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BancorpSouth Reports Record Quarterly Earnings

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BancorpSouth Reports Record Quarterly Earnings

PR Newswire

TUPELO, Miss., July 18, 2018 /PRNewswire/ -- BancorpSouth Bank (NYSE:BXS) (the "Company") today announced financial results for the quarter ended June 30, 2018.

Highlights for the second quarter of 2018 included:

  • Record quarterly net income of $54.0 million, or $0.55 per diluted share, which represents an increase of 34 percent on a per share basis compared to the second quarter of 2017.
  • Completed operational integration of Central Community Corporation merger and recorded corresponding merger-related expenses of $1.9 million for the second quarter.
  • Net operating income – excluding MSR – of $55.6 million, or $0.56 per diluted share.
  • Generated net loan growth of $121.3 million, or 4.0 percent on an annualized basis.
  • Net interest margin increased to 3.71 percent from 3.67 percent for the first quarter of 2018.
  • Announced the signing of a definitive merger agreement with Icon Capital Corporation, parent company of Icon Bank of Texas, National Association, headquartered in Houston, Texas.
  • Repurchased 785,877 shares of outstanding common stock at a weighted average price of $31.39 per share.

The Company reported net income of $54.0 million, or $0.55 per diluted share, for the second quarter of 2018 compared with net income of $37.9 million, or $0.41 per diluted share, for the second quarter of 2017 and net income of $53.5 million, or $0.54 per diluted share, for the first quarter of 2018.  The Company reported net operating income – excluding MSR – of $55.6 million, or $0.56 per diluted share, for the second quarter of 2018 compared to $38.8 million, or $0.42 per diluted share, for the second quarter of 2017 and $53.6 million, or $0.54 per diluted share, for the first quarter of 2018. 

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 recognized securities gains and losses, mortgage servicing rights ("MSR") valuation adjustments, restructuring charges, merger-related expenses, industry-related legal settlements, and other one-time charges. 

"We are pleased to report another quarter of record financial performance," remarked Dan Rollins, Chairman and Chief Executive Officer.  "The increase in our earnings for the quarter was driven by balance sheet growth and improvement in our net interest margin combined with continued strong credit quality and a stable expense base.   Our business development efforts yielded net loan growth of $121 million for the quarter, or 4 percent on an annualized basis.  We are pleased with these results, particularly given competitive pressures and anticipated runoff associated with our acquired loans.  As expected, we experienced a seasonal decline on the deposit side of the balance sheet.  Finally, our net interest margin improved to 3.71 percent as we continue to benefit from recent rate hikes."

"Additionally, we continue our efforts to deploy capital in a manner that seeks to maximize shareholder value.  We repurchased just over 785,000 shares of our stock at a weighted average price of $31.39 per share during the quarter.  We also announced the signing of a definitive merger agreement with Icon Capital Corporation, which has approximately $800 million in assets in the Houston, Texas market.  We are excited about the value the Icon team will add to our franchise as we continue to grow."

Net Interest Revenue

Net interest revenue was $142.1 million for the second quarter of 2018, an increase of 21.0 percent from $117.5 million for the second quarter of 2017 and an increase of 2.9 percent from $138.1 million for the first quarter of 2018.  The fully taxable equivalent net interest margin was 3.71 percent for the second quarter of 2018 compared to 3.52 percent for the second quarter of 2017 and 3.67 percent for the first quarter of 2018.  Yields on net loans and leases were 4.67 percent for the second quarter of 2018 compared with 4.27 percent for the second quarter of 2017 and 4.60 percent for the first quarter of 2018, while yields on total interest earning assets were 4.15 percent for the second quarter of 2018 compared with 3.80 percent for the second quarter of 2017 and 4.05 percent for the first quarter of 2018.  The net interest margin, excluding accretable yield, was 3.63 percent for the second quarter of 2018 compared with 3.60 percent for the first quarter of 2018 while yields on net loans and leases, excluding accretable yield, were 4.57 percent for the second quarter of 2018 compared with 4.51 percent for the first quarter of 2018.  Purchase accounting accretion did not impact the net interest margin or net loan and lease yields for the second quarter of 2017.  The average cost of deposits was 0.34 percent for the second quarter of 2018 compared to 0.25 percent for the second quarter of 2017 and 0.31 percent for the first quarter of 2018.

Asset, Deposit and Loan Activity

Total assets were $17.2 billion at June 30, 2018 compared with $14.8 billion at June 30, 2017.  Loans and leases, net of unearned income, were $12.4 billion at June 30, 2018 compared with $11.0 billion at June 30, 2017.  Total deposits were $13.5 billion at June 30, 2018 compared with $11.9 billion at June 30, 2017.  These balance sheet comparisons include the impact of the acquisitions of Central Community Corporation and Ouachita Bancshares Corp., each of which closed effective January 15, 2018.  Balance sheet totals for these two banks at the time of closing are disclosed in the "Transactions" section of this news release.

Provision for Credit Losses and Allowance for Credit Losses

Earnings for the second quarter of 2018 reflect a provision for credit losses of $2.5 million, compared to a provision of $1.0 million for both the second quarter of 2017 and first quarter of 2018.  Net charge-offs for the second quarter of 2018 were $2.0 million, compared with net charge-offs of $4.6 million for the second quarter of 2017 and net recoveries of $0.2 million for the first quarter of 2018.  The allowance for credit losses was $119.9 million, or 0.97 percent of net loans and leases, at June 30, 2018, compared with $121.6 million, or 1.10 percent of net loans and leases, at June 30, 2017 and $119.4 million, or 0.97 percent of net loans and leases, at March 31, 2018.  The allowance for credit losses coverage metrics were impacted by loans acquired in the acquisitions that closed during the first quarter of 2018.

Total non-performing assets were $81.2 million, or 0.65 percent of net loans and leases, at June 30, 2018 compared with $79.4 million, or 0.72 percent of net loans and leases, at June 30, 2017, and $90.9 million, or 0.74 percent of net loans and leases, at March 31, 2018.  Other real estate owned was $7.8 million at June 30, 2018 compared with $7.7 million at June 30, 2017 and $9.4 million at March 31, 2018.

Noninterest Revenue

Noninterest revenue was $72.5 million for the second quarter of 2018, compared with $68.1 million for the second quarter of 2017 and $78.9 million for the first quarter of 2018.  These results included a negative MSR valuation adjustment of $0.2 million for the second quarter of 2018, compared with a negative MSR valuation adjustment of $1.5 million for the second quarter of 2017 and a positive MSR valuation adjustment of $5.5 million for the first quarter of 2018.  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 $7.1 million for the second quarter of 2018, compared with $7.6 million for the second quarter of 2017 and $7.7 million for the first quarter of 2018.  Mortgage origination volume for the second quarter of 2018 was $523.7 million, compared with $385.9 million for the second quarter of 2017 and $291.9 million for the first quarter of 2018.  Of total mortgage origination volume for the second quarter of 2018, $209.3 million was portfolio loans, compared with $93.5 million for the second quarter of 2017 and $61.0 million for the first quarter of 2018.

