Exhibit 99.1

News Release

 

 

Contact:
John G. Copeland				Will Fisackerly
Senior Executive Vice President and				Senior Vice President and
Chief Financial Officer				Director of Corporate Finance
662/680-2536				662/680-2475

BancorpSouth Announces Second Quarter 2017 Financial Results

TUPELO, MS, July 19, 2017/PRNewswire — BancorpSouth, Inc. (NYSE: BXS) today announced financial results for the quarter ended June 30, 2017.

Highlights for the second quarter of 2017 included:

 

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Net income of $37.9 million, or $0.41 per diluted share.

 

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Generated net loan growth of $216.8 million, or 8.1 percent on an annualized basis.

 

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Net interest margin increased to 3.52 percent.

 

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Earnings were negatively impacted by a pre-tax mortgage servicing rights (“MSR”) valuation adjustment of $1.5 million.

 

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Net operating income – excluding MSR – of $38.8 million, or $0.42 per diluted share.

 

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

 

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Total operating expense remained flat compared to the first quarter of 2017 and the second quarter of 2016 and operating efficiency ratio – excluding MSR – declined to 67.3 percent.

 

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Repurchased 1,381,634 shares of outstanding common stock at a weighted average price of $29.64 per share.

The Company reported net income of $37.9 million, or $0.41 per diluted share, for the second quarter of 2017 compared with net income of $34.7 million, or $0.37 per diluted share, for the second quarter of 2016 and net income of $38.1 million, or $0.41 per diluted share, for the first quarter of 2017.

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BancorpSouth, Inc.

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

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The Company reported net operating income – excluding MSR – of $38.8 million, or $0.42 per diluted share, for the second quarter of 2017 compared to $37.2 million, or $0.39 per diluted share, for the second quarter of 2016 and $36.9 million, or $0.39 per diluted share, for the first quarter of 2017. Net operating income – excluding MSR – is a non-GAAP financial measure used by management to assess the core operating performance of the Company. This measure excludes items such as securities gains and losses, MSR valuation adjustments, restructuring charges, merger-related expenses, industry-related legal settlements, and other one-time charges.

“We are pleased our second quarter results reflect continued earnings growth and improvement in many of our operating metrics,” remarked Dan Rollins, Chairman and Chief Executive Officer. “While our second quarter deposit balances reflect an expected seasonal decline, our loan growth rebounded nicely after a slower first quarter. We reported net loan growth of $216.8 million, or 8.1 percent on an annualized basis, which resulted in loans and leases surpassing $11 billion for the first time in our Company’s history. Total operating expenses continue to remain flat, which resulted in a decline in the operating efficiency ratio – excluding MSR – to 67.3 percent, the lowest level we have achieved since 2010. Finally, we continue to be active in our share repurchase program, as we repurchased approximately 1.4 million shares during the quarter at a weighted average price of $29.64 per share.”

“Additionally, our net interest margin increased to 3.52 percent from 3.46 percent for the first quarter of this year. The margin benefited primarily from increases in yields on our loan portfolio. We expect recent rate increases to continue to provide some benefit to our loan yields as our variable rate loans reach repricing dates over time.”

Net Interest Revenue

Net interest revenue was $117.5 million for the second quarter of 2017, an increase of 4.6 percent from $112.3 million for the second quarter of 2016 and an increase of 2.5 percent from $114.6 million for the first quarter of 2017. The fully taxable equivalent net interest margin was 3.52 percent for the second quarter of 2017 compared to 3.56 percent for the second quarter of 2016 and 3.46 percent for the first quarter of 2017. Yields on loans and leases were 4.27 percent for the second quarter of 2017 compared with 4.20 percent for both the second quarter of 2016 and the first quarter of 2017, while yields on total interest earning assets were 3.80 percent for the second quarter of 2017 compared with 3.78 percent for the second quarter of 2016 and 3.70 percent for the first quarter of 2017. The average cost of deposits was 0.25 percent for the second quarter of 2017 compared to 0.21 percent for the second quarter of 2016 and 0.23 percent for the first quarter of 2017.

Asset, Deposit and Loan Activity

Total assets were $14.8 billion at June 30, 2017 compared with $14.1 billion at June 30, 2016. Loans and leases, net of unearned income, were $11.0 billion at June 30, 2017 compared with $10.6 billion at June 30, 2016.

 

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Total deposits were $11.9 billion at June 30, 2017 compared with $11.4 billion at June 30, 2016. Time deposits decreased $57.3 million, or 3.1 percent, at June 30, 2017 compared to June 30, 2016. Over the same time period, interest bearing demand deposits increased $256.9 million, or 5.3 percent, while noninterest bearing demand deposits increased $257.0 million, or 8.2 percent, and savings deposits increased $117.4 million, or 7.8 percent.

Provision for Credit Losses and Allowance for Credit Losses

Earnings for the second quarter reflect a provision for credit losses of $1.0 million, compared to a provision of $2.0 million for the second quarter of 2016 and a provision of $1.0 million for the first quarter of 2017. Net charge-offs for the second quarter of 2017 were $4.6 million, compared with net charge-offs of $1.6 million for the second quarter of 2016 and net recoveries of $0.5 million for the first quarter of 2017. The allowance for credit losses was $121.6 million, or 1.10 percent of net loans and leases, at June 30, 2017, compared with $126.9 million, or 1.20 percent of net loans and leases, at June 30, 2016 and $125.2 million, or 1.16 percent of net loans and leases, at March 31, 2017. The increase in net charge-offs and the decline in the allowance for credit losses for the second quarter of 2017 were primarily the result of charge-offs associated with loans for which a specific reserve was recorded in previous quarters.

Total non-performing assets (“NPAs”) were $79.4 million, or 0.72 percent of net loans and leases, at June 30, 2017 compared with $94.9 million, or 0.90 percent of net loans and leases, at June 30, 2016, and $90.0 million, or 0.83 percent of net loans and leases, at March 31, 2017. Other real estate owned was $7.7 million at June 30, 2017 compared with $14.7 million at June 30, 2016 and $8.5 million at March 31, 2017.

Noninterest Revenue

Noninterest revenue was $68.1 million for the second quarter of 2017, compared with $68.5 million for the second quarter of 2016 and $70.9 million for the first quarter of 2017. These results included a negative MSR valuation adjustment of $1.5 million for the second quarter of 2017 compared with a negative MSR valuation adjustment of $4.1 million for the second quarter of 2016 and a positive MSR valuation adjustment of $0.9 million for the first quarter of 2017. 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 $7.6 million for the second quarter of 2017, compared with $12.0 million for the second quarter of 2016 and $8.1 million for the first quarter of 2017. Mortgage origination volume for the second quarter of 2017 was $385.9 million, compared with $462.6 million for the second quarter of 2016 and $287.8 million for the first quarter of 2017.

Credit and debit card fee revenue was $9.6 million for the second quarter of 2017, compared with $9.5 million for the second quarter of 2016 and $8.9 million for the first quarter of 2017. Deposit service charge revenue was $9.7 million for the second quarter of 2017, compared with $11.0 million for the second quarter of 2016 and $9.7 million for the first quarter of 2017. Insurance commission revenue was $31.1 million for the second quarter of 2017, compared with $28.8 million for the second quarter of 2016 and $32.9 million for the first quarter of 2017. Wealth management revenue was $5.3 million for the second quarter of 2017, compared with $5.3 million for the second quarter of 2016 and $5.2 million for the first quarter of 2017.

 

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BXS Announces Second Quarter 2017 Financial Results

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Noninterest Expense

Noninterest expense for the second quarter of 2017 was $127.6 million, compared with $127.6 million for the second quarter of 2016 and $127.1 million for the first quarter of 2017. Salaries and employee benefits expense was $81.6 million for the second quarter of 2017 compared to $80.7 million for the second quarter of 2016 and $81.4 million for the first quarter of 2017. Occupancy expense was $10.5 million for the second quarter of 2017, compared with $10.1 million for the second quarter of 2016 and $10.3 million for the first quarter of 2017. Other noninterest expense was $29.8 million for the second quarter of 2017, compared to $30.9 million for the second quarter of 2016 and $29.4 million for the first quarter of 2017.

Capital Management

The Company’s equity capitalization is comprised entirely of common stock. BancorpSouth’s ratio of shareholders’ equity to assets was 11.40 percent at June 30, 2017, compared with 12.12 percent at June 30, 2016 and 11.45 percent at March 31, 2017. The ratio of tangible shareholders’ equity to tangible assets was 9.44 percent at June 30, 2017, compared with 10.11 percent at June 30, 2016 and 9.49 percent at March 31, 2017.

