Attached files
| file | filename |
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| 8-K - FORM 8-K - BANCORPSOUTH INC | d284119d8k.htm |
| EX-99.1 - PRESS RELEASE - BANCORPSOUTH INC | d284119dex991.htm |
 1
BancorpSouth, Inc.
Common Stock Offering
January 2012
Exhibit 99.2 |
 Forward Looking Information
2
Certain
statements
contained
in
this
presentation
and
the
accompanying
slides
may
not
be
based
on
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
reference
to
a
future
period
or
by
the
use
of
forward-looking
terminology,
such
as
“anticipate,”
“believe,”
“estimate,”
“expect,”
“foresee,”
“may,”
“might,”
“will,”
“intend,”
“could,”
“would”
or
“plan,”
or
future
or
conditional
verb
tenses,
and
variations
or
negatives
of
such
terms.
These
forward-looking
statements
include,
without
limitation,
statements
about
the
use
of
proceeds
from
the
offering,
pricing
of
the
offering,
impact
of
the
proceeds
from
the
offering
on
our
capital,
deposit
composition,
trends
in
the
deposit
base,
the
maturity
of
our
CDs,
results
of
operations
and
financial
condition.
We
caution
you
not
to
place
undue
reliance
on
the
forward-looking
statements
contained
in
this
presentation,
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
include,
but
are
not
limited
to,
conditions
in
the
financial
markets
and
economic
conditions
generally,
including
the
downgrade
of
sovereign
credit
ratings
and
the
debt
crisis
in
Europe,
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,
the
impact
of
legal
or
administrative
proceedings,
the
availability
of
capital
on
favorable
terms
if
and
when
needed,
liquidity
risk,
the
Company’s
ability
to
improve
its
internal
controls
adequately,
governmental
regulation,
including
the
Dodd
Frank
Act,
and
supervision
of
the
Company’s
operations,
the
impact
of
regulations
on
service
charges
on
the
Company’s
core
deposit
accounts,
the
susceptibility
of
the
Company’s
business
to
local
economic
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
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,
competition
with
other
financial
services
companies,
risks
in
connection
with
completed
or
potential
acquisitions,
the
Company’s
growth
strategy,
interruptions
or
breaches
in
security
of
the
Company’s
information
systems,
the
failure
of
certain
third
party
vendors
to
perform,
limitations
on
the
Company’s
ability
to
declare
and
pay
dividends,
dilution
caused
by
the
Company’s
issuance
of
any
additional
shares
of
its
common
stock
to
raise
capital
or
acquire
other
banks,
bank
holding
companies,
financial
holding
companies
and
insurance
agencies,
other
factors
generally
understood
to
affect
the
financial
results
of
financial
services
companies
and
other
factors
detailed
from
time
to
time
in
the
Company’s
press
releases
and
filings
with
the
Securities
and
Exchange
Commission.
Forward-looking
statements
speak
only
as
of
the
date
they
were
made,
and,
except
as
required
by
law,
we
do
not
undertake
any
obligation
to
update
or
revise
forward-looking
statements
to
reflect
events
or
circumstances
after
the
date
of
this
presentation.
Certain
tabular
presentations
may
not
reconcile
because
of
rounding.
Unless
otherwise
noted,
any
quotes
in
this
presentation
can
be
attributed
to
company
management. |
 Rule
433 Legend 3
This
presentation
is
for
informational
purposes
only
and
does
not
constitute
an
offer
to
sell
securities.
The
Company
has
filed
a
registration
statement
(including
a
prospectus)
with
the
Securities
and
Exchange
Commission
for
the
offering
to
which
this
communication
relates.
Before
you
invest,
you
should
read
the
prospectus,
all
supplements
to
the
prospectus,
and
other
documents
the
Company
has
filed
with
the
SEC
for
more
complete
information
about
the
Company
and
this
offering.
You
may
get
these
documents
for
free
by
visiting
EDGAR
on
the
SEC
website
at
www.sec.gov.
Alternatively,
the
Company,
any
underwriter
or
any
dealer
participating
in
the
offering
will
arrange
to
send
you
the
prospectus,
including
any
supplements,
if
you
request
it
by
contacting
Stifel,
Nicolaus
&
Company,
Incorporated,
One
South
Street,
15th
Floor,
Baltimore,
MD
21202,
telephone:
(443)
224-1988
or
email
at
SyndicateOps@Stifel.com
or
by
contacting
the
Morgan
Stanley
Prospectus
Department
at
180
Varick
Street,
2
Floor,
New
York,
New
York
10014,
telephone:
(866)
718-1649
or
email
at
prospectus@morganstanley.com.
nd |
 This
presentation
contains
financial
information
determined
by
methods
other
than
those
prescribed
by
accounting
principles
generally
accepted
in
the
United
States
("GAAP').