Credit and debit card fee revenue was $10.5 million for the second quarter of 2018, compared with $9.6 million for both the second quarter of 2017 and the first quarter of 2018.  Deposit service charge revenue was $10.8 million for the second quarter of 2018, compared with $9.7 million for the second quarter of 2017 and $10.9 million for the first quarter of 2018.  Wealth management revenue was $5.7 million for the second quarter of 2018, compared with $5.3 million for the second quarter of 2017 and $5.7 million for the first quarter of 2018.  Other noninterest revenue was $5.5 million for the second quarter of 2018, compared with $6.3 million for the second quarter of 2017 and $10.4 million for the first quarter of 2018.   Other noninterest revenue for the first quarter of 2018 benefitted from a legal settlement totaling $3.0 million.

Insurance commission revenue was $33.0 million for the second quarter of 2018, compared with $31.1 million for the second quarter of 2017 and $29.1 million for the first quarter of 2018.  New accounting guidance, which became effective January 1, 2018, impacted the Company's accounting for insurance commission revenue.  Previously, contingent commissions were recognized as revenue in the period of receipt; however, under the guidance, the Company is required to estimate and accrue for contingent commissions throughout the year.

Noninterest Expense

Noninterest expense for the second quarter of 2018 was $145.2 million, compared with $127.6 million for the second quarter of 2017 and $147.7 million for the first quarter of 2018.  Salaries and employee benefits expense was $91.5 million for the second quarter of 2018 compared to $80.7 million for the second quarter of 2017 and $91.2 million for the first quarter of 2018.  Occupancy expense was $11.1 million for the second quarter of 2018, compared with $10.5 million for the second quarter of 2017 and $10.8 million for the first quarter of 2018.  Other noninterest expense was $35.7 million for the second quarter of 2018, compared to $30.7 million for the second quarter of 2017 and $39.6 million for the first quarter of 2018.  Other noninterest expense for the first quarter of 2018 was adversely impacted by a single forgery and theft loss totaling $2.3 million and the second quarter benefitted from a $1.3 million fraud loss recovery.  Additionally, merger-related expense for the second quarter of 2018 was $1.9 million, compared with no merger-related expense for the second quarter of 2017 and $5.7 million for the first quarter of 2018.  Income tax expense was reduced by the tax benefit of the vesting of restricted stock during the second quarter.

Capital Management

The Company's equity capitalization is comprised entirely of common stock.  The Company's ratio of shareholders' equity to assets was 12.03 percent at June 30, 2018, compared with 11.40 percent at June 30, 2017 and 11.99 percent at March 31, 2018.  The ratio of tangible shareholders' equity to tangible assets was 8.71 percent at June 30, 2018, compared with 9.44 percent at June 30, 2017 and 8.69 percent at March 31, 2018.

During the second quarter of 2018, the Company repurchased 785,877 shares of its outstanding common stock at a weighted average price of $31.39 per share pursuant to its share repurchase program which is intended to comply with Rules 10b-18 and 10b5-1 promulgated under the Securities and Exchange Act of 1934, as amended.  During the first quarter of 2018, the Company repurchased 2,073,986 shares of its outstanding common stock at a weighted average price of $32.32 per share.  As of June 30, 2018, the Company had 3,140,137 remaining shares available for repurchase under its current share repurchase authorization, which expires on December 31, 2019.  

Estimated regulatory capital ratios at June 30, 2018 were calculated in accordance with the Basel III capital framework.  The Company is a "well capitalized" bank, as defined by federal regulations, at June 30, 2018, with Tier 1 risk-based capital of 11.42 percent and total risk-based capital of 12.30 percent, compared with required minimum levels of 8 percent and 10 percent, respectively, in order to qualify for "well capitalized" classification. 

Summary

Rollins concluded, "As we look toward the second half of 2018, I'm excited about the opportunity to continue improving our performance.  While we do expect to see continued competitive pressure on deposit pricing, we anticipate our net interest margin will continue to improve as our loan and securities portfolios reprice.  Additionally, we expect to continue to realize additional cost savings related to our two acquisitions that closed in January.  In particular, the conversion for First State Bank Central Texas occurred late in the second quarter.  Accordingly, we anticipate that most of the cost savings associated with this transaction will be realized in future quarters."

TRANSACTIONS

Icon Capital Corporation

On April 18, 2018, the Company announced the signing of a definitive merger agreement (the "Icon Merger Agreement") with Icon Capital Corporation and its wholly owned subsidiary, Icon Bank of Texas, National Association (collectively referred to as "Icon"), pursuant to which Icon agreed to be merged with and into the Company (the "Icon Merger").  Icon is headquartered in Houston, Texas and operates 7 full-service banking offices in the Houston, Texas metropolitan area.  As of June 30, 2018, Icon, on a consolidated basis, reported total assets of $740.7 million, total loans of $627.6 million and total deposits of $643.2 million.  Under the terms of the definitive agreement, the Company expects to issue approximately 4,125,000 shares of the Company's common stock plus $17.5 million in cash for all outstanding shares of Icon Capital Corporation's capital stock, subject to certain conditions and potential adjustments.  For more information regarding the Icon Merger, see our Current Report on Form 8-K that was filed with the Federal Deposit Insurance Corporation ("FDIC") on April 18, 2018.  The Agreement has been unanimously approved by the Boards of Directors of both the Company and Icon. Icon has agreed to convene a meeting of its shareholders to vote upon the approval of the Merger Agreement. Subject to the satisfaction of all closing conditions, including the receipt of all required regulatory approvals, the Merger is expected to be completed during the second half of 2018 although the Company can provide no assurance that the Icon Merger will close during this time period or at all.

Central Community Corporation

Effective January 15, 2018, the Company completed the merger with Central Community Corporation ("CCC"), headquartered in Temple, Texas, pursuant to which CCC merged with and into the Company.  CCC was the parent company of First State Bank Central Texas ("First State Bank"), which was headquartered in Austin, Texas.  First State Bank operated 31 full-service banking offices in central Texas.  As of January 15, 2018, CCC, on a consolidated basis, reported total assets of $1.4 billion, total loans of $712.2 million and total deposits of $1.2 billion.  Under the terms of the definitive merger agreement, the Company issued approximately 7,250,000 shares of the Company's common stock plus $28.5 million in cash for all outstanding shares of CCC's capital stock.  For more information regarding the CCC merger, see our Current Report on Form 8-K that was filed with the FDIC on January 16, 2018.  The purchase accounting for this transaction is considered provisional as management continues to identify and assess information regarding the nature of the acquired assets and liabilities and reviews the associated valuation assumptions and methodologies.

Ouachita Bancshares Corp.

Effective January 15, 2018, the Company completed the merger with Ouachita Bancshares Corp., parent company of Ouachita Independent Bank (collectively referred to as "OIB"), headquartered in Monroe, Louisiana, pursuant to which OIB was merged with and into the Company.  OIB operated 11 full-service banking offices along the I-20 corridor and had a loan production office in Madison, Mississippi.  As of January 15, 2018, OIB, on a consolidated basis, reported total assets of $707.1 million, total loans of $495.6 million and total deposits of $653.4 million.  Under the terms of the definitive merger agreement, the Company issued 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.  For more information regarding the OIB merger, see our Current Report on Form 8-K that was filed with the FDIC on January 16, 2018.  The purchase accounting for this transaction is considered provisional as management continues to identify and assess information regarding the nature of the acquired assets and liabilities and reviews the associated valuation assumptions and methodologies.