During the second quarter of 2017, the Company repurchased 1,381,634 shares of its outstanding common stock at a weighted average price of $29.64 per share. During the first quarter of 2017, the Company repurchased 1,613,691 shares at a weighted average price of $30.62 per share. As of June 30, 2017, the Company had 3,016,615 remaining shares available for repurchase under its current share repurchase authorization, which expires on December 29, 2017.

Estimated regulatory capital ratios at June 30, 2017 were calculated in accordance with the Basel III capital framework. BancorpSouth is a “well capitalized” financial holding company, as defined by federal regulations, with Tier 1 risk-based capital of 11.90 percent at June 30, 2017 and total risk-based capital of 12.91 percent, compared with required minimum levels of 8 percent and 10 percent, respectively, in order to qualify for “well capitalized” classification.

Transactions

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

On January 21, 2014, the Company announced the signing of a definitive merger agreement with Central Community Corporation, headquartered in Temple, Texas, pursuant to which Central Community Corporation agreed to be merged with and into the Company. Central Community Corporation is the parent company of First State Bank Central Texas (“First State Bank”), which

 

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is headquartered in Austin, Texas. First State Bank operates 31 full-service banking offices in central Texas. As of June 30, 2017, Central Community Corporation, on a consolidated basis, reported total assets of $1.4 billion, total loans of $705.8 million and total deposits of $1.1 billion. Under the terms of the definitive agreement, the Company will issue approximately 7,250,000 shares of the Company’s common stock plus $28.5 million in cash for all outstanding shares of Central Community Corporation’s capital stock, subject to certain conditions and potential adjustments. The merger has been unanimously approved by the Board of Directors of each company and was approved by Central Community Corporation shareholders on April 24, 2014. The Company and Central Community Corporation entered into an extension of the merger effective on October 13, 2016, extending the merger agreement through December 31, 2017 to allow for additional time to obtain the necessary regulatory approvals and to satisfy all closing conditions. The merger agreement remains in effect until terminated by the Board of Directors of the Company or Central Community Corporation. The terms of the agreement provide for a minimum total deal value of $202.5 million but also allow Central Community Corporation to terminate the agreement if the average closing price of the Company’s common stock declines below a certain threshold prior to closing. The transaction is expected to close shortly after receiving all required regulatory approvals, although the Company can provide no assurance that the merger will close timely or at all.

On January 8, 2014, the Company announced the signing of a definitive merger agreement with Ouachita Bancshares Corp., parent company of Ouachita Independent Bank (collectively referred to as “OIB”), headquartered in Monroe, Louisiana, pursuant to which Ouachita Bancshares Corp. agreed to be merged with and into the Company. OIB operates 11 full-service banking offices along the I-20 corridor and has a loan production office in Madison, Mississippi. As of June 30, 2017, OIB, on a consolidated basis, reported total assets of $734.6 million, total loans of $496.1 million and total deposits of $614.2 million. Under the terms of the definitive agreement, the Company will issue approximately 3,675,000 shares of the Company’s common stock plus $22.875 million in cash for all outstanding shares of Ouachita Bancshares Corp.’s capital stock, subject to certain conditions and potential adjustments. The merger has been unanimously approved by the Board of Directors of each company and was approved by Ouachita Bancshares Corp. shareholders on April 8, 2014. The Company and Ouachita Bancshares Corp. entered into an extension of the merger effective on October 13, 2016, extending the merger agreement through December 31, 2017 to allow for additional time to obtain the necessary regulatory approvals and to satisfy all closing conditions. The merger agreement remains in effect until terminated by the Board of Directors of the Company or Ouachita Bancshares Corp. The terms of the agreement provide for a minimum total deal value of $111.1 million but also allow Ouachita Bancshares Corp. to terminate the agreement if the average closing price of the Company’s common stock declines below a certain threshold prior to closing. The transaction is expected to close shortly after receiving all required regulatory approvals, although the Company can provide no assurance that the merger will close timely or at all.

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

 

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Summary

Rollins concluded, “We continue to see steady improvement quarter after quarter as we grow our Company while keeping expenses flat. We are pleased with the success of several of our business development teams during the second quarter. We reported meaningful net loan growth, our mortgage team originated over $385 million in mortgage loans during the quarter, and our insurance team reported growth in property and casualty commissions and life and health commissions despite continued industry headwinds. While our story has seemed repetitive for some time now, I’m excited about our opportunity to continue to improve performance and enhance shareholder value going forward.”

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 19 of this news release.

Conference Call and Webcast

BancorpSouth will conduct a conference call to discuss its second quarter 2017 results on July 20, 2017, 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.com/Webcast. The webcast will also be available in archived format at the same address.

About BancorpSouth, Inc.

BancorpSouth, Inc. (NYSE: BXS) is a financial holding company headquartered in Tupelo, Mississippi, with $14.8 billion in assets. BancorpSouth Bank, a wholly-owned subsidiary of BancorpSouth, Inc., operates 234 full service branch locations as well as additional mortgage, insurance, and loan production offices in Alabama, Arkansas, Florida, Louisiana, Mississippi, Missouri, Tennessee and Texas, including an insurance location in Illinois. BancorpSouth is committed to a culture of respect, diversity, and inclusion in both its workplace and communities. To learn more, visit our Community Commitment page at www.bancorpsouth.com. Like us on Facebook; follow us on Twitter: @MyBXS; or connect with us through LinkedIn.

Forward-Looking Statements

Certain statements contained in this news release may not be based upon historical facts and are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements may be identified by their reference to a future period or periods or by the use of forward-looking terminology such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “foresee,” “hope,” “intend,” “may,” “might,” “plan,” “will,” or “would” or future or conditional verb tenses and variations or negatives of such terms. These forward-looking statements include, without limitation, those relating to the terms, timing and closings of the proposed mergers with Ouachita Bancshares Corp. and Central Community Corporation, the acceptance by customers of Ouachita Bancshares Corp. and Central Community Corporation of the Company’s products and services if the proposed mergers

 

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close, 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”), 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 and consideration to be used therefor, and the impact of certain claims and ongoing, pending or threatened litigation, administrative and investigatory matters.

The Company cautions readers not to place undue reliance on the forward-looking statements contained in this news release, in that actual results could differ materially from those indicated in such forward-looking statements as a result of a variety of factors. These factors may include, but are not limited to, the Company’s ability to operate its regulatory compliance programs consistent with federal, state and local laws, including its BSA/AML compliance program and its fair lending compliance program, the Company’s ability to successfully implement and comply with the Consent Order, the ability of the Company, Ouachita Bancshares Corp. and Central Community Corporation to obtain regulatory approval of and close the proposed mergers, the willingness of Ouachita Bancshares Corp. and Central Community Corporation to proceed with the proposed mergers, the potential impact upon the Company of the delay in the closings of these proposed mergers, the impact of any ongoing, pending or threatened litigation, administrative and investigatory matters involving the Company, conditions in the financial markets and economic conditions generally, the adequacy of the Company’s provision and allowance for credit losses to cover actual credit losses, the credit risk associated with real estate construction, acquisition and development loans, limitations on the Company’s ability to declare and pay dividends, the availability of capital on favorable terms if and when needed, liquidity risk, governmental regulation, including the Dodd-Frank Act, and supervision of the Company’s operations, the short-term and long-term impact of changes to banking capital standards on the Company’s regulatory capital and liquidity, the impact of regulations on service charges on the Company’s core deposit accounts, the susceptibility of the Company’s business to local economic and environmental conditions, the soundness of other financial institutions, changes in interest rates, the impact of monetary policies and economic factors on the Company’s ability to attract deposits or make loans, volatility in capital and credit markets, reputational risk, the impact of the loss of any key Company personnel, the impact of hurricanes or other adverse weather events, any requirement that the Company write down goodwill or other intangible assets, diversification in the types of financial services the Company offers, the growth of the Company’s insurance business and commission revenue, the growth of the Company’s loan, deposit and fee revenue sources, the Company’s ability to adapt its products and services to evolving industry standards and consumer preferences, competition with other financial services companies, risks in connection with completed or potential acquisitions, the Company’s growth strategy, interruptions or breaches in the Company’s information system security, the failure of certain third-party vendors to perform, unfavorable ratings by rating agencies, dilution caused by the Company’s issuance of any additional shares of its common stock to raise capital or acquire other banks, bank holding companies, financial holding companies and insurance agencies, the utilization of the Company’s share repurchase program, the implementation and execution of cost saving initiatives, other factors generally understood to affect the assets, business, cash flows, financial condition, liquidity, prospects and/or results of operations of financial services companies and other factors detailed from time to time in the Company’s press and news releases, reports and other filings with the SEC. Forward-looking statements speak only as of the date that they were made, and, except as required by law, the Company does not undertake any obligation to update or revise forward-looking statements to reflect events or circumstances that occur after the date of this news release.

