,475,528				10,404,326
Less: Unearned income			23,521				26,405				28,569				30,831				31,548
Allowance for credit losses			123,736				125,887				126,935				126,506				126,458
Net loans and leases			10,688,255				10,532,874				10,449,043				10,318,191				10,246,320
Loans held for sale			166,927				204,441				210,698				150,046				157,907
Premises and equipment, net			305,561				305,245				305,694				306,765				308,125
Accrued interest receivable			42,005				41,583				39,645				41,401				40,901
Goodwill			300,798				294,901				294,901				291,498				291,498
Other identifiable intangibles			21,894				19,908				20,831				19,664				20,545
Bank owned life insurance			258,648				257,015				255,240				253,427				251,534
Other real estate owned			7,810				11,391				14,658				12,685				14,759
Other assets			177,849				151,200				169,714				169,895				186,775
Total Assets		$	14,724,388			$	14,611,483			$	14,137,160			$	13,926,398			$	13,798,662
Liabilities
Deposits:
Demand: Noninterest bearing		$	3,250,537			$	3,308,361			$	3,133,460			$	3,103,321			$	3,031,528
Interest bearing			5,034,470				4,877,482				4,838,704				5,033,565				5,003,806
Savings			1,561,819				1,533,401				1,512,694				1,506,942				1,442,336
Other time			1,841,315				1,870,815				1,879,509				1,842,869				1,853,491
Total deposits			11,688,141				11,590,059				11,364,367				11,486,697				11,331,161
Securities sold under agreement to repurchase			454,002				468,969				415,949				431,089				405,937
Federal funds purchased and other short-term borrowing			92,000				—				—				—				62,000
Accrued interest payable			3,975				4,107				3,727				3,305				3,071
Junior subordinated debt securities			12,888				23,198				23,198				23,198				23,198
Long-term debt			530,000				563,495				365,588				67,681				69,775
Other liabilities			219,499				237,551				251,288				234,635				248,076
Total Liabilities			13,000,505				12,887,379				12,424,117				12,246,605				12,143,218
Shareholders’ Equity
Common stock			234,242				235,187				236,365				236,097				235,407
Capital surplus			271,292				278,973				286,994				283,800				282,934
Accumulated other comprehensive loss			(50,937	)			(33,549	)			(27,587	)			(32,144	)			(41,825	)
Retained earnings			1,269,286				1,243,493				1,217,271				1,192,040				1,178,928
Total Shareholders’ Equity			1,723,883				1,724,104				1,713,043				1,679,793				1,655,444
Total Liabilities & Shareholders’ Equity		$	14,724,388			$	14,611,483			$	14,137,160			$	13,926,398			$	13,798,662

 

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BXS Announces Fourth Quarter 2016 Financial Results

Page 12

January 25, 2017

 

BancorpSouth, Inc.

Consolidated Average Balance Sheets

(Unaudited)

 