The Reorganization

Effective October 31, 2017, the merger of BancorpSouth, Inc. with and into BancorpSouth Bank was closed, with BancorpSouth Bank continuing as the surviving entity (the "Reorganization").  The Reorganization resulted in the elimination of the holding company structure.  The Reorganization is expected to improve efficiency through the elimination of redundant corporate infrastructure and duplicative regulatory oversight.  For more information regarding the Reorganization, see our Current Report on Form 8-K that was filed with the FDIC on November 1, 2017.

Non-GAAP Measures and Ratios

This news release presents certain financial measures and ratios that are not calculated in accordance with U.S. generally accepted accounting principles ("GAAP").  A discussion regarding these non-GAAP measures and ratios, including reconciliations of non-GAAP measures to the most directly comparable GAAP measures and definitions for non-GAAP ratios, appears under the caption "Reconciliation of Non-GAAP Measures and Other Non-GAAP Ratio Definitions"  beginning on page 21 of this news release.

Conference Call and Webcast

The Company will conduct a conference call to discuss its second quarter 2018 financial results on July 19, 2018, at 10:00 a.m. (Central Time).  This conference call will be an interactive session between management and analysts. Shareholders and other interested parties may listen to this live conference call via Internet webcast by accessing www.BancorpSouth.investorroom.com/Webcasts. The webcast will also be available in archived format at the same address.

About BancorpSouth Bank

BancorpSouth Bank (NYSE:BXS) is headquartered in Tupelo, Mississippi, with approximately $17 billion in assets.  BancorpSouth operates approximately 280 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.

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 benefits, costs, synergies and financial and operational impact of the Reorganization on the Company, the benefits, costs, synergies, and financial and operational impact of the CCC and OIB mergers, the acceptance by customers of OIB and CCC of the Company's products and services after the closing of the mergers, the terms, timing and closing of the proposed Icon Merger, acceptance by customers of Icon of the Company's products and services, the opportunities to enhance market share in certain markets and market acceptance of  the Company generally in new markets, 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 and the United States Department of Justice related to the Company's fair lending practices (the "Consent Order"), the impact of the Tax Cuts and Jobs Act of 2017 on the Company and its operations and financial performance, 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, the impact of interest rates on loan yields, 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 customer base and 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, dispositions and other strategic growth opportunities and initiatives 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 to meet expectations regarding the benefits, costs, synergies, and financial and operational impact of the Reorganization and the CCC and OIB mergers, the possibility that any of the anticipated benefits, costs, synergies and financial and operational improvements of the Reorganization and the OIB and CCC mergers will not be realized or will not be realized as expected, the ability of the Company and Icon to complete the Icon Merger, the ability of the Company and Icon to satisfy the conditions to the completion of the Icon Merger, including the approval of the merger transaction by Icon's shareholders and the receipt of all regulatory approvals required for the Icon Merger on the terms expected in the Icon Merger Agreement, the ability of the Company and Icon to meet expectations regarding the timing, completion and accounting and tax treatments of the Icon Merger, the possibility that any of the anticipated benefits of the Icon Merger will not be realized or will not be realized as expected, the failure of the Icon Merger to close for any other reason, the effect of  the announcement of the Icon Merger on the Company's operating results, the possibility that the Icon Merger may be more expensive to complete than anticipated, including as a result of unexpected factors or events, the lack of availability of the Bank's filings mandated by the Exchange Act from the SEC's publicly available website after the closing of the Reorganization, 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 Tax Cuts and Jobs Act of 2017 on the Company and its operations and financial performance, 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, dispositions and other strategic growth opportunities and initiatives, 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 FDIC.  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.

 

   







BancorpSouth Bank

Selected Financial Information

(Dollars in thousands, except per share data)

(Unaudited)














Quarter Ended

Quarter Ended

Quarter Ended

Quarter Ended

Quarter Ended


6/30/2018

3/31/2018

12/31/2017

9/30/2017

6/30/2017

Earnings Summary:






Interest revenue

$         159,290

$         152,195

$         132,276

$         130,934

$         126,855

Interest expense

17,162

14,117

10,890

10,373

9,377

Net interest revenue

142,128

138,078

121,386

120,561

117,478

Provision for credit losses

2,500

1,000

500

500

1,000

Net interest revenue, after provision






   for credit losses

139,628

137,078

120,886

120,061

116,478

Noninterest revenue

72,456

78,934

63,074

65,960

68,130

Noninterest expense

145,182

147,701

125,881

126,903

127,553

Income before income taxes

66,902

68,311

58,079

59,118

57,055

Income tax expense

12,856

14,820

20,556

19,590

19,166

Net income

$           54,046

$           53,491

$           37,523

$           39,528

$           37,889







Balance Sheet - Period End Balances






Total assets

$    17,222,491

$    17,185,772

$    15,298,518

$    14,760,394

$    14,843,130

Total earning assets

15,600,037

15,593,366

14,081,818

13,606,145

13,674,436

Total securities

2,828,754

2,989,767

2,798,542

2,326,900

2,388,392

Loans and leases, net of unearned income

12,418,114

12,296,849

11,056,434

11,055,509

11,018,540

Allowance for credit losses

119,920

119,434

118,200

119,496

121,561

Net book value of acquired loans (included in loans and leases above)

926,996

1,076,208

-

-

-

Remaining loan mark on acquired loans

14,485

19,330

-

-

-

Total deposits

13,476,558

13,894,301

11,915,596

11,775,988

11,938,296

Long-term debt

33,214

32,963

30,000

30,000

230,000

Total shareholders' equity

2,072,083

2,060,487

1,713,485

1,700,502

1,691,832







Balance Sheet - Average Balances






Total assets

$    17,094,283

$    16,918,568

$    14,809,497

$    14,710,245

$    14,741,811

Total earning assets

15,496,007

15,374,336

13,678,542

13,591,124

13,636,415

Total securities

2,906,235

2,966,917

2,414,140

2,334,717

2,464,341

Loans and leases, net of unearned income

12,334,756

12,084,020

11,010,187

11,013,270

10,883,102

Total deposits

13,539,324

13,563,510

11,840,049

11,802,682

11,902,415

Long-term debt

33,147

34,433

30,000

162,609

398,132

Total shareholders' equity

2,051,452

2,012,639

1,701,228

1,695,899

1,680,053







Nonperforming Assets:






Non-accrual loans and leases

$           60,045

$           65,303

$           61,891

$           55,796

$           63,585

Loans and leases 90+ days past due, still accruing

6,335

6,519

8,503

1,855

1,793

Restructured loans and leases, still accruing

6,982

9,681

8,060

7,366

6,303

Non-performing loans (NPLs)