 

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BXS Announces Second Quarter 2017 Financial Results

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BancorpSouth, Inc.

Selected Financial Information

(Dollars in thousands, except per share data)

(Unaudited)

 

		Quarter Ended 6/30/2017				Quarter Ended 3/31/2017				Quarter Ended 12/31/2016				Quarter Ended 9/30/2016				Quarter Ended 6/30/2016				Year to Date 6/30/2017				Year to Date 6/30/2016
Earnings Summary:
Interest revenue		$	126,855			$	122,926			$	123,444			$	122,340			$	119,423			$	249,781			$	237,395
Interest expense			9,377				8,315				8,057				7,750				7,107				17,692				13,920
Net interest revenue			117,478				114,611				115,387				114,590				112,316				232,089				223,475
Provision for credit losses			1,000				1,000				1,000				—				2,000				2,000				3,000
Net interest revenue, after provision for credit losses			116,478				113,611				114,387				114,590				110,316				230,089				220,475
Noninterest revenue			68,130				70,869				71,975				69,673				68,526				138,999				133,253
Noninterest expense			127,553				127,109				130,519				128,317				127,561				254,662				269,073
Income before income taxes			57,055				57,371				55,843				55,946				51,281				114,426				84,655
Income tax expense			19,166				19,278				18,173				18,129				16,589				38,444				27,414
Net income		$	37,889			$	38,093			$	37,670			$	37,817			$	34,692			$	75,982			$	57,241
Balance Sheet - Period End Balances
Total assets		$	14,843,130			$	14,866,054			$	14,724,388			$	14,611,483			$	14,137,160			$	14,843,130			$	14,137,160
Total earning assets			13,674,436				13,757,920				13,549,407				13,483,345				12,977,030				13,674,436				12,977,030
Total securities			2,421,295				2,540,887				2,531,676				2,468,199				2,103,883				2,421,295				2,103,883
Loans and leases, net of unearned income			11,018,540				10,801,694				10,811,991				10,658,761				10,575,978				11,018,540				10,575,978
Allowance for credit losses			121,561				125,196				123,736				125,887				126,935				121,561				126,935
Total deposits			11,938,296				12,042,845				11,688,141				11,590,059				11,364,367				11,938,296				11,364,367
Long-term debt			230,000				530,000				530,000				563,495				365,588				230,000				365,588
Total shareholders’ equity			1,691,832				1,702,389				1,723,883				1,724,104				1,713,043				1,691,832				1,713,043
Balance Sheet - Average Balances
Total assets		$	14,741,811			$	14,832,260			$	14,655,360			$	14,366,759			$	14,027,786			$	14,786,784			$	13,939,723
Total earning assets			13,636,415				13,715,612				13,525,284				13,265,266				12,963,056				13,675,795				12,896,528
Total securities			2,497,108				2,507,701				2,479,008				2,186,889				2,069,058				2,502,375				2,053,399
Loans and leases, net of unearned income			10,883,102				10,820,486				10,737,802				10,601,481				10,513,732				10,851,967				10,443,328
Total deposits			11,902,415				11,941,851				11,700,213				11,509,764				11,437,422				11,922,024				11,434,451
Long-term debt			398,132				530,000				534,141				430,886				219,434				463,702				143,592
Total shareholders’ equity			1,680,053				1,731,931				1,724,871				1,719,503				1,690,906				1,705,849				1,679,686
Nonperforming Assets:
Non-accrual loans and leases		$	63,585			$	74,439			$	71,812			$	70,725			$	68,638			$	63,585			$	68,638
Loans and leases 90+ days past due, still accruing			1,793				3,063				3,983				2,255				1,875				1,793				1,875
Restructured loans and leases, still accruing			6,303				4,060				26,047				17,936				9,687				6,303				9,687
Non-performing loans (NPLs)			71,681				81,562				101,842				90,916				80,200				71,681				80,200
Other real estate owned			7,704				8,458				7,810				11,391				14,658				7,704				14,658
Non-performing assets (NPAs)		$	79,385			$	90,020			$	109,652			$	102,307			$	94,858			$	79,385			$	94,858
Financial Ratios and Other Data:
Return on average assets			1.03	%			1.04	%			1.02	%			1.05	%			0.99	%			1.04	%			0.83	%
Operating return on average assets-excluding MSR*			1.06	%			1.01	%			0.83	%			1.02	%			1.07	%			1.03	%			1.07	%
Return on average shareholders’ equity			9.05	%			8.92	%			8.69	%			8.75	%			8.25	%			8.98	%			6.85	%
Operating return on average shareholders’ equity-excluding MSR*			9.27	%			8.63	%			7.08	%			8.49	%			8.84	%			8.94	%			8.87	%
Return on tangible equity*			11.08	%			11.19	%			10.70	%			10.68	%			9.99	%			11.17	%			8.24	%
Operating return on tangible equity-excluding MSR*			11.35	%			10.82	%			8.71	%			10.36	%			10.70	%			11.13	%			10.66	%
Noninterest income to average assets			1.85	%			1.94	%			1.95	%			1.93	%			1.96	%			1.90	%			1.92	%
Noninterest expense to average assets			3.47	%			3.48	%			3.54	%			3.55	%			3.66	%			3.47	%			3.88	%
Net interest margin-fully taxable equivalent			3.52	%			3.46	%			3.46	%			3.51	%			3.56	%			3.49	%			3.55	%
Net interest rate spread			3.40	%			3.35	%			3.36	%			3.41	%			3.47	%			3.38	%			3.46	%
Efficiency ratio (tax equivalent)*			67.90	%			67.71	%			68.79	%			68.72	%			69.58	%			67.80	%			74.37	%
Operating efficiency ratio-excluding MSR (tax equivalent)*			67.33	%			68.43	%			73.14	%			69.39	%			68.01	%			67.87	%			68.31	%
Loan/deposit ratio			92.30	%			89.69	%			92.50	%			91.96	%			93.06	%			92.30	%			93.06	%
Price to earnings multiple (avg)			18.83				19.15				22.02				18.86				19.07				18.83				19.07
Market value to book value			164.07	%			164.09	%			168.76	%			126.59	%			125.23	%			164.07	%			125.23	%
Market value to book value (avg)			161.24	%			166.39	%			145.61	%			129.73	%			124.62	%			163.14	%			120.37	%
Market value to tangible book value			202.52	%			202.32	%			207.63	%			154.87	%			153.53	%			202.52	%			153.53	%
Market value to tangible book value (avg)			199.07	%			205.16	%			179.14	%			158.71	%			152.78	%			201.29	%			147.57	%
Headcount FTE			3,989				3,973				3,998				3,981				4,028				3,989				4,028

 

*	Denotes non-GAAP financial measure. Refer to related disclosure and reconciliation on pages 19 and 20.

 

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BXS Announces Second Quarter 2017 Financial Results

Page 9

July 19, 2017

 

BancorpSouth, Inc.

