Attached files
| file | filename |
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| 8-K - 8-K - BANCORPSOUTH INC | d80986d8k.htm |
| EX-99.1 - EX-99.1 - BANCORPSOUTH INC | d80986dex991.htm |
 BancorpSouth, Inc. Financial Information As of and for the three months ended September 30, 2015 Exhibit 99.2 |
 Forward
Looking Information 2
Certain statements contained in this 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, those
relating to the terms, timing and closings of the proposed mergers with Ouachita
Bancshares Corp. and Central Community Corporation, the Company’s ability to operate its regulatory compliance programs consistent with federal, state ,and local laws, including its BSA/AML compliance program, the findings and results of the joint investigation by the Consumer Financial Protection Bureau
(the “CFPB”) and the United States Department of Justice (“DOJ”) of the Company’s fair lending practices, the acceptance by customers of Ouachita Bancshares Corp. and Central Community Corporation of the Company’s products and services
if the proposed mergers close, the outcome of any instituted, pending or threatened material litigation, amortization expense for intangible assets, goodwill impairments, loan impairment, utilization of appraisals and inspections for real
estate loans, maturity, renewal or extension of construction, acquisition and development loans, net interest revenue, fair value determinations, the amount of the Company’s non-performing loans and leases, additions to Other Real Estate
Owned (“OREO”), credit quality, credit losses, liquidity, off-balance sheet commitments and arrangements, valuation of mortgage servicing rights, allowance and provision for credit losses, continued weakness in the economic environment, early
identification and resolution of credit issues, utilization of non-GAAP financial measures, the ability of the Company to collect all amounts due according to the contractual terms of loan agreements, the Company’s reserve for losses from
representation and warranty obligations, the Company’s foreclosure process related to mortgage loans, the resolution of non-performing loans that are collaterally dependent, real estate values, fully-indexed interest rates, interest rate risk,
interest rate sensitivity, calculation of economic value of equity, impaired loan charge-offs, troubled debt restructurings, diversification of the Company’s revenue stream, liquidity needs and strategies, sources of funding, net interest margin,
declaration and payment of dividends, cost saving initiatives, improvement in the Company’s efficiencies, operating expense trends, future acquisitions and consideration to be used therefor, the impact of litigation regarding debit card fees 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 this presentation and the
accompanying slides, 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, the findings and results of the CFPB and the DOJ in their 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
impact of any ongoing, pending or threatened litigation, administrative and investigatory matters involving the Company, conditions in the financial markets and economic conditions generally, the adequacy of the Company’s provision and
allowance for credit losses to cover actual credit losses, the credit risk associated with real estate construction, acquisition and development loans, losses resulting from the significant amount of the Company’s OREO, limitations on the
Company’s ability to declare and pay dividends, the availability of capital on favorable terms if and when needed, liquidity risk, governmental regulation, including the Dodd-Frank Act, and supervision of the Company’s operations, the
short-term and long-term impact of changes to banking capital standards on the Company’s regulatory capital and liquidity, the impact of regulations on service charges on the Company’s core deposit accounts, the susceptibility of the Company’s
