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| EX-99.1 - EX-99.1 - BANCORPSOUTH INC | d807086dex991.htm |
| 8-K - 8-K - BANCORPSOUTH INC | d807086d8k.htm |
 BancorpSouth, Inc.
Financial Information
As of and for the three months
ended September 30, 2014
Exhibit 99.2 |
 Forward Looking Information
2
Certain
statements
contained
in
this
presentation
and
the
accompanying
slides
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,
statements
relating
to
the
terms,
timing
and
closings
of
the
proposed
mergers
with
Ouachita
Bancshares
Corp.
and
Central
Community
Corporation,
the
Company’s
ability
to
satisfy
the
requirements
of
the
consent
order
issued
by
the
FDIC
and
the
Mississippi
Department
of
Banking
and
Consumer
Finance
(“Mississippi
Banking
Department”),
the
findings
and
results
of
the
investigation
by
the
Consumer
Financial
Protection
Bureau
(the
“CFPB”)
of
the
Company’s
fair
lending
practices,
the
impact
of
certain
claims
and
ongoing,
pending
or
threatened
litigation,
administrative
and
investigatory
matters,
the
Company’s
undertaking
and
performance
of
the
necessary
actions
to
remediate
and
fully
resolve
those
concerns
regarding
the
Company’s
procedures,
systems
and
processes
related
to
certain
of
its
compliance
programs,
including
its
Bank
Secrecy
Act
and
anti-money-laundering
programs,
that
have
been
identified
by
its
federal
bank
regulators,
the
acceptance
by
customers
of
Ouachita
Bancshares
Corp.
and
Central
Community
Corporation
of
the
Company’s
products
and
services
if
the
proposed
mergers
close,
non-accrual
loans
and
any
uncertainty
regarding
repayment,
or
determinations
of
impairment,
of
such
non-accrual
loans,
revenue
estimates
for
the
Company’s
operations
in
Houston,
Texas
following
the
closing
of
the
transaction
with
GEM,
the
retention
of
key
personnel,
Knox’s
continued
operations
and
generation
of
revenues,
the
Company’s
opportunities
to
grow
organically
and
through
acquisitions,
the
Company’s
ability
to
enhance
market
share
in
existing
markets
and
to
gain
acceptance
of
the
Company
generally
in
new
markets,
the
Company’s
focus
on
and
impact
of
cost-saving
initiatives,
the
Company’s
ability
to
improve
efficiency,
trends
in
the
Company’s
operating
expenses,
and
the
Company’s
use
of
non-
GAAP
financial
measures.
The
Company
cautions
you
not
to
place
undue
reliance
on
the
forward-looking
statements
contained
in
this
this
presentation
and
the
accompanying
slides
in
that
actual
results
could
differ
materially
from
those
indicated
in
such
forward-looking
statements
because
of
a
variety
of
factors.
These
factors
may
include,
but
are
not
limited
to,
the
ability
of
the
Company
to
resolve
to
the
satisfaction
of
its
federal
bank
regulators
those
identified
concerns
regarding
the
Company’s
procedures,
systems
and
processes
related
to
certain
of
its
compliance
programs,
including
its
Bank
Secrecy
Act
and
anti-money-laundering
programs,
the
Company’s
ability
to
comply
with
the
consent
order
issued
by
the
FDIC
and
the
Mississippi
Banking
Department,
the
findings
and
results
of
the
CFPB
in
its
review
of
the
Company’s
fair
lending
practices,
the
impact
of
certain
claims
and
ongoing,
pending
or
threatened
litigation,
administrative
and
investigatory
matters,
the
impact
of
the
loss
of
any
key
Company
personnel,
the
findings
and
results
of
the
Consumer
Financial
Protection
Bureau
in
its
review
of
the
Company’s
fair
lending
practices,
the
ability
of
the
Company,
Ouachita
Bancshares
Corp.