Selected Financial Information

(Dollars in thousands, except per share data)

(Unaudited)

 

		Quarter Ended 6/30/2017				Quarter Ended 3/31/2017				Quarter Ended 12/31/2016				Quarter Ended 9/30/2016				Quarter Ended 6/30/2016				Year to Date 6/30/2017				Year to Date 6/30/2016
Credit Quality Ratios:
Net (recoveries) charge-offs to average loans and leases (annualized)			0.17	%			(0.02	%)			0.12	%			0.04	%			0.06	%			0.08	%			0.05	%
Provision for credit losses to average loans and leases (annualized)			0.04	%			0.04	%			0.04	%			0.00	%			0.08	%			0.04	%			0.06	%
Allowance for credit losses to net loans and leases			1.10	%			1.16	%			1.14	%			1.18	%			1.20	%			1.10	%			1.20	%
Allowance for credit losses to non-performing loans and leases			169.59	%			153.50	%			121.50	%			138.47	%			158.27	%			169.59	%			158.27	%
Allowance for credit losses to non-performing assets			153.13	%			139.08	%			112.84	%			123.05	%			133.82	%			153.13	%			133.82	%
Non-performing loans and leases to net loans and leases			0.65	%			0.76	%			0.94	%			0.85	%			0.76	%			0.65	%			0.76	%
Non-performing assets to net loans and leases			0.72	%			0.83	%			1.01	%			0.96	%			0.90	%			0.72	%			0.90	%
Equity Ratios:
Total shareholders’ equity to total assets			11.40	%			11.45	%			11.71	%			11.80	%			12.12	%			11.40	%			12.12	%
Tangible shareholders’ equity to tangible assets*			9.44	%			9.49	%			9.73	%			9.86	%			10.11	%			9.44	%			10.11	%
Capital Adequacy:
Common Equity Tier 1 capital			11.90	%			12.16	%			12.23	%			12.13	%			12.17	%			11.90	%			12.17	%
Tier 1 capital			11.90	%			12.16	%			12.34	%			12.32	%			12.37	%			11.90	%			12.37	%
Total capital			12.91	%			13.21	%			13.38	%			13.37	%			13.45	%			12.91	%			13.45	%
Tier 1 leverage capital			9.93	%			9.95	%			10.32	%			10.53	%			10.66	%			9.93	%			10.66	%
Estimated for current quarter
Common Share Data:
Basic earnings per share		$	0.41			$	0.41			$	0.40			$	0.40			$	0.37			$	0.82			$	0.61
Diluted earnings per share			0.41				0.41				0.40				0.40				0.37				0.82				0.60
Operating earnings per share*			0.41				0.40				0.40				0.40				0.37				0.81				0.70
Operating earnings per share- excluding MSR*			0.42				0.39				0.33				0.39				0.39				0.82				0.78
Cash dividends per share			0.13				0.13				0.13				0.13				0.10				0.25				0.20
Book value per share			18.59				18.44				18.40				18.33				18.12				18.59				18.12
Tangible book value per share*			15.06				14.95				14.95				14.98				14.78				15.06				14.78
Market value per share (last)			30.50				30.25				31.05				23.20				22.69				30.50				22.69
Market value per share (high)			31.85				32.40				31.75				25.09				24.18				32.40				24.18
Market value per share (low)			28.20				28.10				22.23				20.98				20.19				28.10				18.69
Market value per share (avg)			29.98				30.68				26.79				23.78				22.58				30.32				21.81
Dividend payout ratio			30.48	%			30.73	%			31.11	%			31.17	%			22.58	%			30.44	%			32.99	%
Total shares outstanding			91,022,729				92,344,409				93,696,687				94,074,740				94,546,091				91,022,729				94,546,091
Average shares outstanding - basic			91,366,309				93,642,848				93,740,626				94,303,916				94,461,025				92,504,580				94,415,118
Average shares outstanding - diluted			91,530,552				93,829,400				93,966,392				94,563,833				94,694,795				92,686,203				94,644,168
Yield/Rate:
(Taxable equivalent basis)
Loans, loans held for sale, and leases net of unearned income			4.27	%			4.20	%			4.18	%			4.20	%			4.20	%			4.24	%			4.19	%
Available-for-sale securities:
Taxable			1.37	%			1.35	%			1.31	%			1.33	%			1.40	%			1.36	%			1.40	%
Tax-exempt			5.26	%			5.29	%			5.29	%			5.32	%			5.36	%			5.28	%			5.34	%
Short-term investments			0.88	%			0.76	%			0.41	%			0.52	%			0.39	%			0.80	%			0.36	%
Total interest earning assets and revenue			3.80	%			3.70	%			3.70	%			3.74	%			3.78	%			3.75	%			3.77	%
Deposits			0.25	%			0.23	%			0.23	%			0.22	%			0.21	%			0.24	%			0.23	%
Demand - interest bearing			0.25	%			0.22	%			0.20	%			0.19	%			0.18	%			0.23	%			0.17	%
Savings			0.12	%			0.12	%			0.12	%			0.12	%			0.12	%			0.12	%			0.12	%
Other time			0.81	%			0.79	%			0.79	%			0.78	%			0.75	%			0.80	%			0.74	%
Short-term borrowings			0.69	%			0.31	%			0.16	%			0.15	%			0.15	%			0.53	%			0.14	%
Total interest bearing deposits & short-term borrowings			0.37	%			0.32	%			0.31	%			0.30	%			0.29	%			0.34	%			0.28	%
Junior subordinated debt			N/A				3.29	%			3.53	%			3.27	%			3.23	%			3.29	%			3.20	%
Long-term debt			1.01	%			0.87	%			0.73	%			0.83	%			1.21	%			0.93	%			1.64	%
Total interest bearing liabilities and expense			0.40	%			0.35	%			0.34	%			0.34	%			0.32	%			0.37	%			0.31	%
Interest bearing liabilities to interest earning assets			69.68	%			70.24	%			69.43	%			69.33	%			69.47	%			69.96	%			69.61	%
Net interest tax equivalent adjustment		$	2,248			$	2,261			$	2,371			$	2,462			$	2,493			$	4,509			$	5,051

 

*	Denotes non-GAAP financial measure. Refer to related disclosure and reconciliation on pages 19 and 20.

 

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BXS Announces Second Quarter 2017 Financial Results

Page 10

July 19, 2017

 

BancorpSouth, Inc.

Consolidated Balance Sheets

(Unaudited)

 

		Jun-17				Mar-17				Dec-16				Sep-16				Jun-16
		(Dollars in thousands)
Assets
Cash and due from banks		$	178,376			$	147,684			$	184,152			$	172,782			$	186,381
Interest bearing deposits with other banks			49,680				253,738				38,813				151,944				86,472
Available-for-sale securities, at fair value			2,421,295				2,540,887				2,531,676				2,468,199				2,103,883
Loans and leases			11,037,808				10,822,568				10,835,512				10,685,166				10,604,547
Less: Unearned income			19,268				20,874				23,521				26,405				28,569
Allowance for credit losses			121,561				125,196				123,736				125,887				126,935
Net loans and leases			10,896,979				10,676,498				10,688,255				10,532,874				10,449,043
Loans held for sale			184,921				161,600				166,927				204,441				210,698
Premises and equipment, net			306,863				305,250				305,561				305,245				305,694
Accrued interest receivable			40,716				42,329				42,005				41,583				39,645
Goodwill			300,798				300,798				300,798				294,901				294,901
Other identifiable intangibles			19,854				20,865				21,894				19,908				20,831
Bank owned life insurance			260,228				258,518				258,648				257,015				255,240
Other real estate owned			7,704				8,458				7,810				11,391				14,658
Other assets			175,716				149,429				177,849				151,200				169,714
Total Assets		$	14,843,130			$	14,866,054			$	14,724,388			$	14,611,483			$	14,137,160
Liabilities
Deposits:
Demand: Noninterest bearing		$	3,390,428			$	3,401,348			$	3,250,537			$	3,308,361			$	3,133,460
Interest bearing			5,095,570				5,182,011				5,034,470				4,877,482				4,838,704
Savings			1,630,123				1,627,621				1,561,819				1,533,401				1,512,694
Other time			1,822,175				1,831,865				1,841,315				1,870,815				1,879,509
Total deposits			11,938,296				12,042,845				11,688,141				11,590,059				11,364,367
Securities sold under agreement to repurchase			399,815				375,832				454,002				468,969				415,949
Federal funds purchased and other short-term borrowing			365,000				—				92,000				—				—
Accrued interest payable			4,259				4,109				3,975				4,107				3,727
Junior subordinated debt securities			—				—				12,888				23,198				23,198
Long-term debt			230,000				530,000				530,000				563,495				365,588
Other liabilities			213,928				210,879				219,499				237,551				251,288
Total Liabilities			13,151,298				13,163,665				13,000,505				12,887,379				12,424,117
Shareholders’ Equity
Common stock			227,557				230,861				234,242				235,187				236,365
Capital surplus			191,940				226,204				271,292				278,973				286,994
Accumulated other comprehensive loss			(49,861	)			(50,360	)			(50,937	)			(33,549	)			(27,587	)
Retained earnings			1,322,196				1,295,684				1,269,286				1,243,493				1,217,271
Total Shareholders’ Equity			1,691,832				1,702,389				1,723,883				1,724,104				1,713,043
Total Liabilities & Shareholders’ Equity		$	14,843,130			$	14,866,054			$	14,724,388			$	14,611,483			$	14,137,160

 

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BXS Announces Second Quarter 2017 Financial Results

Page 11

July 19, 2017

 

BancorpSouth, Inc.