		Dec-16				Sep-16				Jun-16				Mar-16				Dec-15
		(Dollars in thousands)
Assets
Cash and due from banks		$	171,791			$	157,233			$	117,193			$	71,528			$	159,696
Interest bearing deposits with other banks			165,805				311,545				237,635				316,108				69,552
Available-for-sale securities, at fair value			2,479,008				2,186,889				2,069,058				2,037,739				2,110,195
Loans and leases			10,763,314				10,629,522				10,543,795				10,405,063				10,353,913
Less: Unearned income			25,512				28,041				30,063				32,138				32,614
Allowance for credit losses			125,526				126,820				126,103				126,567				132,375
Net loans and leases			10,612,276				10,474,661				10,387,629				10,246,358				10,188,924
Loans held for sale			142,669				165,351				142,632				103,227				127,638
Premises and equipment, net			305,994				305,707				307,600				308,065				306,881
Accrued interest receivable			38,648				38,125				36,887				38,306				38,142
Goodwill			296,888				294,901				292,620				291,498				291,498
Other identifiable intangibles			20,303				20,248				19,796				19,987				20,880
Bank owned life insurance			257,397				255,967				254,191				252,422				250,577
Other real estate owned			9,084				13,664				15,666				14,523				21,049
Other assets			155,497				142,468				146,879				151,900				139,563
Total Assets		$	14,655,360			$	14,366,759			$	14,027,786			$	13,851,661			$	13,724,595
Liabilities
Deposits:
Demand: Noninterest bearing		$	3,344,632			$	3,221,539			$	3,122,153			$	3,014,896			$	3,106,947
Interest bearing			4,951,906				4,886,920				4,957,827				5,102,648				4,782,234
Savings			1,543,542				1,525,016				1,510,250				1,468,262				1,421,361
Other time			1,860,133				1,876,289				1,847,192				1,845,674				1,872,208
Total deposits			11,700,213				11,509,764				11,437,422				11,431,480				11,182,750
Securities sold under agreement to repurchase			475,669				454,826				443,340				431,260				466,865
Federal funds purchased and other short-term borrowing			3,924				11				4,275				10,484				107,408
Accrued interest payable			4,031				3,950				3,509				3,248				3,340
Junior subordinated debt securities			21,181				23,198				23,198				23,198				23,198
Long-term debt			534,141				430,886				219,434				67,750				69,775
Other liabilities			191,330				224,621				205,702				215,776				220,335
Total Liabilities			12,930,489				12,647,256				12,336,880				12,183,196				12,073,671
Shareholders’ Equity
Common stock			234,323				235,860				236,176				235,946				235,227
Capital surplus			271,900				283,437				284,818				282,796				282,076
Accumulated other comprehensive loss			(40,454	)			(29,743	)			(32,820	)			(36,184	)			(38,618	)
Retained earnings			1,259,102				1,229,949				1,202,732				1,185,907				1,172,239
Total Shareholders’ Equity			1,724,871				1,719,503				1,690,906				1,668,465				1,650,924
Total Liabilities & Shareholders’ Equity		$	14,655,360			$	14,366,759			$	14,027,786			$	13,851,661			$	13,724,595

 

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BXS Announces Fourth Quarter 2016 Financial Results

Page 13

January 25, 2017

 

BancorpSouth, Inc.

Consolidated Condensed Statements of Income

(Dollars in thousands, except per share data)

(Unaudited)

 

		Quarter Ended																				Year Ended
		Dec-16				Sep-16				Jun-16				Mar-16				Dec-15				Dec-16				Dec-15
INTEREST REVENUE:
Loans and leases		$	112,189			$	111,605			$	109,078			$	107,805			$	107,164			$	440,677			$	419,813
Deposits with other banks			169				409				229				263				40				1,070				438
Available-for-sale securities:
Taxable			7,105				6,189				6,009				5,888				6,550				25,191				26,308
Tax-exempt			2,771				2,898				2,924				3,032				3,137				11,625				13,075
Loans held for sale			1,210				1,239				1,183				984				1,159				4,616				4,744
Total interest revenue			123,444				122,340				119,423				117,972				118,050				483,179				464,378
INTEREST EXPENSE:
Interest bearing demand			2,514				2,361				2,208				2,163				2,166				9,246				8,820
Savings			470				462				451				443				434				1,826				1,703
Other time			3,711				3,661				3,436				3,354				3,356				14,162				14,837
Federal funds purchased and securities sold under agreement to repurchase			190				173				159				140				112				662				383
Long-term debt			985				902				665				530				581				3,082				2,285
Junior subordinated debt			187				190				187				183				171				747				667
Other			—				1				1				—				—				2				1
Total interest expense			8,057				7,750				7,107				6,813				6,820				29,727				28,696
Net interest revenue			115,387				114,590				112,316				111,159				111,230				453,452				435,682
Provision for credit losses			1,000				—				2,000				1,000				—				4,000				(13,000	)
Net interest revenue, after provision for credit losses			114,387				114,590				110,316				110,159				111,230				449,452				448,682
NONINTEREST REVENUE:
Mortgage banking			17,792				12,282				9,043				2,618				10,522				41,735				35,530
Credit card, debit card and merchant fees			9,262				9,292				9,495				8,961				9,414				37,010				36,533
Deposit service charges			9,956				11,313				11,018				11,014				11,836				43,301				46,765
Security gains, net			39				1				86				2				48				128				136
Insurance commissions			25,709				28,194				28,803				33,249				25,348				115,955				116,744
Wealth Management			5,401				5,312				5,347				5,109				5,375				21,169				22,660
Other			4,805				4,474				5,891				4,562				4,843				19,732				19,600
Total noninterest revenue			72,964				70,868				69,683				65,515				67,386				279,030				277,968
NONINTEREST EXPENSE:
Salaries and employee benefits			81,839				82,079				81,832				82,467				80,177				328,217				322,469
Occupancy, net of rental income			10,294				10,412				10,109				10,273				10,434				41,088				41,866
Equipment			3,563				3,423				3,295				3,765				3,569				14,046				15,309
Deposit insurance assessments			1,818				3,227				2,582				2,288				2,630				9,915				9,509
Regulatory settlement			—				—				—				10,277				—				10,277				—
Other			33,994				30,371				30,900				33,230				51,541				128,495				150,758
Total noninterest expense			131,508				129,512				128,718				142,300				148,351				532,038				539,911
Income before income taxes			55,843				55,946				51,281				33,374				30,265				196,444				186,739
Income tax expense			18,173				18,129				16,589				10,825				9,096				63,716				59,248
Net income		$	37,670			$	37,817			$	34,692			$	22,549			$	21,169			$	132,728			$	127,491
Net income per share: Basic		$	0.40			$	0.40			$	0.37			$	0.24			$	0.22			$	1.41			$	1.33
Diluted		$	0.40			$	0.40			$	0.37			$	0.24			$	0.22			$	1.41			$	1.33