Management
uses
these
"non-GAAP"
financial
measures
in
its
analysis
of
the
Company's
capital
and
performance.
Management
believes
that
the
ratio
of
tangible
shareholders’
equity
to
tangible
assets
is
important
to
investors
who
are
interested
in
evaluating
the
adequacy
of
the
Company's
capital
levels.
Management
believes
that
tangible
book
value
per
share
is
important
to
investors
who
are
interested
in
changes
from
period
to
period
in
book
value
per
share
exclusive
of
changes
in
tangible
assets.
You
should
not
view
these
disclosures
as
a
substitute
for
results
determined
in
accordance
with
GAAP,
and
they
are
not
necessarily
comparable
to
non-GAAP
measures
used
by
other
companies.
The
limitations
associated
with
these
measures
are
the
risks
that
persons
might
disagree
as
to
the
appropriateness
of
items
comprising
these
measures
and
that
different
companies
might
calculate
these
measures
differently.
Information
provided
in
the
Appendix
of
this
presentation
reconciles
these
non-GAAP
measures
with
comparable
measures
calculated
in
accordance
with
GAAP.
Non-GAAP Financial Disclaimer
4 |
 Offering Overview
5
Issuer:
BancorpSouth, Inc.
Exchange/Ticker:
NYSE: BXS
Security Offered:
Common stock
Closing Price:
$12.32 per share (as of 1/13/12)
Offering Size:
$100 million
Over-Allotment Option:
15%
Use of Proceeds:
General corporate purposes, including to maintain certain capital
levels
and
liquidity
at
the
holding
company,
potentially
provide
equity
capital to the bank, and fund growth
Joint Bookrunners:
Morgan Stanley / Stifel Nicolaus Weisel
Co-Managers:
Stephens / Keefe Bruyette & Woods / Sandler O’Neill
Lock-Up:
90 Days for Company, Executive Officers and Directors
Expected Pricing Date:
After close on Wednesday, January 18 |
 Positive Asset Quality Trends
11.2% decline in non-performing loans and 5.6% decline in non-performing
assets from Q3’11 to Q4’11 NPLs and NPAs have declined for three
consecutive quarters 51% of nonaccrual loans paying as agreed
Leading
Mid-South
Regional
Bank
Serving
our
Communities
for
Over
100
Years
Diversified Revenue Stream
Stable net interest margin and historically over 35% of the revenue stream derived
from noninterest sources High Quality Deposit Franchise with a Stable Core
Deposit Base 87% core deposits*
Cost of total deposits of 0.67%
Proven and Experienced Management Team
13% inside ownership including ESOP-held shares**
Investment Merits
At and for the three months ended December 31, 2011
*Includes all deposits except CDs>100K
**Insider ownership from SNL Financial as of 1/13/12
6 |
 A
Strategic Capital Raise Data as of December 31, 2011
Pro forma capital ratios assume $94.8 million of net proceeds.
7
Improves capitalization at the
Holding Company and maintains
flexibility at the Bank
Increases Holding Company
liquidity
Enhances strategic flexibility
Positioned for recovery
Ability to invest
Opportunistic M&A
7.67%
10.15%
11.77%
8.36%
11.13%
12.75%
6.00%
8.00%
10.00%
12.00%
14.00%
TCE / TA
Tier 1 Common
Ratio
Tier 1 Ratio
Q4'2011
Q4'2011 Pro Forma
Holding Company Capital Ratios |
 Strong core capital base
Did not rely on TARP/CPP or similar government assistance
Overview of BancorpSouth, Inc.