Consolidated Average Balance Sheets

(Unaudited)

 

		Jun-17				Mar-17				Dec-16				Sep-16				Jun-16
		(Dollars in thousands)
Assets
Cash and due from banks		$	156,387			$	162,696			$	171,791			$	157,233			$	117,193
Interest bearing deposits with other banks			117,414				258,502				165,805				311,545				237,635
Available-for-sale securities, at fair value			2,497,108				2,507,701				2,479,008				2,186,889				2,069,058
Loans and leases			10,903,524				10,843,069				10,763,314				10,629,522				10,543,795
Less: Unearned income			20,422				22,583				25,512				28,041				30,063
Allowance for credit losses			125,578				124,662				125,526				126,820				126,103
Net loans and leases			10,757,524				10,695,824				10,612,276				10,474,661				10,387,629
Loans held for sale			138,792				128,923				142,669				165,351				142,632
Premises and equipment, net			306,483				305,637				305,994				305,707				307,600
Accrued interest receivable			38,702				38,774				38,648				38,125				36,887
Goodwill			300,798				300,798				296,888				294,901				292,620
Other identifiable intangibles			20,218				21,236				20,303				20,248				19,796
Bank owned life insurance			259,182				257,669				257,397				255,967				254,191
Other real estate owned			7,860				8,154				9,084				13,664				15,666
Other assets			141,343				146,346				155,497				142,468				146,879
Total Assets		$	14,741,811			$	14,832,260			$	14,655,360			$	14,366,759			$	14,027,786
Liabilities
Deposits:
Demand: Noninterest bearing		$	3,362,801			$	3,272,876			$	3,344,632			$	3,221,539			$	3,122,153
Interest bearing			5,079,388				5,244,069				4,951,906				4,886,920				4,957,827
Savings			1,626,996				1,587,725				1,543,542				1,525,016				1,510,250
Other time			1,833,230				1,837,181				1,860,133				1,876,289				1,847,192
Total deposits			11,902,415				11,941,851				11,700,213				11,509,764				11,437,422
Securities sold under agreement to repurchase			412,825				414,272				475,669				454,826				443,340
Federal funds purchased and other short-term borrowing			151,352				19,545				3,924				11				4,275
Accrued interest payable			4,028				3,867				4,031				3,950				3,509
Junior subordinated debt securities			—				1,146				21,181				23,198				23,198
Long-term debt			398,132				530,000				534,141				430,886				219,434
Other liabilities			193,006				189,648				191,330				224,621				205,702
Total Liabilities			13,061,758				13,100,329				12,930,489				12,647,256				12,336,880
Shareholders’ Equity
Common stock			228,322				234,285				234,323				235,860				236,176
Capital surplus			199,115				265,685				271,900				283,437				284,818
Accumulated other comprehensive loss			(49,185	)			(50,616	)			(40,454	)			(29,743	)			(32,820	)
Retained earnings			1,301,801				1,282,577				1,259,102				1,229,949				1,202,732
Total Shareholders’ Equity			1,680,053				1,731,931				1,724,871				1,719,503				1,690,906
Total Liabilities & Shareholders’ Equity		$	14,741,811			$	14,832,260			$	14,655,360			$	14,366,759			$	14,027,786

 

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BXS Announces Second Quarter 2017 Financial Results

Page 12

July 19, 2017

 

BancorpSouth, Inc.

Consolidated Condensed Statements of Income

(Dollars in thousands, except per share data)

(Unaudited)

 

		Quarter Ended																				Year to Date
		Jun-17				Mar-17				Dec-16				Sep-16				Jun-16				Jun-17				Jun-16
INTEREST REVENUE:
Loans and leases		$	115,286			$	111,498			$	112,189			$	111,605			$	109,078			$	226,784			$	216,883
Deposits with other banks			256				485				169				409				229				741				492
Available-for-sale securities:
Taxable			7,509				7,350				7,105				6,189				6,009				14,859				11,897
Tax-exempt			2,562				2,581				2,771				2,898				2,924				5,143				5,956
Loans held for sale			1,242				1,012				1,210				1,239				1,183				2,254				2,167
Total interest revenue			126,855				122,926				123,444				122,340				119,423				249,781				237,395
INTEREST EXPENSE:
Interest bearing demand			3,204				2,786				2,514				2,361				2,208				5,990				4,371
Savings			483				472				470				462				451				955				894
Other time			3,725				3,582				3,711				3,661				3,436				7,307				6,790
Federal funds purchased and securities sold under agreement to repurchase			509				322				190				173				159				831				299
Short-term and long-term debt			1,456				1,142				985				902				665				2,598				1,195
Junior subordinated debt			—				9				187				190				187				9				370
Other			—				2				—				1				1				2				1
Total interest expense			9,377				8,315				8,057				7,750				7,107				17,692				13,920
Net interest revenue			117,478				114,611				115,387				114,590				112,316				232,089				223,475
Provision for credit losses			1,000				1,000				1,000				—				2,000				2,000				3,000
Net interest revenue, after provision for credit losses			116,478				113,611				114,387				114,590				110,316				230,089				220,475
NONINTEREST REVENUE:
Mortgage banking			6,134				8,990				16,803				11,087				7,886				15,124				9,716
Credit card, debit card and merchant fees			9,565				8,903				9,262				9,292				9,495				18,468				18,456
Deposit service charges			9,706				9,689				9,956				11,313				11,018				19,395				22,032
Security gains, net			23				1,071				39				1				86				1,094				88
Insurance commissions			31,126				32,940				25,709				28,194				28,803				64,066				62,052
Wealth management			5,275				5,174				5,401				5,312				5,347				10,449				10,456
Other			6,301				4,102				4,805				4,474				5,891				10,403				10,453
Total noninterest revenue			68,130				70,869				71,975				69,673				68,526				138,999				133,253
NONINTEREST EXPENSE:
Salaries and employee benefits			81,597				81,386				80,850				80,884				80,675				162,983				162,354
Occupancy, net of rental income			10,455				10,302				10,294				10,412				10,109				20,757				20,382
Equipment			3,438				3,568				3,563				3,423				3,295				7,006				7,060
Deposit insurance assessments			2,261				2,484				1,818				3,227				2,582				4,745				4,870
Regulatory settlement			—				—				—				—				—				—				10,277
Other			29,802				29,369				33,994				30,371				30,900				59,171				64,130
Total noninterest expense			127,553				127,109				130,519				128,317				127,561				254,662				269,073
Income before income taxes			57,055				57,371				55,843				55,946				51,281				114,426				84,655
Income tax expense			19,166				19,278				18,173				18,129				16,589				38,444				27,414
Net income		$	37,889			$	38,093			$	37,670			$	37,817			$	34,692			$	75,982			$	57,241
Net income per share: Basic		$	0.41			$	0.41			$	0.40			$	0.40			$	0.37			$	0.82			$	0.61
Diluted		$	0.41			$	0.41			$	0.40			$	0.40			$	0.37			$	0.82			$	0.60

 

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BXS Announces Second Quarter 2017 Financial Results

Page 13

July 19, 2017

 

BancorpSouth, Inc.

Selected Loan Data

(Dollars in thousands)

(Unaudited)

 