and
Central
Community
Corporation
to
obtain
regulatory
approval
of
and
close
the
proposed
mergers,
the
potential
impact
upon
the
Company
of
the
delay
in
the
closings
of
these
proposed
mergers,
the
ability
of
the
Company
to
retain
key
personnel
after
the
closings
of
these
proposed
mergers
and
the
Knox
acquisition,
the
impact
of
the
Company’s
restructuring
of
its
management,
the
conditions
in
the
financial
markets
and
economic
conditions
generally,
the
adequacy
of
the
Company’s
provision
and
allowance
for
credit
losses
to
cover
actual
credit
losses,
the
credit
risk
associated
with
real
estate
construction,
acquisition
and
development
loans,
losses
resulting
from
the
significant
amount
of
the
Company’s
other
real
estate
owned,
limitations
on
the
Company’s
ability
to
declare
and
pay
dividends,
the
impact
of
legal
or
administrative
proceedings,
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
or
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
hurricanes
or
other
adverse
weather
events,
any
requirement
that
the
Company
write
down
goodwill
or
other
intangible
assets,
diversification
in
the
types
of
financial
services
the
Company
offers,
the
Company’s
ability
to
adapt
its
products
and
services
to
evolving
industry
standards
and
consumer
preferences,
competition
with
other
financial
services
companies,
risks
in
connection
with
completed
or
potential
acquisitions,
the
Company’s
growth
strategy,
interruptions
or
breaches
in
the
Company’s
information
system
security,
the
failure
of
certain
third-party
vendors
to
perform,
unfavorable
ratings
by
rating
agencies,
dilution
caused
by
the
Company’s
issuance
of
any
additional
shares
of
its
common
stock
to
raise
capital
or
acquire
other
banks,
bank
holding
companies,
financial
holding
companies
and
insurance
agencies,
other
factors
generally
understood
to
affect
the
assets,
business,
cash
flows,
financial
condition,
liquidity,
prospects
and/or
results
of
operations
of
financial
services
companies
and
other
factors
detailed
from
time
to
time
in
the
Company’s
press
releases
and
filings
with
the
Securities
and
Exchange
Commission.
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
after
the
date
of
this
this
presentation
and
the
accompanying
slides.
Unless
otherwise
noted,
any
quotes
in
this
this
presentation
and
the
accompanying
slides
can
be
attributed
to
company
management. |
 Q3
Highlights As of and for the three months ended September 30, 2014
Net income of $28.8 million, or $0.30 per diluted share
Net operating income of $30.8 million, or $0.32 per diluted share
Progress toward remediating Bank Secrecy Act (“BSA”) and
anti-money-laundering (“AML”) compliance weaknesses
Incurred one-time pre-tax costs of $3.1 million during the quarter
Ongoing costs expected to total approximately $3 million annually
Generated net loan growth of $198.9 million, or 8.5% annualized
Net interest margin increased to 3.62%
Continued credit quality improvement
3 |
 Recent
Quarterly Results Dollars in millions, except per share data
NM –
Not Meaningful
4
9/30/14
6/30/14
9/30/13
vs 6/30/14
Net interest revenue
105.6
$
103.1
$
100.2
$
2.5
%
5.4
%
Provision for credit losses
0.0
0.0
0.5
NM
(100.0)
Noninterest revenue
69.3
69.8
62.5
(0.8)
10.8
Noninterest expense
133.7
128.0
129.4
4.5
3.3
Income before income taxes
41.2
45.0
32.9
(8.4)
25.4
Income tax provision
12.4
14.1
8.0
(11.9)
55.2
Net income
28.8
$
30.9
$
24.9
$
(6.8)
%
15.8
%
Net income per share: diluted
0.30
$
0.32
$
0.26
$
(6.3)
%
15.4
%
Three Months Ended
% Change
vs 9/30/13 |
 Noninterest Revenue
Dollars in thousands
5
9/30/14
6/30/14
9/30/13
vs 6/30/14
Mortgage lending revenue
6,938
9,089
5,134
(23.7)
35.1
Credit card, debit card and merchant fees
8,972
8,567
8,834
4.7
1.6
Deposit service charges
13,111
12,437
13,679
5.4
(4.2)
Insurance commissions
29,246
28,621
23,800
2.2
22.9
Wealth management
5,961
5,828
6,057
2.3
(1.6)
Other
5,050
5,296
5,010
(4.6)
0.8
Total noninterest revenue
69,278
$
69,838
$
62,514
$
(0.8)
%
10.8
%
% of total revenue
39.6%
40.4%
38.4%
Three Months Ended
% Change
vs 9/30/13 |
 Noninterest Expense