Data as of and for the year ended December 31, 2011
Insurance ranking from Business Insurance Magazine as of December 31, 2010
$13.0 billion in assets
287 locations with reach throughout an 9-state footprint
Customer-focused business model with comprehensive line of financial products
and banking services for individuals and small to mid-size businesses
Nation’s 26
largest insurance agency / brokerage operation
Strong
mortgage
operations
with
production
totaling
$1.2
billion
for
2011
8
th |
 9
Recent Operating Results
Dollars in millions, except per share data
*Represents both nonrecurring and noncash items that are included in income
before taxes
but
are
not
considered
to
be
a
component
of
core
operating
earnings
12/31/11
9/30/11
6/30/11
3/31/11
12/31/10
Net interest revenue
$107.5
$108.1
$109.9
$109.4
$110.2
Provision for credit losses
19.3
25.1
32.2
53.5
43.3
Noninterest revenue
65.3
62.1
75.1
68.3
74.0
Noninterest expense
135.9
130.7
137.1
130.0
123.5
Income (loss) before income taxes
17.7
14.3
15.7
(5.8)
17.4
Income tax provision (benefit)
4.4
2.4
2.9
(5.3)
1.6
Net income (loss)
$13.3
$11.9
$12.8
($0.5)
$15.8
Net income (loss) per share: diluted
$0.16
$0.14
$0.15
($0.01)
$0.19
Nonrecurring/Noncash Items*
MSR valuation adjustment
($1.0)
($11.7)
($3.8)
$2.5
$8.9
Security gains (losses), net
-
2.0
10.0
-
(0.5)
Prepayment penalty on FHLB borrowings
-
-
(9.8)
-
-
Branch closure expense
-
(3.1)
-
-
-
Total nonrecurring/noncash items
($1.0)
($12.8)
($3.6)
$2.5
$8.4
Three Months Ended |
 Strategic Focus
Preserve strong capital and position the Company for economic recovery
Focus on asset quality
Pursue quality loan growth
Take advantage of market disruption
Grow core earnings through margin expansion and revenue growth
Expense control and reduction
10 |
 Stable Net Interest Margin
Fiscal Year
Quarter Ended
Shown on a fully taxable equivalent basis
11
3.68%
3.75%
3.77%
3.70%
3.69%
3.71%
3.66%
3.69%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
2007
2008
2009
2010
3/31/11
6/30/11
9/30/11
12/31/11 |
 Percentages and amounts based on data for the twelve months ended December 31,
2011 *Excludes net securities gains of $12.1 million and MSR Impairment of
$13.7 million Noninterest Revenue Composition
Noninterest revenue continues to be a
stable and significant source of revenue
Insurance and mortgage businesses
provide significant sources of noninterest
revenue
Historically, over 35% of total revenue
has been derived from noninterest
sources
Insurance commissions were up 6% for
2011 compared to 2010
Mortgage production volume totaled $1.2
billion for 2011
Total Noninterest Revenue of $272.4M*
12
Noninterest Revenue Composition
Diversified Revenue Stream
Mortgage
lending
11%
Card and
merchant
fees
16%
Service
charges
25%
Trust income
4%
Insurance
commissions
32%
Other
12%
$22M
$22M
$21M
$18M
$23M
$23M
$22M
$19M
$62M
$66M
$72M
$66M
$66M
$69M
$72M
$66M
$0
$20
$40
$60
$80
3/31/10
6/30/10
9/30/10
12/31/10
3/31/11
6/30/11
9/30/11
12/31/11
Insurance Commissions
All Other Non-Interest Revenue |
 13
Balance Sheet Summary
Dollars in millions, except per share
12/31/11
9/30/11
12/31/10
Total assets
$12,996
$13,199
$13,615
(4.5)
%
Cash and equivalents
499
500
272
83.5
Securities
2,514
2,482
2,709
(7.2)
Loans, net of unearned income
8,870
9,056
9,333
(5.0)
Allowance for credit losses
(195)
(200)
(197)
(1.0)
Total deposits
10,955
11,063
11,490
(4.7)
Short-term borrowings
375
451
443
(15.3)
Shareholders' equity
1,263
1,267
1,222
3.4
Book value per share
15.13
15.17
14.64
3.3
Tangible book value per share
11.68
11.71
11.17
4.6
12/31/11 vs 12/31/10
% Change |
 Core
Deposit Franchise Approximately 87% of total deposits are
core, yielding a 92% loan / core deposit
ratio
Noninterest bearing deposits have
grown approximately 10% since
December 31, 2010
Cost of total deposits for the quarter
ended December 31, 2011 was 0.67%
Over $1 billion in CDs are maturing over
the next two quarters at a weighted
average rate of approximately 1.26%
Non-core time deposits declined 19.2%
in 2011
As of and for the year ended December 31, 2011
$11.0B Total
Deposit Composition
14
Non-Interest Bearing
DDA
21%
Interest Bearing DDA
43%
Savings
9%
Time
27% |
 MS**
29%
TX & LA
19%
AR**
14%
Other*
10%
AL & FL Panhandle
8%
TN**
8%
MO
6%
Greater Memphis
6%
Home Equity
6%
Commercial & Industrial