		Quarter Ended
		Jun-17				Mar-17				Dec-16				Sep-16				Jun-16
LOAN AND LEASE PORTFOLIO:
Commercial and industrial		$	1,566,459			$	1,536,527			$	1,612,295			$	1,616,152			$	1,698,089
Real estate
Consumer mortgages			2,776,213				2,675,672				2,643,966				2,611,387				2,549,989
Home equity			624,868				626,488				628,846				622,566				614,686
Agricultural			245,646				240,534				245,377				242,171				251,566
Commercial and industrial-owner occupied			1,795,321				1,801,613				1,764,265				1,668,477				1,644,618
Construction, acquisition and development			1,156,901				1,136,827				1,157,248				1,121,386				1,021,218
Commercial real estate			2,341,633				2,271,542				2,237,719				2,240,717				2,254,653
Credit cards			104,169				103,813				109,656				107,447				108,101
All other			407,330				408,678				412,619				428,458				433,058
Total loans		$	11,018,540			$	10,801,694			$	10,811,991			$	10,658,761			$	10,575,978
ALLOWANCE FOR CREDIT LOSSES:
Balance, beginning of period		$	125,196			$	123,736			$	125,887			$	126,935			$	126,506
Loans and leases charged-off:
Commercial and industrial			(3,773	)			(384	)			(2,483	)			(1,180	)			(748	)
Real estate
Consumer mortgages			(522	)			(596	)			(905	)			(595	)			(477	)
Home equity			(125	)			(459	)			(873	)			(237	)			(224	)
Agricultural			(6	)			(44	)			—				(89	)			(10	)
Commercial and industrial-owner occupied			(1,460	)			(404	)			(20	)			(261	)			(660	)
Construction, acquisition and development			(54	)			(30	)			(10	)			(5	)			(280	)
Commercial real estate			(1	)			(19	)			—				(14	)			(870	)
Credit cards			(781	)			(838	)			(815	)			(696	)			(614	)
All other			(591	)			(559	)			(580	)			(713	)			(417	)
Total loans charged-off			(7,313	)			(3,333	)			(5,686	)			(3,790	)			(4,300	)
Recoveries:
Commercial and industrial			1,034				490				1,019				263				339
Real estate
Consumer mortgages			339				625				413				327				499
Home equity			110				356				71				109				246
Agricultural			34				41				15				28				96
Commercial and industrial-owner occupied			481				193				201				117				101
Construction, acquisition and development			208				1,324				195				382				524
Commercial real estate			75				69				176				1,043				509
Credit cards			205				249				208				262				199
All other			192				446				237				211				216
Total recoveries			2,678				3,793				2,535				2,742				2,729
Net recoveries (charge-offs)			(4,635	)			460				(3,151	)			(1,048	)			(1,571	)
Provision charged to operating expense			1,000				1,000				1,000				—				2,000
Balance, end of period		$	121,561			$	125,196			$	123,736			$	125,887			$	126,935
Average loans for period		$	10,883,102			$	10,820,486			$	10,737,802			$	10,601,481			$	10,513,732
Ratio:
Net (recoveries) charge-offs to average loans (annualized)			0.17	%			(0.02	%)			0.12	%			0.04	%			0.06	%

 

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BXS Announces Second Quarter 2017 Financial Results

Page 14

July 19, 2017

 

BancorpSouth, Inc.

Selected Loan Data

(Dollars in thousands)

(Unaudited)

 

		Quarter Ended
		Jun-17				Mar-17				Dec-16				Sep-16				Jun-16
NON-PERFORMING ASSETS
NON-PERFORMING LOANS AND LEASES:
Nonaccrual Loans and Leases
Commercial and industrial		$	9,988			$	13,959			$	13,679			$	11,659			$	8,675
Real estate
Consumer mortgages			24,690				21,543				21,084				20,196				19,309
Home equity			3,183				3,157				3,817				3,721				2,734
Agricultural			6,172				5,180				1,546				1,194				1,107
Commercial and industrial-owner occupied			10,215				15,135				10,791				11,983				16,021
Construction, acquisition and development			2,223				1,466				7,022				6,939				6,086
Commercial real estate			6,418				13,638				13,402				14,793				14,197
Credit cards			122				87				161				121				159
All other			574				274				310				119				350
Total nonaccrual loans and leases		$	63,585			$	74,439			$	71,812			$	70,725			$	68,638
Loans and Leases 90+ Days Past Due, Still Accruing:			1,793				3,063				3,983				2,255				1,875
Restructured Loans and Leases, Still Accruing			6,303				4,060				26,047				17,936				9,687
Total non-performing loans and leases			71,681				81,562				101,842				90,916				80,200
OTHER REAL ESTATE OWNED:			7,704				8,458				7,810				11,391				14,658
Total Non-performing Assets		$	79,385			$	90,020			$	109,652			$	102,307			$	94,858
Additions to Nonaccrual Loans and Leases During the Quarter		$	17,020			$	23,348			$	16,007			$	17,319			$	10,553
Loans and Leases 30-89 Days Past Due, Still Accruing:
Commercial and industrial		$	3,304			$	4,083			$	3,449			$	6,736			$	3,748
Real estate
Consumer mortgages			12,395				10,149				14,490				15,443				15,784
Home equity			2,590				1,720				3,072				3,854				2,842
Agricultural			197				364				1,283				616				367
Commercial and industrial-owner occupied			2,228				1,949				2,120				1,712				2,854
Construction, acquisition and development			2,639				3,306				1,344				1,272				1,137
Commercial real estate			1,183				2,631				653				15,221				3,776
Credit cards			705				800				726				774				677
All other			1,203				776				673				1,089				712
Total Loans and Leases 30-89 days past due, still accruing		$	26,444			$	25,778			$	27,810			$	46,717			$	31,897
Credit Quality Ratios:
Provision for credit losses to average loans and leases (annualized)			0.04	%			0.04	%			0.04	%			0.00	%			0.08	%
Allowance for credit losses to net loans and leases			1.10	%			1.16	%			1.14	%			1.18	%			1.20	%
Allowance for credit losses to non-performing loans and leases			169.59	%			153.50	%			121.50	%			138.47	%			158.27	%
Allowance for credit losses to non-performing assets			153.13	%			139.08	%			112.84	%			123.05	%			133.82	%
Non-performing loans and leases to net loans and leases			0.65	%			0.76	%			0.94	%			0.85	%			0.76	%
Non-performing assets to net loans and leases			0.72	%			0.83	%			1.01	%			0.96	%			0.90	%

 

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BXS Announces Second Quarter 2017 Financial Results

Page 15

July 19, 2017

 

BancorpSouth, Inc.

Selected Loan Data

(Dollars in thousands)

(Unaudited)

 

		June 30, 2017
		Pass				Special Mention				Substandard				Doubtful				Loss				Impaired				Total
LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE:
Commercial and industrial		$	1,516,992			$	—			$	41,604			$	301			$	—			$	7,562			$	1,566,459
Real estate
Consumer mortgages			2,710,161				—				63,352				276				—				2,424				2,776,213
Home equity			613,216				—				10,802				—				—				850				624,868
Agricultural			225,504				8,157				6,740				—				—				5,245				245,646
Commercial and industrial-owner occupied			1,734,306				3,161				50,644				—				—				7,210				1,795,321
Construction, acquisition and development			1,136,104				6,253				14,298				—				—				246				1,156,901
Commercial real estate			2,299,529				—				37,214				169				—				4,721				2,341,633
Credit cards			104,169				—				—				—				—				—				104,169
All other			400,191				—				6,900				239				—				—				407,330
Total loans		$	10,740,172			$	17,571			$	231,554			$	985			$	—			$	28,258			$	11,018,540
		March 31, 2017
		Pass				Special Mention				Substandard				Doubtful				Loss				Impaired				Total
LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE:
Commercial and industrial		$	1,489,753			$	—			$	34,936			$	—			$	—			$	11,838			$	1,536,527
Real estate
Consumer mortgages			2,611,576				517				62,045				258				—				1,276				2,675,672
Home equity			615,753				—				9,881				—				—				854				626,488
Agricultural			227,902				—				8,899				141				—				3,592				240,534
Commercial and industrial-owner occupied			1,734,995				3,663				50,908				—				—				12,047				1,801,613
Construction, acquisition and development			1,124,929				—				11,621				—				—				277				1,136,827
Commercial real estate			2,216,915				—				42,614				—				—				12,013				2,271,542
Credit cards			103,813				—				—				—				—				—				103,813
All other			402,287				—				6,291				100				—				—				408,678
Total loans		$	10,527,923			$	4,180			$	227,195			$	499			$	—			$	41,897			$	10,801,694

 

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BXS Announces Second Quarter 2017 Financial Results

Page 16

July 19, 2017

 

BancorpSouth, Inc.

Geographical Information

(Dollars in thousands)

(Unaudited)

 