Dollars in thousands
NM –
Not Meaningful
6
9/30/14
6/30/14
9/30/13
vs 6/30/14
Salaries and employee benefits
77,453
74,741
73,532
3.6
5.3
Occupancy, net of rental income
10,313
10,245
10,360
0.7
(0.5)
Equipment
4,205
4,169
4,555
0.9
(7.7)
Deposit insurance assessments
2,125
2,035
3,325
4.4
(36.1)
Write-off and amortization of bond issue cost
12
12
2,907
0.0
(99.6)
Advertising & public relations
2,142
2,188
2,315
(2.1)
(7.5)
Foreclosed property expense
5,721
4,202
3,298
36.1
73.5
Data processing, telecom & computer software
7,476
7,972
7,189
(6.2)
4.0
Amortization of intangibles
1,126
1,148
686
(1.9)
64.1
Legal
2,620
3,002
4,626
(12.7)
(43.4)
Merger expense
188
1,009
0
(81.4)
NM
Postage and shipping
1,103
1,116
1,027
(1.2)
7.4
Other miscellaneous expense
19,215
16,115
15,577
19.2
23.4
Total noninterest expense
133,699
$
127,954
$
129,397
$
4.5
%
3.3
%
Non-operating items:
Merger expense
188
1,009
0
BSA-AML charge
3,069
0
0
Legal charge
0
0
1,750
Write off of unamortized TRUPS issue cost
0
0
2,885
Total
3,257
$
1,009
$
4,635
$
Three Months Ended
% Change
vs 9/30/13 |
 Loan
Portfolio Dollars in millions
Net loans and leases
7
As of
9/30/14
6/30/14
9/30/13
Commercial and industrial
1,714
$
1,700
$
1,504
$
3.3
%
14.0
%
Real estate:
Consumer mortgages
2,191
2,072
1,931
22.9
13.5
Home equity
518
507
490
8.8
5.7
Agricultural
242
238
235
6.7
3.2
Commercial and industrial-owner occupied
1,509
1,506
1,422
0.8
6.1
Construction, acquisition and development
820
772
724
24.4
13.3
Commercial
1,917
1,902
1,795
3.1
6.8
Credit Cards
109
109
105
1.0
4.1
Other
491
507
567
(12.5)
(13.5)
Total
9,511
$
9,312
$
8,773
$
8.5
%
8.4
%
vs 9/30/13
% Change
vs 6/30/14
Annualized |
 Mortgage and Insurance Revenue
Dollars in thousands
8
Mortgage Lending Revenue
9/30/14
6/30/14
3/31/14
12/31/13
9/30/13
Origination revenue
3,736
$
8,758
$
1,964
$
3,590
$
2,862
$
Servicing revenue
4,113
4,058
4,115
4,361
4,072
MSR payoffs/paydowns
(1,559)
(1,616)
(1,138)
(1,240)
(1,560)
MSR valuation adjustment
648
(2,111)
(1,547)
2,894
(240)
Total mortgage lending revenue
6,938
$
9,089
$
3,394
$
9,605
$
5,134
$
Production volume
305,730
$
291,010
$
197,110
$
222,282
$
341,854
$
Purchase money production
244,584
$
241,538
$
143,890
$
160,043
$
229,042
$
Mortgage loans sold
225,444
$
264,478
$
143,213
$
200,665
$
371,271
$
Margin on loans sold
1.66%
3.31%
1.37%
1.79%
0.77%
Insurance Commission Revenue
Property and casualty commissions
22,746
$
21,576
$
19,987
$
15,588
$
18,372
$
Life and health commissions
5,128
5,549
5,010
4,525
4,061
Risk management income
708
617
705
648
628
Other
664
879
5,897
636
739
Total insurance commissions
29,246
$
28,621
$
31,599
$
21,397
$
23,800
$
Three Months Ended |
 NPLs
decreased $4.7 million, or 6.4%, and NPAs declined $17.3 million,
or 13.4%, quarter over quarter OREO decreased $12.6 million, or 22.7%, quarter
over quarter Near-term delinquencies declined to $24.4 million
No provision for credit losses recorded, which is consistent with no
recorded provision for the second quarter of 2014 and a decline from
$0.5 million for the third quarter of 2013
Net charge-offs were $3.2 million for the third quarter compared with
$2.6 million for the second quarter of 2014 and $7.6 million for
the third
quarter of 2013
58% of non-accrual loans were paying as agreed
Credit Quality Highlights
As
of
and
for
the
three
months
ended
September
30,
2014
“Paying
as
agreed”
includes
loans
that
are
less
than
30
days
past
due
with
payments
occurring
at
least
quarterly
9 |
 NPA
Improvement Dollars
in
millions
NPLs
consist
of
nonaccrual
loans,
loans
90+
days
past
due
and
restructured
loans
NPAs
consist
of
NPLs
and
other
real
estate
owned
Total NPAs Have Declined Approximately 50% in the Last 12 Months
10 |
 Summary
Non-Financial Highlights
Progress toward remediating BSA/AML compliance weaknesses
Loan production office openings
•
Opened second office in Houston, TX market
•
Chattanooga, TN
Financial Highlights
Meaningful net loan growth
Improvement in net interest margin
Growth in certain non-interest revenue sources
Continued credit quality improvement
Q&A
11 |