business to local economic and environmental conditions, the soundness of other financial institutions, changes in interest rates, the impact of monetary policies and economic factors on the Company’s ability to attract deposits or make loans, volatility
in capital and credit markets, reputational risk, the impact of the loss of any key Company personnel, the impact of hurricanes or other adverse weather events, any requirement that the Company write down goodwill or other intangible assets,
diversification in the types of financial services the Company offers, the Company’s ability to adapt its products and services to evolving industry standards and consumer preferences, competition with other financial services companies, risks in
connection with completed or potential acquisitions, the Company’s growth strategy, interruptions or breaches in the Company’s information system security, the failure of certain third-party vendors to perform, unfavorable ratings by
rating agencies, dilution caused by the Company’s issuance of any additional shares of its common stock to raise capital or acquire other banks, bank holding companies, financial holding companies and insurance agencies, other factors generally understood to
affect the assets, business, cash flows, financial condition, liquidity, prospects and/or results of operations of financial services companies and other factors detailed from time to time in the Company’s press and this presentation and the
accompanying slides, reports and other filings with the SEC. Forward-looking statements speak only as of the date that they were made, and, except as required by law, the Company does not undertake any obligation to update or revise
forward-looking statements to reflect events or circumstances that occur after the date of this this presentation and the accompanying slides. |
 Q3
Highlights As of and for the three months ended September 30,
2015 Net income of $34.3 million, or $0.36 per diluted share
Generated net loan growth of $212.0 million, or 8.4% annualized
Net interest margin improved to 3.59 percent
Mortgage lending revenue adversely impacted by a negative MSR valuation
adjustment of $5.3 million
Earnings benefited from a negative provision for credit losses of $3.0
million Continued progress toward improving cost structure reflected in $1.7
million decline in total noninterest expense compared to the second quarter
of 2015 Repurchased 2.9 million shares of outstanding common stock at a
weighted average price of $23.58
3 |
 Recent
Quarterly Results Dollars in millions, except per share data
NM – Not Meaningful 4 9/30/15 6/30/15 9/30/14 vs 6/30/15 Net interest revenue 111.1 $ 107.3 $ 105.6 $ 3.5 % 5.2 % Provision for credit losses (3.0) (5.0) 0.0 NM NM Noninterest revenue 63.0 74.3 69.3 (15.3) (9.1) Noninterest expense 126.5 128.2 133.7 (1.3) (5.4) Income before income taxes 50.6 58.4 41.2 (13.5) 22.8 Income tax provision 16.2 18.7 12.4 (13.4) 30.7 Net income 34.3 $ 39.7 $ 28.8 $ (13.5) % 19.3 % Net income per share: diluted 0.36 $ 0.41 $ 0.30 $ (12.2) % 20.0 % Three Months Ended % Change vs 9/30/14 |
 Noninterest Revenue Dollars in thousands NM – Not Meaningful 5 9/30/15 6/30/15 9/30/14 vs 6/30/15 Mortgage production & servicing revenue 7,647 $ 9,781 $ 6,290 $ (21.8) % 21.6 % MSR valuation adjustment (5,308) 4,321 648 NM NM Credit card, debit card and merchant fees 9,282 9,298 8,972 (0.2) 3.5 Deposit service charges 12,150 11,527 13,111 5.4 (7.3) Insurance commissions 28,584 29,319 29,246 (2.5) (2.3) Wealth management 5,567 5,508 5,961 1.1 (6.6) Other 5,031 4,560 5,050 10.3 (0.4) Total noninterest revenue 62,953 $ 74,314 $ 69,278 $ (15.3) % (9.1) % % of total revenue 36.2% 40.9% 39.6% Three Months Ended % Change vs 9/30/14 |
 Noninterest Expense Dollars in thousands NM – Not Meaningful 6 9/30/15 6/30/15 9/30/14 vs 6/30/15 Salaries and employee benefits 81,354 $ 79,759 $ 77,423 $ 2.0 % 5.1 % Occupancy, net of rental income 10,819 10,419 10,313 3.8 4.9 Equipment 3,742 4,024 4,205 (7.0) (11.0) Deposit insurance assessments 2,191 2,377 2,125 (7.8) 3.1 Amortization of bond issue cost 12 12 12 - - Advertising & public relations 1,293 2,339 2,142 (44.7) (39.6) Foreclosed property expense 808 1,625 5,721 (50.3) (85.9) Data processing, telecom & computer software 10,018 9,911 10,059 1.1 (0.4) Amortization of intangibles 948 1,061 1,126 (10.7) (15.8) Legal 1,233 1,998 2,620 (38.3) (52.9) Merger expense 8 4 188 NM NM Postage and shipping 1,030 1,194 1,103 (13.8) (6.6) Other miscellaneous expense 12,994 13,454 16,632 (3.4) (21.9) Total noninterest expense 126,450 $ 128,178 $ 133,669 $ (1.3) % (5.4) % Non-operating items: Merger expense 8 $