		June 30, 2017
		Alabama and Florida Panhandle				Arkansas				Louisiana				Mississippi				Missouri				Tennessee				Texas				Other				Total
LOAN AND LEASE PORTFOLIO:
Commercial and industrial		$	141,372			$	193,526			$	194,235			$	572,109			$	91,371			$	110,161			$	207,777			$	55,908			$	1,566,459
Real estate
Consumer mortgages			374,392				322,148				239,660				867,821				93,572				305,685				539,131				33,804				2,776,213
Home equity			96,296				45,630				69,035				232,247				21,535				141,970				16,271				1,884				624,868
Agricultural			8,244				83,788				25,615				67,496				8,163				13,577				38,757				6				245,646
Commercial and industrial-owner occupied			210,072				195,859				212,839				718,767				46,545				157,145				254,094				—				1,795,321
Construction, acquisition and development			120,174				70,919				52,951				352,608				18,399				166,344				375,506				—				1,156,901
Commercial real estate			305,774				361,460				233,986				581,939				202,629				217,300				438,545				—				2,341,633
Credit cards			—				—				—				—				—				—				—				104,169				104,169
All other			51,849				40,196				24,271				215,870				3,411				21,951				43,433				6,349				407,330
Total loans		$	1,308,173			$	1,313,526			$	1,052,592			$	3,608,857			$	485,625			$	1,134,133			$	1,913,514			$	202,120			$	11,018,540
NON-PERFORMING LOANS AND LEASES:
Commercial and industrial		$	380			$	887			$	1,482			$	5,637			$	1,250			$	93			$	1,364			$	112			$	11,205
Real estate
Consumer mortgages			927				3,763				1,177				12,824				218				1,725				4,748				1,095				26,477
Home equity			382				793				819				921				80				249				—				2				3,246
Agricultural			—				405				204				5,563				—				—				16				—				6,188
Commercial and industrial-owner occupied			1,178				2,860				839				6,178				1,067				503				662				—				13,287
Construction, acquisition and development			45				745				237				1,062				55				49				381				—				2,574
Commercial real estate			989				1,067				2,117				2,135				—				13				441				—				6,762
Credit cards			—				—				—				—				—				—				—				1,343				1,343
All other			25				—				—				551				—				17				6				—				599
Total loans		$	3,926			$	10,520			$	6,875			$	34,871			$	2,670			$	2,649			$	7,618			$	2,552			$	71,681
NON-PERFORMING LOANS AND LEASES AS A PERCENTAGE OF OUTSTANDING:
Commercial and industrial			0.27	%			0.46	%			0.76	%			0.99	%			1.37	%			0.08	%			0.66	%			0.20	%			0.72	%
Real estate
Consumer mortgages			0.25	%			1.17	%			0.49	%			1.48	%			0.23	%			0.56	%			0.88	%			3.24	%			0.95	%
Home equity			0.40	%			1.74	%			1.19	%			0.40	%			0.37	%			0.18	%			0.00	%			0.11	%			0.52	%
Agricultural			0.00	%			0.48	%			0.80	%			8.24	%			0.00	%			0.00	%			0.04	%			0.00	%			2.52	%
Commercial and industrial-owner occupied			0.56	%			1.46	%			0.39	%			0.86	%			2.29	%			0.32	%			0.26	%			N/A				0.74	%
Construction, acquisition and development			0.04	%			1.05	%			0.45	%			0.30	%			0.30	%			0.03	%			0.10	%			N/A				0.22	%
Commercial real estate			0.32	%			0.30	%			0.90	%			0.37	%			0.00	%			0.01	%			0.10	%			N/A				0.29	%
Credit cards			N/A				N/A				N/A				N/A				N/A				N/A				N/A				1.29	%			1.29	%
All other			0.05	%			0.00	%			0.00	%			0.26	%			0.00	%			0.08	%			0.01	%			0.00	%			0.15	%
Total loans			0.30	%			0.80	%			0.65	%			0.97	%			0.55	%			0.23	%			0.40	%			1.26	%			0.65	%

 

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BXS Announces Second Quarter 2017 Financial Results

Page 17

July 19, 2017

 

BancorpSouth, Inc.

Noninterest Revenue and Expense

(Dollars in thousands)

(Unaudited)

 

		Quarter Ended																				Year to Date
		Jun-17				Mar-17				Dec-16				Sep-16				Jun-16				Jun-17				Jun-16
NONINTEREST REVENUE:
Mortgage banking excl. MSR and MSR Hedge market value adj		$	7,643			$	8,056			$	5,561			$	9,274			$	11,978			$	15,699			$	21,762
MSR and MSR Hedge market value adjustment			(1,509	)			934				11,242				1,813				(4,092	)			(575	)			(12,046	)
Credit card, debit card and merchant fees			9,565				8,903				9,262				9,292				9,495				18,468				18,456
Deposit service charges			9,706				9,689				9,956				11,313				11,018				19,395				22,032
Securities gains, net			23				1,071				39				1				86				1,094				88
Insurance commissions			31,126				32,940				25,709				28,194				28,803				64,066				62,052
Trust income			3,679				3,561				3,874				3,641				3,493				7,240				6,923
Annuity fees			264				349				257				446				465				613				942
Brokerage commissions and fees			1,332				1,264				1,270				1,225				1,389				2,596				2,591
Bank-owned life insurance			1,710				1,669				2,104				1,775				1,813				3,379				3,706
Other miscellaneous income			4,591				2,433				2,701				2,699				4,078				7,024				6,747
Total noninterest revenue		$	68,130			$	70,869			$	71,975			$	69,673			$	68,526			$	138,999			$	133,253
NONINTEREST EXPENSE:
Salaries and employee benefits		$	81,597			$	81,386			$	80,850			$	80,884			$	80,675			$	162,983			$	162,354
Occupancy, net of rental income			10,455				10,302				10,294				10,412				10,109				20,757				20,382
Equipment			3,438				3,568				3,563				3,423				3,295				7,006				7,060
Deposit insurance assessments			2,261				2,484				1,818				3,227				2,582				4,745				4,870
Regulatory settlement			—				—				—				—				—				—				10,277
Advertising			1,037				663				2,443				925				1,043				1,700				1,676
Foreclosed property expense			960				1,050				1,005				859				1,309				2,010				2,490
Telecommunications			1,233				1,147				1,245				1,288				1,259				2,380				2,554
Public relations			654				720				716				718				599				1,374				1,260
Data processing			7,230				6,623				6,903				6,856				6,685				13,853				13,076
Computer software			2,913				2,981				3,013				2,976				2,732				5,894				5,392
Amortization of intangibles			1,010				1,030				963				923				869				2,040				1,749
Legal			1,330				1,229				1,190				1,064				1,754				2,559				6,289
Merger expense			—				—				—				—				1				—				2
Postage and shipping			1,080				1,175				1,075				1,059				985				2,255				2,102
Other miscellaneous expense			12,355				12,751				15,441				13,703				13,664				25,106				27,540
Total noninterest expense		$	127,553			$	127,109			$	130,519			$	128,317			$	127,561			$	254,662			$	269,073
INSURANCE COMMISSIONS:
Property and casualty commissions		$	22,363			$	19,755			$	19,098			$	20,927			$	20,417				42,118			$	40,294
Life and health commissions			6,623				6,465				5,757				5,897				6,252				13,088				11,867
Risk management income			600				648				610				674				592				1,248				1,215
Other			1,540				6,072				244				696				1,542				7,612				8,676
Total insurance commissions		$	31,126			$	32,940			$	25,709			$	28,194			$	28,803			$	64,066			$	62,052

 

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BXS Announces Second Quarter 2017 Financial Results

Page 18

July 19, 2017

 

BancorpSouth, Inc.

Selected Additional Information

(Dollars in thousands)

(Unaudited)

 

		Quarter Ended
		Jun-17				Mar-17				Dec-16				Sep-16				Jun-16
MORTGAGE SERVICING RIGHTS:
Fair value, beginning of period		$	67,161			$	65,263			$	51,930			$	48,108			$	50,544
Additions to mortgage servicing rights:
Originations of servicing assets			2,772				2,866				4,022				4,349				3,723
Changes in fair value:
Due to payoffs/paydowns			(2,825	)			(1,876	)			(2,447	)			(2,338	)			(2,066	)
Due to change in valuation inputs or assumptions used in the valuation model			(1,616	)			909				11,759				1,813				(4,092	)
Other changes in fair value			(1	)			(1	)			(1	)			(2	)			(1	)
Fair value, end of period		$	65,491			$	67,161			$	65,263			$	51,930			$	48,108
MORTGAGE BANKING REVENUE:
Production revenue:
Origination		$	5,771			$	5,117			$	3,335			$	6,973			$	9,366
Servicing			4,697				4,815				4,673				4,639				4,678
Payoffs/Paydowns			(2,825	)			(1,876	)			(2,447	)			(2,338	)			(2,066	)
Total production revenue			7,643				8,056				5,561				9,274				11,978
Market value adjustment on MSR			(1,616	)			909				11,759				1,813				(4,092	)
Market value adjustment on MSR Hedge			107				25				(517	)			—				—
Total mortgage lending revenue		$	6,134			$	8,990			$	16,803			$	11,087			$	7,886
Mortgage loans serviced		$	6,431,273			$	6,429,617			$	6,384,649			$	6,285,027			$	6,156,258
MSR/mtg loans serviced			1.02	%			1.04	%			1.01	%			0.83	%			0.78	%
AVAILABLE-FOR-SALE SECURITIES, at fair value
U.S. Government agencies		$	1,713,374			$	1,818,180			$	1,789,427			$	1,691,866			$	1,310,803
Government agency issued residential mortgage-back securities			159,246				167,542				176,243				184,095				180,178
Government agency issued commercial mortgage-back securities			170,642				170,082				172,279				178,826				193,475
Obligations of states and political subdivisions			345,130				352,324				360,005				384,996				399,391
Other			32,903				32,759				33,722				28,416				20,036
Total available-for-sale securities		$	2,421,295			$	2,540,887			$	2,531,676			$	2,468,199			$	2,103,883

 

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BXS Announces Second Quarter 2017 Financial Results

Page 19

July 19, 2017

 

BancorpSouth, Inc.