 

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BXS Announces Fourth Quarter 2016 Financial Results

Page 14

January 25, 2017

 

BancorpSouth, Inc.

Selected Loan Data

(Dollars in thousands)

(Unaudited)

 

		Quarter Ended
		Dec-16				Sep-16				Jun-16				Mar-16				Dec-15
LOAN AND LEASE PORTFOLIO:
Commercial and industrial		$	1,612,295			$	1,616,152			$	1,698,089			$	1,716,477			$	1,747,774
Real estate
Consumer mortgages			2,643,966				2,611,387				2,549,989				2,480,828				2,472,202
Home equity			628,846				622,566				614,686				605,228				589,752
Agricultural			245,377				242,171				251,566				239,422				259,360
Commercial and industrial-owner occupied			1,764,265				1,668,477				1,644,618				1,654,577				1,617,429
Construction, acquisition and development			1,157,248				1,121,386				1,021,218				966,362				945,045
Commercial real estate			2,237,719				2,240,717				2,254,653				2,233,742				2,188,048
Credit cards			109,656				107,447				108,101				106,714				112,165
All other			412,619				428,458				433,058				441,347				441,003
Total loans		$	10,811,991			$	10,658,761			$	10,575,978			$	10,444,697			$	10,372,778
ALLOWANCE FOR CREDIT LOSSES:
Balance, beginning of period		$	125,887			$	126,935			$	126,506			$	126,458			$	133,009
Loans and leases charged-off:
Commercial and industrial			(2,483	)			(1,180	)			(748	)			(140	)			(6,193	)
Real estate
Consumer mortgages			(905	)			(595	)			(477	)			(710	)			(1,146	)
Home equity			(873	)			(237	)			(224	)			(550	)			(147	)
Agricultural			—				(89	)			(10	)			(11	)			(16	)
Commercial and industrial-owner occupied			(20	)			(261	)			(660	)			(154	)			(357	)
Construction, acquisition and development			(10	)			(5	)			(280	)			(226	)			(221	)
Commercial real estate			—				(14	)			(870	)			(245	)			(122	)
Credit cards			(815	)			(696	)			(614	)			(720	)			(723	)
All other			(580	)			(713	)			(417	)			(487	)			(623	)
Total loans charged-off			(5,686	)			(3,790	)			(4,300	)			(3,243	)			(9,548	)
Recoveries:
Commercial and industrial			1,019				263				339				212				354
Real estate
Consumer mortgages			413				327				499				455				596
Home equity			71				109				246				80				123
Agricultural			15				28				96				36				20
Commercial and industrial-owner occupied			201				117				101				125				307
Construction, acquisition and development			195				382				524				272				1,061
Commercial real estate			176				1,043				509				683				149
Credit cards			208				262				199				181				152
All other			237				211				216				247				235
Total recoveries			2,535				2,742				2,729				2,291				2,997
Net charge-offs			(3,151	)			(1,048	)			(1,571	)			(952	)			(6,551	)
Provision charged to operating expense			1,000				—				2,000				1,000				—
Balance, end of period		$	123,736			$	125,887			$	126,935			$	126,506			$	126,458
Average loans for period		$	10,737,802			$	10,601,481			$	10,513,732			$	10,372,925			$	10,321,299
Ratio:
Net charge-offs to average loans (annualized)			0.12	%			0.04	%			0.06	%			0.04	%			0.25	%

 

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BXS Announces Fourth Quarter 2016 Financial Results

Page 15

January 25, 2017

 

BancorpSouth, Inc.