73,362

81,503

78,454

65,017

71,681

Other real estate owned

7,828

9,362

6,038

5,956

7,704

Non-performing assets (NPAs)

$           81,190

$           90,865

$           84,492

$           70,973

$           79,385







Financial Ratios and Other Data:






Return on average assets

1.27%

1.28%

1.01%

1.07%

1.03%

Operating return on average assets-excluding MSR*

1.31%

1.29%

0.99%

1.07%

1.06%

Return on average shareholders' equity

10.57%

10.78%

8.75%

9.25%

9.05%

Operating return on average shareholders' equity-excluding MSR*

10.88%

10.80%

8.58%

9.25%

9.27%

Return on tangible equity*

15.00%

15.08%

10.67%

11.36%

11.08%

Operating return on tangible equity-excluding MSR*

15.44%

15.11%

10.46%

11.36%

11.35%

Noninterest income to average assets

1.70%

1.89%

1.69%

1.78%

1.85%

Noninterest expense to average assets

3.41%

3.54%

3.37%

3.42%

3.47%

Net interest margin-fully taxable equivalent

3.71%

3.67%

3.58%

3.58%

3.52%

Net interest margin-fully taxable equivalent, excluding net accretion






  on acquired loans and leases

3.63%

3.60%

N/A

N/A

N/A

Net interest rate spread

3.52%

3.52%

3.44%

3.45%

3.40%

Efficiency ratio (tax equivalent)*

67.31%

67.66%

67.45%

67.23%

67.90%

Operating efficiency ratio-excluding MSR (tax equivalent)*

66.36%

66.79%

68.16%

67.24%

67.33%

Loan/deposit ratio

92.15%

88.50%

92.79%

93.88%

92.30%

Price to earnings multiple (avg)

17.07

17.77

18.95

19.42

18.83

Market value to book value

156.95%

153.77%

165.76%

170.25%

164.07%

Market value to book value (avg)

159.33%

159.14%

169.35%

158.92%

161.24%

Market value to tangible book value

225.06%

220.18%

203.64%

209.66%

202.52%

Market value to tangible book value (avg)

228.47%

227.87%

208.04%

195.70%

199.07%

Employee FTE

4,366

4,305

3,947

3,950

3,989







*Denotes non-GAAP financial measure.  Refer to related disclosure and reconciliation on pages 21 and 22.














BancorpSouth Bank

Selected Financial Information

(Dollars in thousands, except per share data)

(Unaudited)




Quarter Ended

Quarter Ended

Quarter Ended

Quarter Ended

Quarter Ended


6/30/2018

3/31/2018

12/31/2017

9/30/2017

6/30/2017







Credit Quality Ratios:






Net charge-offs(recoveries) to average loans and leases (annualized)

0.07%

(0.01%)

0.06%

0.09%

0.17%

Provision for credit losses to average loans and leases (annualized)

0.08%

0.03%

0.02%

0.02%

0.04%

Allowance for credit losses to net loans and leases

0.97%

0.97%

1.07%

1.08%

1.10%

Allowance for credit losses to net loans and leases, excluding acquired loans and leases

1.05%

1.07%

N/A

N/A

N/A

Allowance for credit losses to non-performing loans and leases

163.46%

146.54%

150.66%

183.79%

169.59%

Allowance for credit losses to non-performing assets

147.70%

131.44%

139.89%

168.37%

153.13%

Non-performing loans and leases to net loans and leases

0.59%

0.66%

0.71%

0.59%

0.65%

Non-performing assets to net loans and leases

0.65%

0.74%

0.76%

0.64%

0.72%







Equity Ratios:






Total shareholders' equity to total assets

12.03%

11.99%

11.20%

11.52%

11.40%

Tangible shareholders' equity to tangible assets*

8.71%

8.69%

9.31%

9.56%

9.44%













Capital Adequacy:






Common  Equity Tier 1 capital

11.42%

11.30%

12.15%

12.04%

11.90%

Tier 1 capital

11.42%

11.30%

12.15%

12.04%

11.90%

Total capital

12.30%

12.18%

13.13%

13.03%

12.91%

Tier 1 leverage capital

9.38%

9.39%

10.12%

10.02%

9.93%

   Estimated for current quarter












Common Share Data:






Basic earnings per share

$               0.55

$               0.54

$               0.42

$               0.43

$               0.41

Diluted earnings per share

0.55

0.54

0.41

0.43

0.41

Operating earnings per share*

0.56

0.58

0.42

0.43

0.41

Operating earnings per share- excluding MSR*

0.56

0.54

0.41

0.43

0.42

Cash dividends per share

0.14

0.14

0.14

0.14

0.13

Book value per share

20.99

20.68

18.97

18.83

18.59

Tangible book value per share*

14.64

14.44

15.44

15.29

15.06

Market value per share (last)

32.95

31.80

31.45

32.05

30.50

Market value per share (high)

35.45

35.55

34.45

32.70

31.85

Market value per share (low)

30.60

30.90

30.25

27.20

28.20

Market value per share (avg)

33.45

32.91

32.13

29.92

29.98

Dividend payout ratio

25.62%

25.85%

33.70%

32.20%

30.48%

Total shares outstanding

98,700,509

99,636,779

90,312,378

90,329,896

91,022,729

Average shares outstanding - basic

98,906,619

98,765,789

90,321,137

90,911,702

91,366,309

Average shares outstanding - diluted

99,057,054

98,942,268

90,546,824

91,099,770

91,530,552













Yield/Rate:






(Taxable equivalent basis)






Loans, loans held for sale, and leases net of unearned income

4.67%

4.60%

4.36%

4.33%

4.27%

Loans, loans held for sale, and leases net of unearned income, excluding






  net accretion on acquired loans and leases

4.57%

4.51%

N/A

N/A

N/A

Available-for-sale securities:






  Taxable

1.77%

1.72%

1.48%

1.41%

1.37%

  Tax-exempt

4.39%

4.30%

5.29%

5.25%

5.26%

Short-term, FHLB and other equity investments

2.02%

1.54%

1.27%

1.22%

1.01%

  Total interest earning assets and revenue

4.15%

4.05%

3.90%

3.89%

3.80%

Deposits

0.34%

0.31%

0.27%

0.26%

0.25%

  Demand - interest bearing

0.43%

0.36%

0.29%

0.28%

0.25%

  Savings

0.15%

0.13%

0.13%

0.12%

0.12%

  Other time

0.95%

0.89%

0.86%

0.84%

0.81%

Short-term borrowings

1.62%

1.25%

0.96%

0.85%

0.69%

Total interest bearing deposits and short-term borrowings

0.62%

0.51%

0.45%

0.41%

0.37%

Long-term debt

4.11%

4.17%

4.05%

1.79%

1.01%

  Total interest bearing liabilities and expense

0.63%

0.53%

0.46%

0.44%

0.40%

Interest bearing liabilities to interest earning assets

70.27%

70.91%

69.09%

69.55%

69.68%

Net interest tax equivalent adjustment

$             1,119

$             1,205

$             2,155

$             2,237

$             2,248







*Denotes non-GAAP financial measure.  Refer to related disclosure and reconciliation on pages 21 and 22.