Reconciliation of Non-GAAP Measures and Other Non-GAAP Ratio Definitions

(Dollars in thousands, except per share amounts)

(Unaudited)

Management evaluates the Company’s capital position and operating performance by utilizing certain financial measures not calculated in accordance with U.S. Generally Accepted Accounting Principles (GAAP), including net operating income, net operating income-excluding MSR, total operating expense, tangible shareholders’ equity to tangible assets, return on tangible equity, operating return on tangible equity-excluding MSR, operating return on average assets-excluding MSR, operating return on average shareholders’ equity-excluding MSR, tangible book value per share, operating earnings per share, operating earnings per share-excluding MSR, efficiency ratio (tax equivalent) and operating efficiency ratio-excluding MSR (tax equivalent). The Company has included these non-GAAP financial measures in this news release for the applicable periods presented. Management believes that the presentation of these non-GAAP financial measures (i) provides important supplemental information that contributes to a proper understanding of the Company’s capital position and operating performance, (ii) enables a more complete understanding of factors and trends affecting the Company’s business and (iii) allows investors to evaluate the Company’s performance in a manner similar to management, the financial services industry, bank stock analysts and bank regulators. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are presented in the tables below. These non-GAAP financial measures should not be considered as substitutes for GAAP financial measures, and the Company strongly encourages investors to review the GAAP financial measures included in this news release and not to place undue reliance upon any single financial measure. In addition, because non-GAAP financial measures are not standardized, it may not be possible to compare the non-GAAP financial measures presented in this news release with other companies’ non-GAAP financial measures having the same or similar names.

Reconciliation of Net Operating Income and Net Operating Income-Excluding MSR to Net Income:

 

				Quarter ended																				Year to Date
				6/30/2017				3/31/2017				12/31/2016				9/30/2016				6/30/2016				6/30/2017				6/30/2016
Net income				$	37,889			$	38,093			$	37,670			$	37,817			$	34,692			$	75,982			$	57,241
Plus:		Merger expense, net of tax			—				—				—				—				1				—				2
		Regulatory related charges, net of tax			—				—				—				—				—				—				9,412
Less:		Security gains, net of tax			14				664				25				—				53				678				55
Net operating income				$	37,875			$	37,429			$	37,645			$	37,817			$	34,640			$	75,304			$	66,600
Less:		MSR market value adjustment, net of tax			(936	)			579				6,970				1,124				(2,537	)			(357	)			(7,468	)
Net operating income-excluding MSR				$	38,811			$	36,850			$	30,675			$	36,693			$	37,177			$	75,661			$	74,068

Reconciliation of Total Operating Expense to Total Noninterest Expense:

 

Total noninterest expense				$	127,553			$	127,109			$	130,519			$	128,317			$	127,561			$	254,662			$	269,073
Less:		Merger expense			—				—				—				—				1				—				2
		Regulatory related charges			—				—				—				—				—				—				13,777
Total operating expense				$	127,553			$	127,109			$	130,519			$	128,317			$	127,560			$	254,662			$	255,294

 

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BXS Announces Second Quarter 2017 Financial Results

Page 20

July 19, 2017

 

BancorpSouth, Inc.

Reconciliation of Non-GAAP Measures and Other Non-GAAP Ratio Definitions

(Dollars in thousands, except per share amounts)

(Unaudited)

Reconciliation of Tangible Assets and Tangible Shareholders’ Equity to

Total Assets and Total Shareholders’ Equity:

 

		Quarter ended																				Year to Date
		6/30/2017				3/31/2017				12/31/2016				9/30/2016				6/30/2016				6/30/2017				6/30/2016
Tangible assets
Total assets		$	14,843,130			$	14,866,054			$	14,724,388			$	14,611,483			$	14,137,160			$	14,843,130			$	14,137,160
Less: Goodwill			300,798				300,798				300,798				294,901				294,901				300,798				294,901
Other identifiable intangible assets			19,854				20,865				21,894				19,908				20,831				19,854				20,831
Total tangible assets		$	14,522,478			$	14,544,391			$	14,401,696			$	14,296,674			$	13,821,428			$	14,522,478			$	13,821,428
Tangible shareholders’ equity
Total shareholders’ equity		$	1,691,832			$	1,702,389			$	1,723,883			$	1,724,104			$	1,713,043			$	1,691,832			$	1,713,043
Less: Goodwill			300,798				300,798				300,798				294,901				294,901				300,798				294,901
Other identifiable intangible assets			19,854				20,865				21,894				19,908				20,831				19,854				20,831
Total tangible shareholders’ equity		$	1,371,180			$	1,380,726			$	1,401,191			$	1,409,295			$	1,397,311			$	1,371,180			$	1,397,311
Total average assets		$	14,741,811			$	14,832,260			$	14,655,360			$	14,366,759			$	14,027,786			$	14,786,784			$	13,939,723
Total shares of common stock outstanding			91,022,729				92,344,409				93,696,687				94,074,740				94,546,091				91,022,729				94,546,091
Average shares outstanding-diluted			91,530,552				93,829,400				93,966,392				94,563,833				94,694,795				92,686,203				94,644,168
Tangible shareholders’ equity to tangible assets (1)			9.44	%			9.49	%			9.73	%			9.86	%			10.11	%			9.44	%			10.11	%
Return on tangible equity (2)			11.08	%			11.19	%			10.70	%			10.68	%			9.99	%			11.17	%			8.24	%
Operating return on tangible equity-excluding MSR (3)			11.35	%			10.82	%			8.71	%			10.36	%			10.70	%			11.13	%			10.66	%
Operating return on average assets-excluding MSR (4)			1.06	%			1.01	%			0.83	%			1.02	%			1.07	%			1.03	%			1.07	%
Operating return on average shareholders’ equity-excluding MSR (5)			9.27	%			8.63	%			7.08	%			8.49	%			8.84	%			8.94	%			8.87	%
Tangible book value per share (6)		$	15.06			$	14.95			$	14.95			$	14.98			$	14.78			$	15.06			$	14.78
Operating earnings per share (7)		$	0.41			$	0.40			$	0.40			$	0.40			$	0.37			$	0.81			$	0.70
Operating earnings per share-excluding MSR (8)		$	0.42			$	0.39			$	0.33			$	0.39			$	0.39			$	0.82			$	0.76

 

(1)	Tangible shareholders’ equity to tangible assets is defined by the Company as total shareholders’ equity less goodwill and other identifiable intangible assets, divided by the difference of total assets less goodwill and other identifiable intangible assets.

(2)	Return on tangible equity is defined by the Company as annualized net income divided by tangible shareholders’ equity.

(3)	Operating return on tangible equity-excluding MSR is defined by the Company as annualized net operating income-excluding MSR divided by tangible shareholders’ equity.

(4)	Operating return on average assets-excluding MSR is defined by the Company as annualized net operating income-excluding MSR divided by total average assets.

(5)	Operating return on average shareholders’ equity-excluding MSR is defined by the Company as annualized net operating income-excluding MSR divided by average shareholders’ equity.

(6)	Tangible book value per share is defined by the Company as tangible shareholders’ equity divided by total shares of common stock outstanding.

(7)	Operating earnings per share is defined by the Company as net operating income divided by average shares outstanding-diluted.

(8)	Operating earnings per share-excluding MSR is defined by the Company as net operating income-excluding MSR divided by average shares outstanding-diluted.

Efficiency Ratio (tax equivalent) and Operating Efficiency Ratio-excluding MSR (tax equivalent) Definitions

The efficiency ratio (tax equivalent) and the operating efficiency ratio-excluding MSR (tax equivalent) are supplemental financial measures utilized in management’s internal evaluation of the Company’s use of resources and are not defined under GAAP. The efficiency ratio (tax equivalent) is calculated by dividing total noninterest expense by total revenue, which includes net interest income plus noninterest income plus the tax equivalent adjustment. The operating efficiency ratio-excluding MSR (tax equivalent) excludes expense items otherwise disclosed as non-operating from total noninterest expense. In addition, the MSR valuation adjustment as well as securities gains and losses are excluded from total revenue.

 

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