Selected Loan Data

(Dollars in thousands)

(Unaudited)

 

		Quarter Ended
		Dec-16				Sep-16				Jun-16				Mar-16				Dec-15
NON-PERFORMING ASSETS
NON-PERFORMING LOANS AND LEASES:
Nonaccrual Loans and Leases
Commercial and industrial		$	13,679			$	11,659			$	8,675			$	10,248			$	8,493
Real estate
Consumer mortgages			21,084				20,196				19,309				22,968				21,637
Home equity			3,817				3,721				2,734				3,564				4,021
Agricultural			1,546				1,194				1,107				932				921
Commercial and industrial-owner occupied			10,791				11,983				16,021				16,633				16,512
Construction, acquisition and development			7,022				6,939				6,086				7,720				9,130
Commercial real estate			13,402				14,793				14,197				19,417				21,741
Credit cards			161				121				159				188				188
All other			310				119				350				256				385
Total nonaccrual loans and leases		$	71,812			$	70,725			$	68,638			$	81,926			$	83,028
Loans and Leases 90+ Days Past Due, Still Accruing:			3,983				2,255				1,875				4,567				2,013
Restructured Loans and Leases, Still Accruing			26,047				17,936				9,687				7,753				9,876
Total non-performing loans and leases			101,842				90,916				80,200				94,246				94,917
OTHER REAL ESTATE OWNED:			7,810				11,391				14,658				12,685				14,759
Total Non-performing Assets		$	109,652			$	102,307			$	94,858			$	106,931			$	109,676
Additions to Nonaccrual Loans and Leases During the Quarter		$	16,007			$	17,319			$	10,553			$	15,933			$	34,050
Loans and Leases 30-89 Days Past Due, Still Accruing:
Commercial and industrial		$	3,449			$	6,736			$	3,748			$	3,758			$	2,409
Real estate
Consumer mortgages			14,490				15,443				15,784				11,985				15,128
Home equity			3,072				3,854				2,842				2,414				2,456
Agricultural			1,283				616				367				240				303
Commercial and industrial-owner occupied			2,120				1,712				2,854				669				1,018
Construction, acquisition and development			1,344				1,272				1,137				1,489				1,070
Commercial real estate			653				15,221				3,776				1,831				830
Credit cards			726				774				677				569				677
All other			673				1,089				712				606				744
Total Loans and Leases 30-89 days past due, still accruing		$	27,810			$	46,717			$	31,897			$	23,561			$	24,635
Credit Quality Ratios:
Provision for credit losses to average loans and leases (annualized)			0.04	%			0.00	%			0.08	%			0.04	%			0.00	%
Allowance for credit losses to net loans and leases			1.14	%			1.18	%			1.20	%			1.21	%			1.22	%
Allowance for credit losses to non-performing loans and leases			121.50	%			138.47	%			158.27	%			134.23	%			133.23	%
Allowance for credit losses to non-performing assets			112.84	%			123.05	%			133.82	%			118.31	%			115.30	%
Non-performing loans and leases to net loans and leases			0.94	%			0.85	%			0.76	%			0.90	%			0.92	%
Non-performing assets to net loans and leases			1.01	%			0.96	%			0.90	%			1.02	%			1.06	%

 

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BXS Announces Fourth Quarter 2016 Financial Results

Page 16

January 25, 2017

 

BancorpSouth, Inc.