  



















BancorpSouth Bank



Consolidated Balance Sheets



(Unaudited)













Jun-18

Mar-18

Dec-17

Sep-17

Jun-17





(Dollars in thousands)




Assets









Cash and due from banks

$                198,374

$                180,104

$                167,283

$                167,871

$                178,376




Interest bearing deposits with other banks









and Federal funds sold

152,566

127,345

53,440

52,316

49,680




Available-for-sale securities, at fair value

2,828,754

2,989,767

2,798,542

2,326,900

2,388,392




Loans and leases

12,433,152

12,312,346

11,072,062

11,073,306

11,037,808




  Less:  Unearned income

15,038

15,497

15,628

17,797

19,268




             Allowance for credit losses

119,920

119,434

118,200

119,496

121,561




Net loans and leases

12,298,194

12,177,415

10,938,234

10,936,013

10,896,979




Loans held for sale

153,396

141,979

136,577

138,353

184,921




Premises and equipment, net

339,372

342,353

314,362

311,530

306,863




Accrued interest receivable

51,921

52,856

45,671

44,454

40,716




Goodwill

588,004

580,900

300,798

300,798

300,798




Other identifiable intangibles

39,031

40,590

17,882

18,860

19,854




Bank owned life insurance

306,116

304,850

292,069

259,361

260,228




Other real estate owned

7,828

9,362

6,038

5,956

7,704




Other assets

258,935

238,251

227,622

197,982

208,619




Total Assets

$           17,222,491

$           17,185,772

$           15,298,518

$           14,760,394

$           14,843,130




Liabilities









Deposits:









  Demand:  Noninterest bearing

$             4,135,322

$             4,035,830

$             3,453,000

$             3,414,397

$             3,390,428




                  Interest bearing

5,509,901

5,945,359

5,066,614

4,925,127

5,095,570




  Savings

1,810,149

1,843,264

1,638,799

1,638,033

1,630,123




  Other time

2,021,186

2,069,848

1,757,183

1,798,431

1,822,175




Total deposits

13,476,558

13,894,301

11,915,596

11,775,988

11,938,296




Securities sold under agreement to repurchase

407,704

469,114

417,867

421,044

399,815




Federal funds purchased









   and other short-term borrowing

1,025,022

500,000

1,025,000

625,000

365,000




Accrued interest payable

5,961

5,525

4,882

4,826

4,259




Long-term debt

33,214

32,963

30,000

30,000

230,000




Other liabilities

201,949

223,382

191,688

203,034

213,928




Total Liabilities

15,150,408

15,125,285

13,585,033

13,059,892

13,151,298




Shareholders' Equity









Common stock

246,751

249,092

225,781

225,825

227,557




Capital surplus

441,950

465,699

177,624

175,837

191,940




Accumulated other comprehensive loss

(88,751)

(85,994)

(63,843)

(50,203)

(49,861)




Retained earnings

1,472,133

1,431,690

1,373,923

1,349,043

1,322,196




Total Shareholders' Equity

2,072,083

2,060,487

1,713,485

1,700,502

1,691,832




Total Liabilities & Shareholders' Equity

$           17,222,491

$           17,185,772

$           15,298,518

$           14,760,394

$           14,843,130








































  



















BancorpSouth Bank



Consolidated Average Balance Sheets



(Unaudited)













Jun-18

Mar-18

Dec-17

Sep-17

Jun-17





(Dollars in thousands)




Assets









Cash and due from banks

$       203,220

$       202,141

$       154,843

$       153,797

$       156,387




Interest bearing deposits with other banks









and Federal funds sold

66,035

182,488

108,880

83,109

117,414




Available-for-sale securities, at fair value

2,906,235

2,966,917

2,414,140

2,334,717

2,464,341




Loans and leases

12,350,226

12,099,694

11,026,437

11,032,159

10,903,524




  Less:  Unearned income

15,470

15,674

16,250

18,889

20,422




             Allowance for credit losses

119,622

118,840

119,124

121,501

125,578




Net loans and leases

12,215,134

11,965,180

10,891,063

10,891,769

10,757,524




Loans held for sale

144,400

98,662

112,118

127,112

138,792




Premises and equipment, net

342,395

343,098

313,874

309,592

306,483




Accrued interest receivable

48,767

47,770

40,228

40,100

38,702




Goodwill

583,188

544,840

300,798

300,798

300,798




Other identifiable intangibles

39,752

17,811

18,231

19,222

20,218




Bank owned life insurance

305,016

301,982

265,761

261,100

259,182




Other real estate owned

8,997

9,300

5,777

6,985

7,860




Other assets

231,144

238,379

183,784

181,944

174,110




Total Assets

$  17,094,283

$  16,918,568

$  14,809,497

$  14,710,245

$  14,741,811




Liabilities









Deposits:









  Demand:  Noninterest bearing

$    3,976,039

$    3,822,216

$    3,479,771

$    3,369,468

$    3,362,801




                  Interest bearing

5,697,444

5,898,269

4,949,183

4,985,113

5,079,388




  Savings

1,820,013

1,801,128

1,631,617

1,634,577

1,626,996




  Other time

2,045,828

2,041,897

1,779,478

1,813,524

1,833,230




Total deposits

13,539,324

13,563,510

11,840,049

11,802,682

11,902,415




Securities sold under agreement to repurchase

416,839

445,840

471,581

444,999

412,825




Federal funds purchased









   and other short-term borrowing

875,641

667,546

589,261

411,815

151,352




Accrued interest payable

5,600

5,177

4,718

4,507

4,028




Long-term debt

33,147

34,433

30,000

162,609

398,132




Other liabilities

172,280

189,423

172,660

187,734

193,006




Total Liabilities

15,042,831

14,905,929

13,108,269

13,014,346

13,061,758




Shareholders' Equity









Common stock

247,120

247,189

225,808

227,247

228,322




Capital surplus

444,379

447,576

176,613

189,545

199,115




Accumulated other comprehensive loss

(88,962)

(71,205)

(55,181)

(48,591)

(49,185)




Retained earnings

1,448,915

1,389,079

1,353,988

1,327,698

1,301,801




Total Shareholders' Equity

2,051,452

2,012,639

1,701,228

1,695,899

1,680,053




Total Liabilities & Shareholders' Equity

$  17,094,283

$  16,918,568

$  14,809,497

$  14,710,245

$  14,741,811














  













BancorpSouth Bank



Consolidated Condensed Statements of Income



(Dollars in thousands, except per share data)



(Unaudited)
















Quarter Ended





Jun-18


Mar-18


Dec-17


Sep-17


Jun-17



INTEREST REVENUE:












Loans and leases

$ 143,029


$ 136,568


$ 120,381


$ 119,599


$ 115,286



Deposits with other banks

331


664


300


214


256



Federal funds sold, securities purchased












   under agreement to resell, FHLB and 












      other equity investments

226


191


157


143


121



Available-for-sale securities:












    Taxable

11,554


11,313


7,957


7,235


7,388



    Tax-exempt

2,435


2,504


2,417


2,514


2,562



Loans held for sale

1,715


955


1,064


1,229


1,242



        Total interest revenue

159,290


152,195


132,276


130,934


126,855















INTEREST EXPENSE:












Interest bearing demand

6,075


5,278


3,645


3,482


3,204



Savings

667


584


517


494


483



Other time

4,862


4,457


3,853


3,819


3,725



Federal funds purchased and securities sold












   under agreement to repurchase

1,898


1,341


930


754


509



Short-term and long-term debt

3,660


2,455


1,943


1,824


1,456



Other

-


2


2


-


-



        Total interest expense

17,162


14,117


10,890


10,373


9,377















        Net interest revenue

142,128


138,078


121,386


120,561


117,478



  Provision for credit losses

2,500


1,000


500


500


1,000



        Net interest revenue, after provision for












          credit losses

139,628


137,078


120,886


120,061


116,478















NONINTEREST REVENUE:












Mortgage banking

6,904


13,265


7,246


6,909


6,134



Credit card, debit card and merchant fees

10,530


9,564


9,530


9,346


9,565



Deposit service charges

10,767


10,901


10,257


10,388


9,706



Security gains, net

(2)


27


523


5


23



Insurance commissions

32,965


29,130


25,758


28,616


31,126



Wealth management

5,745


5,697


5,619


5,386


5,275



Other

5,547


10,350


4,141


5,310


6,301



        Total noninterest revenue

72,456


78,934


63,074


65,960


68,130















NONINTEREST EXPENSE:












Salaries and employee benefits

91,451


91,197


77,268


80,541


80,723



Occupancy, net of rental income

11,103


10,804


10,064


10,343


10,455



Equipment

3,804


3,754


3,710


3,352


3,438



Deposit insurance assessments

3,129


2,360


2,659


2,499


2,261



Other

35,695


39,586


32,180


30,168


30,676



        Total noninterest expense

145,182


147,701


125,881


126,903


127,553



        Income before income taxes

66,902


68,311


58,079


59,118


57,055



Income tax expense

12,856


14,820


20,556


19,590


19,166



        Net income

$  54,046


$  53,491


$  37,523


$  39,528


$  37,889















Net income per share: Basic

$      0.55


$      0.54


$      0.42


$      0.43


$      0.41



                                  Diluted

$      0.55


$      0.54


$      0.41


$      0.43


$      0.41











































































  











BancorpSouth Bank

Selected Loan Data

(Dollars in thousands)

(Unaudited)












Quarter Ended


Jun-18


Mar-18


Dec-17


Sep-17


Jun-17

LOAN AND LEASE PORTFOLIO:










Commercial and industrial

$  1,668,174


$  1,695,718


$  1,480,279


$  1,506,352


$  1,566,459

Real estate










   Consumer mortgages

3,143,215


3,000,479


2,864,623


2,826,333


2,776,213

   Home equity

653,450


655,634


638,394


626,961


624,868

   Agricultural

315,828


313,470


243,449


247,211


245,646

   Commercial and industrial-owner occupied

2,147,176


2,102,493


1,846,085


1,835,430


1,795,321

   Construction, acquisition and development

1,346,370


1,377,153


1,153,187


1,175,979


1,156,901

   Commercial real estate

2,636,533


2,640,503


2,345,231


2,336,219


2,341,633

Credit cards

102,790


102,114


107,848


104,613


104,169

All other

404,578


409,285


377,338


396,411


407,330

     Total loans

$ 12,418,114


$ 12,296,849


$ 11,056,434


$ 11,055,509


$ 11,018,540











ALLOWANCE FOR CREDIT LOSSES:










Balance, beginning of period

$     119,434


$     118,200


$     119,496


$     121,561


$     125,196











Loans and leases charged-off:










Commercial and industrial

(1,057)


(484)


(1,234)


(1,963)


(3,773)

Real estate










   Consumer mortgages

(366)


(134)


(773)


(1,193)


(522)

   Home equity

(107)


(143)


(95)


(439)


(125)

   Agricultural

(6)


(12)


(5)


(54)


(6)

   Commercial and industrial-owner occupied

(279)


(41)


(720)


(20)


(1,460)

   Construction, acquisition and development

(66)


(163)


(206)


(29)


(54)

   Commercial real estate

(946)


(35)


(159)


(49)


(1)

Credit cards

(830)


(794)


(849)


(745)


(781)

All other

(551)


(725)


(627)


(711)


(591)

     Total loans charged-off

(4,208)


(2,531)


(4,668)


(5,203)


(7,313)











Recoveries:










Commercial and industrial

684


372


599


481


1,034

Real estate










   Consumer mortgages

361


95


755


642


339

   Home equity

72


333


69


378


110

   Agricultural

10


79


7


77


34

   Commercial and industrial-owner occupied

46


80


391


285


481

   Construction, acquisition and development

308


1,262


483


260


208

   Commercial real estate

149


53


98


151


75

Credit cards

367


220


218


177


205

All other

197


271


252


187


192

     Total recoveries

2,194

-

2,765

-

2,872

-

2,638

-

2,678











Net (charge-offs)recoveries 

(2,014)


234


(1,796)


(2,565)


(4,635)











Provision charged to operating expense

2,500


1,000


500


500


1,000

Balance, end of period

$     119,920


$     119,434


$     118,200


$     119,496


$     121,561











Average loans for period

$ 12,334,756


$ 12,084,020


$ 11,010,187


$ 11,013,270


$ 10,883,102











Ratio:










Net charge-offs(recoveries) to average loans (annualized)

0.07%


(0.01%)


0.06%


0.09%


0.17%





















  














BancorpSouth Bank




Selected Loan Data




(Dollars in thousands)




(Unaudited)


















Quarter Ended





Jun-18


Mar-18


Dec-17


Sep-17


Jun-17




NON-PERFORMING ASSETS













NON-PERFORMING LOANS AND LEASES:













  Nonaccrual Loans and Leases













    Commercial and industrial

$ 11,090


$ 11,122


$ 10,178


$  8,776


$  9,988




    Real estate













       Consumer mortgages

22,588


26,832


22,988


23,635


24,690




       Home equity

2,446


2,587


2,956


2,555


3,183




       Agricultural

1,536


6,225


6,160


5,919


6,172




       Commercial and industrial-owner occupied

12,275


12,210


12,585


7,558


10,215




       Construction, acquisition and development

1,563


2,223


2,197


1,771


2,223




       Commercial real estate

8,265


3,597


4,318


4,645


6,418




    Credit cards

104


136


74


126


122




    All other

178


371


435


811


574




         Total nonaccrual loans and leases

$ 60,045


$ 65,303


$ 61,891


$ 55,796


$ 63,585

















  Loans and Leases 90+ Days Past Due, Still Accruing:

6,335


6,519


8,503


1,855


1,793




  Restructured Loans and Leases, Still Accruing

6,982


9,681


8,060


7,366


6,303




     Total non-performing loans and leases

$ 73,362


$ 81,503


$ 78,454


$ 65,017


$ 71,681

















OTHER REAL ESTATE OWNED:

7,828


9,362


6,038


5,956


7,704

















Total Non-performing Assets

$ 81,190


$ 90,865


$ 84,492


$ 70,973


$ 79,385

















Additions to Nonaccrual Loans and Leases During the Quarter

$ 16,902


$ 16,641


$ 20,799


$ 16,975


$ 17,020

















  Loans and Leases 30-89 Days Past Due, Still Accruing:













    Commercial and industrial

$  7,540


$  5,020


$  1,990


$  3,791


$  3,304




    Real estate













       Consumer mortgages

16,242


17,076


15,080


18,603


12,395




       Home equity

2,231


1,768


1,858


2,042


2,590




       Agricultural

6,415


295


191


476


197




       Commercial and industrial-owner occupied

2,338


4,356


1,655


4,453


2,228




       Construction, acquisition and development

1,240


2,215


1,386


4,464


2,639




       Commercial real estate

816


679


1,200


1,206


1,183




    Credit cards

778


705


851


720


705




    All other

1,435


733


951


699


1,203




         Total Loans and Leases 30-89 days past due, still accruing

$ 39,035


$ 32,847


$ 25,162


$ 36,454


$ 26,444

















Credit Quality Ratios:













Provision for credit losses to average loans and leases (annualized)

0.08%


0.03%


0.02%


0.02%


0.04%




Allowance for credit losses to net loans and leases

0.97%


0.97%


1.07%


1.08%


1.10%




Allowance for credit losses to non-performing loans and leases

163.46%


146.54%


150.66%


183.79%


169.59%




Allowance for credit losses to non-performing assets

147.70%


131.44%


139.89%


168.37%


153.13%




Non-performing loans and leases to net loans and leases

0.59%


0.66%


0.71%


0.59%


0.65%




Non-performing assets to net loans and leases

0.65%


0.74%


0.76%


0.64%


0.72%


















  






















BancorpSouth Bank












Selected Loan Data












(Dollars in thousands)












(Unaudited)


































June 30, 2018









Special










Purchased









Pass


Mention


Substandard


Doubtful


Loss


Impaired


Credit Impaired


Total






LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE:





















Commercial and industrial

$  1,609,943


$       -


$     51,862


$    858


$  -


$  5,347


$              164


$  1,668,174






Real estate





















   Consumer mortgages

3,084,706


-


54,775


180


-


3,554


-


3,143,215






   Home equity

644,893


-


8,281


-


-


276


-


653,450






   Agricultural

297,506


-


15,080


-


-


228


3,014


315,828






   Commercial and industrial-owner occupied

2,079,866


-


57,429


-


-


7,964


1,917


2,147,176






   Construction, acquisition and development

1,329,372


-


16,569


-


-


424


5


1,346,370






   Commercial real estate

2,594,808


-


35,424


-


-


6,301


-


2,636,533






Credit cards

102,790


-


-


-


-


-


-


102,790






All other

393,765


-


10,813


-


-


-


-


404,578






     Total loans

$ 12,137,649


$       -


$   250,233


$ 1,038


$  -


$ 24,094


$            5,100


$ 12,418,114

















































March 31, 2018









Special










Purchased









Pass


Mention


Substandard


Doubtful


Loss


Impaired


Credit Impaired


Total






LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE:





















Commercial and industrial

$  1,646,715


$       -


$     41,194


$    599


$  -


$  6,549


$              661


$  1,695,718






Real estate





















   Consumer mortgages

2,934,287


-


61,049


181


-


4,962


-


3,000,479






   Home equity

647,562


-


7,791


-


-


281


-


655,634






   Agricultural

296,260


-


9,557


-


-


4,744


2,909


313,470






   Commercial and industrial-owner occupied

2,025,321


-


67,204


-


-


8,150


1,818


2,102,493






   Construction, acquisition and development

1,360,548


-


16,087


-


-


518


-


1,377,153






   Commercial real estate

2,598,283


1,207


39,395


-


-


1,618


-


2,640,503






Credit cards

102,114


-


-


-


-


-


-


102,114






All other

399,205


-


10,080


-


-


-


-


409,285






     Total loans

$ 12,010,295


$ 1,207


$   252,357


$    780


$  -


$ 26,822


$            5,388


$ 12,296,849




























  





















BancorpSouth Bank



Geographical Information



(Dollars in thousands)



(Unaudited)
























June 30, 2018




Alabama




















and Florida




















Panhandle


Arkansas


Louisiana


Mississippi


Missouri


Tennessee


Texas


Other


Total



LOAN AND LEASE PORTFOLIO:




















Commercial and industrial

$   108,863


$   157,532


$   288,909


$   581,187


$  78,691


$   104,027


$   312,245


$  36,720


$  1,668,174



Real estate




















   Consumer mortgages

425,740


338,448


316,997


874,822


93,044


331,427


649,749


112,988


3,143,215



   Home equity

98,027


48,025


89,283


231,900


20,345


143,382


20,700


1,788


653,450



   Agricultural

8,330


86,002


38,186


69,253


6,192


11,751


96,114


-


315,828



   Commercial and industrial-owner occupied

204,044


207,077


334,836


747,080


50,762


154,312


449,065


-


2,147,176



   Construction, acquisition and development

103,155


85,836


108,039


338,837


17,269


184,188


509,046


-


1,346,370



   Commercial real estate

315,605


339,100


366,568


550,501


209,819


209,919


645,021


-


2,636,533



Credit cards

-


-


-


-


-


-


-


102,790


102,790



All other

44,640


40,282


28,523


189,663


2,730


20,971


71,781


5,988


404,578



     Total loans

$ 1,308,404


$ 1,302,302


$ 1,571,341


$ 3,583,243


$ 478,852


$ 1,159,977


$ 2,753,721


$ 260,274


$ 12,418,114























NON-PERFORMING LOANS AND LEASES:




















Commercial and industrial

$           93


$         503


946


$       3,586


$    3,709


$         164


$       2,163


$       879


$       12,043



Real estate




















   Consumer mortgages

2,481


3,862


4873


9,962


-


3,274


4,245


1,028


29,725



   Home equity

404


214


877


722


70


149


51


2


2,489



   Agricultural

50


758


5


379


-


-


692


-


1,884



   Commercial and industrial-owner occupied

42


1,220


940


4,129


4,160


967


2,848


-


14,306



   Construction, acquisition and development

38


640


294


256


-


-


476


-


1,704



   Commercial real estate

577


456


6727


1,665


-


-


42


-


9,467



Credit cards

-


-


-


-


-


-


-


1,133


1,133



All other

10


-


6


441


-


150


4


-


611



     Total loans

$       3,695


$       7,653


$     14,668


$     21,140


$    7,939


$       4,704


$     10,521


$    3,042


$       73,362























NON-PERFORMING LOANS AND LEASES




















   AS A PERCENTAGE OF OUTSTANDING:




