16%
C&I Owner-
Occupied
15%
Construction, Acquisition
& Development
10%
Commercial
Real Estate
20%
Agricultural
3%
Consumer Mortgages
22%
Credit Cards
1%
Other
7%
Diversified Loan Portfolio
$8.9B Portfolio
Loans By Category
Loans By Geography
15 |
 % Change
As of
Linked
YOY
12/31/11
9/30/11
12/31/10
Q4'11 vs. Q3'11
Q4'11 vs. Q4'10
Commercial and industrial
1,474
$
1,503
$
1,491
$
(2.0%)
(1.2%)
Real estate:
Consumer mortgages
1,945
1,966
1,952
(1.1%)
(0.3%)
Home equity
514
523
543
(1.7%)
(5.3%)
Agricultural
239
250
252
(4.1%)
(5.1%)
Commercial and industrial-owner occupied
1,302
1,330
1,331
(2.1%)
(2.2%)
Construction, acquisition and development
908
977
1,175
(7.0%)
(22.7%)
Commercial
1,754
1,772
1,817
(1.0%)
(3.5%)
Credit Cards
106
103
106
3.0%
(0.1%)
Other
627
632
665
(0.8%)
(5.7%)
Total
8,870
$
9,056
$
9,333
$
(2.0%)
(5.0%)
Loan Portfolio
Continue to decrease exposure in the CAD portfolio
Excluding
the
impact
of
CAD
portfolio
-
total
loans
declined
2.4%
from
December
31, 2010
16
Dollars in millions
Net loans and leases |
 Credit Quality Improvement
17
Non-performing loans decreased 11.2% from the previous quarter
Non-performing assets decreased 5.6% from the previous quarter
Both NPLs and NPAs have declined for three consecutive quarters
51% of non-accrual loans paying as agreed
85% of non-accrual loans were impaired and carried at 68% of unpaid
principal balance (“UPB”)
Sales of OREO properties during the quarter totaled $16.7 million,
resulting in no material net gain/loss. OREO is carried at 54% of
aggregate loan balances at time of foreclosure
At and for the three months ended December 31, 2011
“Paying as agreed”
includes loans < 30 days past due with payments occurring at least
quarterly |
 Dollars in millions
Net Charge-offs are Stabilizing
18 |
 NPLs
By Type & Location NPLs By Category
NPLs By Geography
As
of
December
31,
2011
NPLs
include
nonaccrual
loans,
loans
90+
days
past
due
and
restructured
loans
*“Other”
includes
all
other
geographic
regions
and
lines
of
business
not
managed
by
a
geographic
region
**Excludes
the
Greater
Memphis
Area
19
Consumer Mortgages
16%
Commercial & Industrial
4%
Home Equity
1%
Agricultural
2%
C&I Owner-
Occupied
13%
Construction, Acquisition
& Development
42%
Commercial
Real Estate
19%
Credit Cards
1%
Other
2%
AL & FL Panhandle
16%
AR**
8%
MS**
17%
MO
15%
Greater Memphis
13%
TN**
9%
TX & LA
18%
Other*
4% |
 20
Non-Performing Loans
Newly identified non-accrual loans for quarters ended as of dates shown
Non-Performing Loans
$394M
$425M
$380M
$363M
$322M
$300
$350
$400
$450
12/31/10
3/31/11
6/30/11
9/30/11
12/31/11
Newly Identified Non-Accrual Loans
$131M
$111M
$50M
$61M
$39M
$52M
$48M
$54M
$60M
$38M
$0
$50
$100
$150
12/31/10
3/31/11
6/30/11
9/30/11
12/31/11
Newly Identified Non-Accrual Loans
Loans 30-89 Days Past Due, Still Accruing |
 Conservative Impairments & OREO Carrying Value
85% of non-accrual loans are impaired and are
carried at 68% of UPB
As of December 31, 2011
Dollars in millions
21
OREO is carried at 54% of aggregate loan
balances at time of foreclosure
Total
Unpaid principal balance at time of foreclosure
$319.1
Cumulative charge-offs and writedowns of OREO
(145.3)
Current book value of OREO
$173.8
Current book value / UPB
54%
Total
Unpaid principal balance of impaired loans
$287.1
Cumulative charge-offs on impaired loans
(52.2)
Allowance for impaired loans
(39.7)
Net book value of impaired loans
$195.2
Net book value / UPB
68% |
 Positive Asset Quality Trends
11.2% decline in non-performing loans and 5.6% decline in non-performing
assets from Q3’11 to Q4’11 NPLs and NPAs have declined for three
consecutive quarters 51% of nonaccrual loans paying as agreed
Leading
Mid-South
Regional
Bank
Serving
our
Communities
for
Over
100
Years
Diversified Revenue Stream
Stable net interest margin and historically over 35% of the revenue stream derived
from noninterest sources High Quality Deposit Franchise with a Stable Core
Deposit Base 87% core deposits*
Cost of total deposits of 0.67%
Proven and Experienced Management Team
13% inside ownership including ESOP-held shares**
Investment Merits
At and for the three months ended December 31, 2011
*Includes all deposits except CDs>100K
**Insider ownership from SNL Financial as of 1/13/12
22 |
 Appendix |
 Non-GAAP Financial Reconciliation
24 |