Selected Loan Data

(Dollars in thousands)

(Unaudited)

 

		December 31, 2016
						Special
		Pass				Mention				Substandard				Doubtful				Loss				Impaired				Total
LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE:
Commercial and industrial		$	1,562,263			$	—			$	41,618			$	100			$	—			$	8,314			$	1,612,295
Real estate
Consumer mortgages			2,579,905				522				61,602				282				—				1,655				2,643,966
Home equity			616,758				—				11,231				—				—				857				628,846
Agricultural			233,939				—				10,577				—				—				861				245,377
Commercial and industrial-owner occupied			1,705,266				3,668				47,010				—				—				8,321				1,764,265
Construction, acquisition and development			1,135,618				—				15,697				—				—				5,933				1,157,248
Commercial real estate			2,179,318				634				45,471				—				—				12,296				2,237,719
Credit cards			109,656				—				—				—				—				—				109,656
All other			405,611				—				7,008				—				—				—				412,619
Total loans		$	10,528,334			$	4,824			$	240,214			$	382			$	—			$	38,237			$	10,811,991
		September 30, 2016
						Special
		Pass				Mention				Substandard				Doubtful				Loss				Impaired				Total
LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE:
Commercial and industrial		$	1,567,073			$	—			$	42,117			$	774			$	—			$	6,188			$	1,616,152
Real estate
Consumer mortgages			2,549,780				528				59,727				89				—				1,263				2,611,387
Home equity			610,313				—				10,766				—				—				1,487				622,566
Agricultural			230,891				—				10,639				—				—				641				242,171
Commercial and industrial-owner occupied			1,619,545				512				39,135				—				—				9,285				1,668,477
Construction, acquisition and development			1,103,739				—				11,308				—				—				6,339				1,121,386
Commercial real estate			2,188,170				—				38,637				—				—				13,910				2,240,717
Credit cards			107,447				—				—				—				—				—				107,447
All other			420,838				—				7,620				—				—				—				428,458
Total loans		$	10,397,796			$	1,040			$	219,949			$	863			$	—			$	39,113			$	10,658,761

 

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BXS Announces Fourth Quarter 2016 Financial Results

Page 17

January 25, 2017

 

BancorpSouth, Inc.

Geographical Information

(Dollars in thousands)

(Unaudited)

 

		December 31, 2016
		Alabama
		and Florida
		Panhandle				Arkansas				Louisiana				Mississippi				Missouri				Tennessee				Texas				Other				Total
LOAN AND LEASE PORTFOLIO:
Commercial and industrial		$	150,644			$	194,141			$	181,338			$	594,016			$	78,450			$	122,403			$	225,390			$	65,913			$	1,612,295
Real estate
Consumer mortgages			349,488				320,160				229,038				833,535				87,015				305,512				491,396				27,822				2,643,966
Home equity			98,427				44,608				71,030				230,337				22,734				145,079				15,070				1,561				628,846
Agricultural			6,579				87,424				26,624				67,797				5,481				13,482				37,950				40				245,377
Commercial and industrial-owner occupied			200,929				191,826				206,321				713,548				45,248				147,034				259,359				—				1,764,265
Construction, acquisition and development			122,912				74,124				53,071				370,193				25,741				176,539				334,668				—				1,157,248
Commercial real estate			315,091				374,388				226,718				558,378				199,968				190,228				372,948				—				2,237,719
Credit cards			—				—				—				—				—				—				—				109,656				109,656
All other			55,318				43,212				25,540				209,058				3,511				24,898				44,829				6,253				412,619
Total loans		$	1,299,388			$	1,329,883			$	1,019,680			$	3,576,862			$	468,148			$	1,125,175			$	1,781,610			$	211,245			$	10,811,991
NON-PERFORMING LOANS AND LEASES:
Commercial and industrial		$	167			$	530			$	4,000			$	15,179			$	—			$	385			$	3,422			$	235			$	23,918
Real estate
Consumer mortgages			2,166				4,279				1,875				11,325				430				1,920				3,948				151				26,094
Home equity			426				824				1,036				713				81				611				127				2				3,820
Agricultural			—				90				24				1,461				—				—				45				2				1,622
Commercial and industrial-owner occupied			1,163				3,972				1,810				6,200				317				611				606				—				14,679
Construction, acquisition and development			45				1,014				—				5,809				5				—				407				—				7,280
Commercial real estate			1,011				565				—				17,905				—				14				444				—				19,939
Credit cards			—				—				—				—				—				—				—				1,372				1,372
All other			—				1				26				268				—				20				2,802				1				3,118
Total loans		$	4,978			$	11,275			$	8,771			$	58,860			$	833			$	3,561			$	11,801			$	1,763			$	101,842
NON-PERFORMING LOANS AND LEASES AS A PERCENTAGE OF OUTSTANDING:
Commercial and industrial			0.11	%			0.27	%			2.21	%			2.56	%			0.00	%			0.31	%			1.52	%			0.36	%			1.48	%
Real estate
Consumer mortgages			0.62	%			1.34	%			0.82	%			1.36	%			0.49	%			0.63	%			0.80	%			0.54	%			0.99	%
Home equity			0.43	%			1.85	%			1.46	%			0.31	%			0.36	%			0.42	%			0.84	%			0.13	%			0.61	%
Agricultural			0.00	%			0.10	%			0.09	%			2.15	%			0.00	%			0.00	%			0.12	%			5.00	%			0.66	%
Commercial and industrial-owner occupied			0.58	%			2.07	%			0.88	%			0.87	%			0.70	%			0.42	%			0.23	%			N/A				0.83	%
Construction, acquisition and development			0.04	%			1.37	%			0.00	%			1.57	%			0.02	%			0.00	%			0.12	%			N/A				0.63	%
Commercial real estate			0.32	%			0.15	%			0.00	%			3.21	%			0.00	%			0.01	%			0.12	%			N/A				0.89	%
Credit cards			N/A				N/A				N/A				N/A				N/A				N/A				N/A				1.25	%			1.25	%
All other			0.00	%			0.00	%			0.10	%			0.13	%			0.00	%			0.08	%			6.25	%			0.02	%			0.76	%
Total loans			0.38	%			0.85	%			0.86	%			1.65	%			0.18	%			0.32	%			0.66	%			0.83	%			0.94	%