Commercial and industrial

0.09%


0.32%


0.33%


0.62%


4.71%


0.16%


0.69%


2.39%


0.72%



Real estate




















   Consumer mortgages

0.58%


1.14%


1.54%


1.14%


0.00%


0.99%


0.65%


0.91%


0.95%



   Home equity

0.41%


0.45%


0.98%


0.31%


0.34%


0.10%


0.25%


0.11%


0.38%



   Agricultural

0.60%


0.88%


0.01%


0.55%


0.00%


0.00%


0.72%


N/A


0.60%



   Commercial and industrial-owner occupied

0.02%


0.59%


0.28%


0.55%


8.20%


0.63%


0.63%


N/A


0.67%



   Construction, acquisition and development

0.04%


0.75%


0.27%


0.08%


0.00%


0.00%


0.09%


N/A


0.13%



   Commercial real estate

0.18%


0.13%


1.84%


0.30%


0.00%


0.00%


0.01%


N/A


0.36%



Credit cards

N/A


N/A


N/A


N/A


N/A


N/A


N/A


1.10%


1.10%



All other

0.02%


0.00%


0.02%


0.23%


0.00%


0.72%


0.01%


0.00%


0.15%



     Total loans

0.28%


0.59%


0.93%


0.59%


1.66%


0.41%


0.38%


1.17%


0.59%
























  







BancorpSouth Bank


Acquired Loan Information


(Dollars in thousands)


(Unaudited)













Quarter Ended June 30, 2018








Acquired Loans
Accounted for Under
ASC 310-20

Acquired Loans
Accounted for
Under ASC 310-30

Total Acquired Loans







Net book value of acquired loans at beginning of period

$                        1,070,820

$                              5,388

$     1,076,208


Fair value of loans acquired during the period

-

-

-


Reductions in acquired loans

(148,925)

(287)

(149,212)


Net book value of acquired loans at end of period

$                          921,895

$                              5,101

$       926,996












Loan mark on acquired loans at beginning of period

$                           (13,098)

$                            (6,231)

$        (19,329)


Loan mark recorded on loans acquired during the period

-

-

-


Change in nonaccretable difference (for ASC 310-30 loans only)

 N/A 

2,163

2,163


Net accretion recognized on acquired loans

2,683

325

3,008


Other adjustments to accretable yield

(487)

160

(327)


Remaining loan mark on acquired loans*

$                           (10,902)

$                            (3,583)

$        (14,485)








Quarter Ended March 31, 2018








Acquired Loans
Accounted for Under
ASC 310-20

Acquired Loans
Accounted for
Under ASC 310-30

Total Acquired Loans







Net book value of acquired loans at beginning of period

$                                    -

$                                    -

$                 -


Fair value of loans acquired during the period

1,179,376

6,706

1,186,082


Reductions in acquired loans

(108,556)

(1,318)

(109,874)


Net book value of acquired loans at end of period

$                        1,070,820

$                              5,388

$     1,076,208












Loan mark on acquired loans at beginning of period

$                                    -

$                                    -

$                 -


Loan mark recorded on loans acquired during the period

(15,621)

(6,359)

(21,980)


Change in nonaccretable difference (for ASC 310-30 loans only)

 N/A 

-

-


Net accretion recognized on acquired loans

2,523

128

2,651


Remaining loan mark on acquired loans

$                           (13,098)

$                            (6,231)

$        (19,329)













Quarter Ended

Quarter Ended




6/30/2018

3/31/2018



Loan yield, as reported

4.67%

4.60%








Loan yield, excluding net accretion on acquired loans

4.57%

4.51%








Net interest margin, as reported

3.71%

3.67%








Net interest margin, excluding net accretion on acquired loans 

3.63%

3.60%








* The remaining loan mark shown above for loans accounted for under ASC 310-30 includes $424 thousand in accretable 


yield as of June 30, 2018 compared to $895 thousand in accretable yield as of March 31, 2018. In addition, the same loans


include $3.2 million in nonaccretable difference as of June 30, 2018 compared to $5.3 million as of March 31, 2018.


  














BancorpSouth Bank




Noninterest Revenue and Expense




(Dollars in thousands)




(Unaudited)


















Quarter Ended






Jun-18


Mar-18


Dec-17


Sep-17


Jun-17




NONINTEREST REVENUE:













Mortgage banking excl. MSR and MSR Hedge market value adj

$    7,105


$    7,732


$    4,868


$    6,955


$    7,643




MSR and MSR Hedge market value adjustment

(201)


5,533


2,378


(46)


(1,509)




Credit card, debit card and merchant fees

10,530


9,564


9,530


9,346


9,565




Deposit service charges

10,767


10,901


10,257


10,388


9,706




Securities gains, net

(2)


27


523


5


23




Insurance commissions

32,965


29,130


25,758


28,616


31,126




Trust income

3,850


3,848


3,985


3,803


3,679




Annuity fees

357


297


216


246


264




Brokerage commissions and fees

1,538


1,552


1,418


1,337


1,332




Bank-owned life insurance

3,259


1,947


1,732


2,700


1,710




Other miscellaneous income

2,288


8,403


2,409


2,610


4,591




     Total noninterest revenue

$  72,456


$  78,934


$  63,074


$  65,960


$  68,130

















NONINTEREST EXPENSE:













Salaries and employee benefits

$  91,451


$  91,197


$  77,268


$  80,541


$  80,723




Occupancy, net of rental income

11,103


10,804


10,064


10,343


10,455




Equipment

3,804


3,754


3,710


3,352


3,438




Deposit insurance assessments

3,129


2,360


2,659


2,499


2,261




Advertising

1,226


855


1,671


1,185


1,037




Foreclosed property expense

997


366


1,035


447


960




Telecommunications

1,327


1,217


1,219


1,192


1,233




Public relations

829


794


705


675


654




Data processing

7,970


7,360


6,855


6,942


7,230




Computer software

3,624


3,336


3,172


3,074


2,913




Amortization of intangibles

1,559


1,602


979


994


1,010




Legal

1,568


691


1,326


1,016


1,330




Merger expense

1,911


5,727


688


-


-




Postage and shipping

1,151


1,237


1,092


1,050


1,080




Other miscellaneous expense

13,533


16,401


13,438


13,593


13,229




     Total noninterest expense

$ 145,182


$ 147,701


$ 125,881


$ 126,903


$ 127,553

















INSURANCE COMMISSIONS:













Property and casualty commissions

$  23,041


$  20,100


$  18,667


$  21,086


$  22,363




Life and health commissions

6,753


5,943


5,900


6,134


6,623




Risk management income

605


750


608


703


600




Other

2,566


2,337


583


693


1,540




     Total insurance commissions

$  32,965


$  29,130


$  25,758


$  28,616


$  31,126


















  



















BancorpSouth Bank









Selected Additional Information









(Dollars in thousands)









(Unaudited)




























Quarter Ended










Jun-18


Mar-18


Dec-17


Sep-17


Jun-17









MORTGAGE SERVICING RIGHTS:


















Fair value, beginning of period

$     75,206


$     69,190


$     66,417


$     65,491


$     67,161









Additions to mortgage servicing rights:


















   Originations of servicing assets

3,516


2,683


3,011


3,393


2,772









Changes in fair value:


















   Due to payoffs/paydowns

(2,916)