4 $
188 $ BSA-AML charge - - 3,069 Total 8 $
4 $
3,257 $ Three Months Ended % Change vs 9/30/14 |
 Deposits Dollars in millions 7 9/30/15 6/30/15 9/30/14 Noninterest bearing demand 3,053 $ 2,912 $ 2,811 $ 19.3 % 8.6 % Interest bearing demand 4,795 4,881 4,498 (7.1) 6.6 Savings 1,410 1,408 1,312 0.6 7.5 Other time 1,884 1,934 2,080 (10.2) (9.4) Total Deposits 11,142 $ 11,135 $ 10,702 $ 0.2 % 4.1 % Customer Repos 425 376 431 51.9 (1.4) Total Deposits & Customer Repos 11,567 $ 11,511 $ 11,133 $ 1.9 % 3.9 % As of % Change Annualized vs 6/30/15 vs 9/30/14 |
 Loan
Portfolio Dollars in millions
Net loans and leases 8 As of 9/30/15 6/30/15 9/30/14 Commercial and industrial 1,710 $ 1,730 $ 1,714 $ (4.5) % (0.2) % Real estate: Consumer mortgages 2,447 2,374 2,191 12.2 11.7 Home equity 574 558 518 10.7 10.7 Agricultural 252 240 242 20.7 4.3 Commercial and industrial-owner occupied 1,606 1,596 1,509 2.4 6.4 Construction, acquisition and development 901 860 820 18.7 9.9 Commercial 2,141 2,081 1,917 11.4 11.7 Credit Cards 110 111 109 (3.5) 0.1 Other 478 456 491 19.1 (2.5) Total 10,220 $ 10,008 $ 9,511 $ 8.4 % 7.5 % vs 9/30/14 % Change vs 6/30/15 Annualized |
 Mortgage
and Insurance Revenue Dollars in thousands
9 Mortgage Lending Revenue 9/30/15 6/30/15 3/31/15 12/31/14 9/30/14 Origination revenue 5,154 $ 7,395 $ 8,914 $ 3,949 $ 3,736 $ Servicing revenue 4,365 4,316 4,256 4,215 4,113 MSR payoffs/paydowns (1,872) (1,930) (1,564) (1,480) (1,559) MSR valuation adjustment (5,308) 4,321 (3,039) (3,434) 648 Total mortgage lending revenue 2,339 $ 14,102 $ 8,567 $ 3,250 $ 6,938 $ Production volume 402,163 $ 417,154 $ 311,115 $ 256,308 $ 305,730 $ Purchase money production 307,502 $ 300,801 $ 200,109 $ 193,154 $ 244,584 $ Mortgage loans sold 396,823 $ 365,557 $ 243,477 $ 229,070 $ 225,444 $ Margin on loans sold 1.30% 2.02% 3.66% 1.72% 1.66% Current pipeline 268,746 $ 330,196 $ 302,721 $ 180,390 $ 178,531 $ Mortgage originators 129 122 124 122 113 Insurance Commission Revenue Property and casualty commissions 21,155 $ 21,145 $ 20,673 $ 19,007 $ 22,746 $ Life and health commissions 5,775 6,202 5,412 5,521 5,128 Risk management income 709 637 666 621 708 Other 945 1,335 6,742 227 664 Total insurance commissions 28,584 $ 29,319 $ 33,493 $ 25,376 $ 29,246 $ Three Months Ended |
 Negative provision for credit losses of $3.0 million, compared to a negative
provision of $5.0 million for the second quarter of 2015 and no recorded
provision for the third quarter of 2014
Net charge-offs were $2.3 million for the third quarter compared with net
recoveries of $6.7 million for the second quarter of 2015 and net
charge-offs of $3.2 million for the third quarter of 2014
Non-performing loans (“NPLs”) increased $10.8 million and
non-performing assets (“NPAs”) increased $10.2 million
during the third quarter Near-term delinquencies remained stable at
$25.6 million OREO decreased $0.6 million, or 2.5%, quarter over
quarter Credit Quality Highlights
As of and for the three months ended September 30, 2015
10 |
 Non-performing Assets
Total NPAs Have Stabilized Over the Past Several Quarters
11 $0 $125 $250 $375 $500 $625 4Q 08 4Q 09 4Q 10 1Q 11 4Q 11 4Q 12 4Q 13 1Q 14 2Q 14 3Q 14 4Q 14 1Q 15 2Q 15 3Q 15 NPLs OREO 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 |
 Summary Highlights Continued loan growth Improvement in net interest margin and growth in net interest income Progress toward lowering expenses Repurchase of 2.9 million shares of outstanding common stock Current Focus Continue to grow – loans, deposits, and fee revenue sources Challenge expenses and continue to improve efficiency Efficiently manage capital Q&A 12 |