 

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BXS Announces Fourth Quarter 2016 Financial Results

Page 18

January 25, 2017

 

BancorpSouth, Inc.

Noninterest Revenue and Expense

(Dollars in thousands)

(Unaudited)

 

		Quarter Ended																				Year Ended
		Dec-16				Sep-16				Jun-16				Mar-16				Dec-15				Dec-16				Dec-15
NONINTEREST REVENUE:
Mortgage banking excl. MSR market value adjustment		$	6,550			$	10,469			$	13,135			$	10,572			$	7,657			$	40,726			$	36,691
MSR market value adjustment			11,242				1,813				(4,092	)			(7,954	)			2,865				1,009				(1,161	)
Credit card, debit card and merchant fees			9,262				9,292				9,495				8,961				9,414				37,010				36,533
Deposit service charges			9,956				11,313				11,018				11,014				11,836				43,301				46,765
Securities gains, net			39				1				86				2				48				128				136
Insurance commissions			25,709				28,194				28,803				33,249				25,348				115,955				116,744
Trust income			3,874				3,641				3,493				3,430				3,469				14,438				14,701
Annuity fees			257				446				465				477				449				1,645				2,016
Brokerage commissions and fees			1,270				1,225				1,389				1,202				1,457				5,086				5,943
Bank-owned life insurance			2,104				1,775				1,813				1,893				1,881				7,585				7,457
Other miscellaneous income			2,701				2,699				4,078				2,669				2,962				12,147				12,143
Total noninterest revenue		$	72,964			$	70,868			$	69,683			$	65,515			$	67,386			$	279,030			$	277,968
NONINTEREST EXPENSE:
Salaries and employee benefits		$	81,839			$	82,079			$	81,832			$	82,467			$	80,177				328,217			$	322,469
Occupancy, net of rental income			10,294				10,412				10,109				10,273				10,434				41,088				41,866
Equipment			3,563				3,423				3,295				3,765				3,569				14,046				15,309
Deposit insurance assessments			1,818				3,227				2,582				2,288				2,630				9,915				9,509
Regulatory settlement			—				—				—				10,277				—				10,277				—
Advertising			2,443				925				1,043				633				1,009				5,044				4,288
Foreclosed property expense			1,005				859				1,309				1,181				3,014				4,354				7,418
Telecommunications			1,245				1,288				1,259				1,295				1,322				5,087				5,226
Public relations			716				718				599				661				702				2,694				2,769
Data processing			6,903				6,856				6,685				6,391				6,092				26,835				24,148
Computer software			3,013				2,976				2,732				2,660				2,609				11,381				10,500
Amortization of intangibles			963				923				869				880				922				3,635				3,963
Legal			1,190				1,064				1,754				4,535				19,434				8,543				30,346
Merger expense			—				—				1				1				13				2				25
Postage and shipping			1,075				1,059				985				1,117				1,139				4,236				4,535
Other miscellaneous expense			15,441				13,703				13,664				13,876				15,285				56,684				57,540
Total noninterest expense		$	131,508			$	129,512			$	128,718			$	142,300			$	148,351			$	532,038			$	539,911
INSURANCE COMMISSIONS:
Property and casualty commissions		$	19,098			$	20,927			$	20,417			$	19,877			$	18,814				80,319			$	81,787
Life and health commissions			5,757				5,897				6,252				5,615				5,823				23,521				23,212
Risk management income			610				674				592				623				672				2,499				2,684
Other			244				696				1,542				7,134				39				9,616				9,061
Total insurance commissions		$	25,709			$	28,194			$	28,803			$	33,249			$	25,348			$	115,955			$	116,744

 

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BXS Announces Fourth Quarter 2016 Financial Results

Page 19

January 25, 2017

 

BancorpSouth, Inc.

Selected Additional Information

(Dollars in thousands)

(Unaudited)

 

		Quarter Ended
		Dec-16				Sep-16				Jun-16				Mar-16				Dec-15
MORTGAGE SERVICING RIGHTS:
Fair value, beginning of period		$	51,930			$	48,108			$	50,544			$	57,268			$	52,973
Additions to mortgage servicing rights:
Originations of servicing assets			4,022				4,349				3,723				2,612				3,065
Changes in fair value:
Due to payoffs/paydowns			(2,447	)			(2,338	)			(2,066	)			(1,380	)			(1,633	)
Due to change in valuation inputs or assumptions used in the valuation model			11,242				1,813				(4,092	)			(7,954	)			2,865
Other changes in fair value			(1	)			(2	)			(1	)			(2	)			(2	)
Fair value, end of period		$	64,746			$	51,930			$	48,108			$	50,544			$	57,268
Production revenue:
Origination		$	4,324			$	8,168			$	10,523			$	7,208			$	4,909
Servicing			4,673				4,639				4,678				4,744				4,381
Payoffs/Paydowns			(2,447	)			(2,338	)			(2,066	)			(1,380	)			(1,633	)
Total production revenue			6,550				10,469				13,135				10,572				7,657
Market value adjustment			11,242				1,813				(4,092	)			(7,954	)			2,865
Total mortgage banking revenue		$	17,792			$	12,282			$	9,043			$	2,618			$	10,522
Mortgage loans serviced		$	6,384,649			$	6,285,027			$	6,156,258			$	6,096,220			$	6,011,236
MSR/mtg loans serviced			1.01	%			0.83	%			0.78	%			0.83	%			0.95	%
AVAILABLE-FOR-SALE SECURITIES, at fair value
U.S. Government agencies		$	1,789,427			$	1,691,866			$	1,310,803			$	1,196,167			$	1,244,640
Government agency issued residential mortgage-back securities			176,243				184,095				180,178				189,741				140,540
Government agency issued commercial mortgage-back securities			172,279				178,827				193,475				207,908				260,693
Obligations of states and political subdivisions			360,005				384,995				399,391				408,537				417,499
Other			33,722				28,416				20,036				14,020				18,957
Total available-for-sale securities		$	2,531,676			$	2,468,199			$	2,103,883			$	2,016,373			$	2,082,329

 

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BXS Announces Fourth Quarter 2016 Financial Results

Page 20

January 25, 2017

 

BancorpSouth, Inc.

Reconciliation of Non-GAAP Measures and Other Non-GAAP 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, total operating expense, 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, operating earnings per share-excluding MSR, efficiency ratio (tax equivalent) and operating efficiency ratio-excluding MSR (tax equivalent). 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 capital position and 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																				Year ended
				12/31/2016				9/30/2016				6/30/2016				3/31/2016				12/31/2015				12/31/2016				12/31/2015
Net income				$	37,670			$	37,817			$	34,692			$	22,549			$	21,169			$	132,728			$	127,491
Plus:		Merger expense, net of tax			—				—				1				1				8				2				15
		Legal charge, net of tax			—				—				—				—				10,246				—				10,246
		Regulatory related charges, net of tax			—				—				—				9,412				—				9,412				—
Less:		Security gains, net of tax			25				—				53				2				30				80				84
Net operating income				$	37,645			$	37,817			$	34,640			$	31,960			$	31,393			$	142,062			$	137,668
Less:		MSR market value adjustment, net of tax			6,970				1,124				(2,537	)			(4,931	)			1,776				626				(720	)
Net operating income-excluding MSR				$	30,675			$	36,693			$	37,177			$	36,891			$	29,617			$	141,436			$	138,388
Reconciliation of Total Operating Expense to Total Noninterest Expense:
Total noninterest expense				$	131,508			$	129,512			$	128,718			$	142,300			$	148,351			$	532,038			$	539,911
Less:		Merger expense			—				—				1				1				13				2				24
		Legal charge			—				—				—				—				16,500				—				16,500
		Regulatory related charges			—				—				—				13,777				—				13,777				—
Total operating expense				$	131,508			$	129,512			$	128,717			$	128,522			$	131,838			$	518,259			$	523,387

 

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BXS Announces Fourth Quarter 2016 Financial Results

Page 21

January 25, 2017

 

BancorpSouth, Inc.

Reconciliation of Non-GAAP Measures and Other Non-GAAP 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																				Year ended
				12/31/2016				9/30/2016				6/30/2016				3/31/2016				12/31/2015				12/31/2016				12/31/2015
Tangible assets
Total assets				$	14,724,388			$	14,611,483			$	14,137,160			$	13,926,398			$	13,798,662			$	14,724,388			$	13,798,662
Less:		Goodwill			300,798				294,901				294,901				291,498				291,498				300,798				291,498
		Other identifiable intangible assets			21,894				19,908				20,831				19,664				20,545				21,894				20,545
Total tangible assets				$	14,401,696			$	14,296,674			$	13,821,428			$	13,615,236			$	13,486,619			$	14,401,696			$	13,486,619
Tangible shareholders’ equity
Total shareholders’ equity				$	1,723,883			$	1,724,104			$	1,713,043			$	1,679,793			$	1,655,444			$	1,723,883			$	1,655,444
Less:		Goodwill			300,798				294,901				294,901				291,498				291,498				300,798				291,498
		Other identifiable intangible assets			21,894				19,908				20,831				19,664				20,545				21,894				20,545
Total tangible shareholders’ equity				$	1,401,191			$	1,409,295			$	1,397,311			$	1,368,631			$	1,343,401			$	1,401,191			$	1,343,401
Total average assets				$	14,655,360			$	14,366,759			$	14,027,786			$	13,851,661			$	13,724,595			$	14,226,953			$	13,583,715
Total shares of common stock outstanding					93,696,687				94,074,740				94,546,091				94,438,626				94,162,728				93,696,687				94,162,728
Average shares outstanding-diluted					93,966,392				94,563,833				94,694,795				94,593,540				94,384,443				94,454,640				96,123,847
Tangible shareholders’ equity to tangible assets (1)					9.73	%			9.86	%			10.11	%			10.05	%			9.96	%			9.73	%			9.96	%
Return on tangible equity (2)					10.70	%			10.68	%			9.99	%			6.63	%			6.25	%			9.47	%			9.50	%
Operating return on tangible equity-excluding MSR (3)					8.71	%			10.36	%			10.70	%			10.84	%			8.75	%			10.09	%			10.30	%
Operating return on average assets-excluding MSR (4)					0.83	%			1.02	%			1.07	%			1.07	%			0.86	%			0.99	%			1.02	%
Operating return on average shareholders’ equity-excluding MSR (5)					7.08	%			8.49	%			8.84	%			8.89	%			7.12	%			8.31	%			8.37	%
Tangible book value per share (6)				$	14.95			$	14.98			$	14.78			$	14.49			$	14.27			$	14.95			$	14.27
Operating earnings per share (7)				$	0.40			$	0.40			$	0.37			$	0.34			$	0.33			$	1.51			$	1.44
Operating earnings per share-excluding MSR (8)				$	0.33			$	0.39			$	0.39			$	0.39			$	0.31			$	1.50			$	1.44

 

(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 shares of common stock 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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