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BancorpSouth Announces Third Quarter 2020 Financial Results

TUPELO, Miss., Oct. 19, 2020 /PRNewswire/ -- BancorpSouth Bank (NYSE: BXS) (the "Company") today announced financial results for the quarter ended September 30, 2020.

Highlights for the third quarter of 2020 included:

  • Achieved record quarterly net income available to common shareholders of $71.5 million, or $0.69 per diluted common share, and record net operating income available to common shareholders – excluding MSR – of $71.2 million, or $0.69 per diluted common share.
  • Recorded provision for credit losses of $15.0 million primarily as a result of the lengthening of the anticipated recovery time for certain economic factors included in the Company's allowance for credit losses methodology associated with the coronavirus ("COVID-19") pandemic; net charge-offs for the quarter totaled $1.4 million, or 0.04 percent of net loans and leases on an annualized basis.
  • Generated a record $110.0 million in pre-tax pre-provision net revenue, or 1.88 percent of average assets on an annualized basis, which represents an increase from 1.87 percent for the third quarter of 2019 and an increase from 1.81 percent for the second quarter of 2020.
  • Generated total deposit and customer repo growth of $174.9 million for the quarter, or 3.5 percent on an annualized basis.
  • Mortgage production volume of $937.7 million contributed to mortgage production and servicing revenue of $26.7 million.
  • Continued improvement in operating efficiency reflected in the decline in the operating efficiency ratio – excluding MSR – to 58.4 percent for the quarter.
  • Maintained strong regulatory capital metrics; estimated total risk-based capital of 14.20 percent at September 30, 2020 compared to 11.28 percent at September 30, 2019.

"We continue to report strong financial performance despite the lingering economic and operational impact of the COVID-19 pandemic," remarked Dan Rollins, Chairman and Chief Executive Officer.  "While the economies across our footprint have generally re-opened and most businesses are performing well, there are certain industries, including hospitality, that are still feeling the impact of the pandemic.  The economic forecasts that we utilize in our reserve methodology reflect a lengthening in the anticipated economic recovery time as compared to the forecasts at the end of the second quarter.  Accordingly, we recorded a provision for credit losses of $15.0 million for the third quarter of 2020.  Outside of this additional provisioning, we continue to be pleased with our operating performance.   We generated a record $110.0 million in pre-tax pre-provision net revenue for the quarter, or 1.88 percent of average assets on an annualized basis." 

"As we look more specifically at our third quarter performance, our mortgage team had another outstanding quarter generating production volume of over $937.7 million and total production and servicing revenue of $26.7 million.  Although refinance activity remains elevated, purchase money production remains very strong, representing 61 percent of total volume for the quarter.  Although loan demand has been slow following the completion of the Paycheck Protection Program ("PPP"), we had a solid quarter from a deposit growth standpoint as total deposits and customer repos increased $174.9 million, or 3.5 percent on an annualized basis, during the third quarter.  While we saw a meaningful increase in net interest income, the shift in earning asset mix resulting from the additional liquidity continues to pressure our net interest margin.  Finally, our operating efficiency continues to improve as reflected in the operating efficiency ratio – excluding MSR – of 58.4 percent for the third quarter.  This marks the first time our efficiency ratio has been below 60 percent for a quarter since well before the last financial crisis."

Earnings Summary

The Company reported net income available to common shareholders of $71.5 million, or $0.69 per diluted common share, for the third quarter of 2020, compared with net income available to common shareholders of $63.8 million, or $0.63 per diluted common share, for the third quarter of 2019 and net income available to common shareholders of $58.8 million, or $0.57 per diluted common share, for the second quarter of 2020.  The Company reported net operating income available to common shareholders – excluding MSR – of $71.2 million, or $0.69 per diluted common share, for the third quarter of 2020, compared with $69.7 million, or $0.69 per diluted common share, for the third quarter of 2019 and $60.9 million, or $0.59 per diluted common share, for the second quarter of 2020. 

The Company reported pre-tax pre-provision net revenue of $110.0 million, or 1.88 percent of average assets on an annualized basis, compared to $90.4 million, or 1.87 percent of average assets on an annualized basis, for the third quarter of 2019 and $102.1 million, or 1.81 percent of average assets, for the second quarter of 2020.

Net Interest Revenue

Net interest revenue was $175.9 million for the third quarter of 2020, an increase of 5.6 percent from $166.6 million for the third quarter of 2019 and an increase of 3.1 percent from $170.6 million for the second quarter of 2020.  The fully taxable equivalent net interest margin was 3.31 percent for the third quarter of 2020, compared with 3.88 percent for the third quarter of 2019 and 3.35 percent for the second quarter of 2020.  Yields on net loans and leases were 4.54 percent for the third quarter of 2020, compared with 5.16 percent for the third quarter of 2019 and 4.59 percent for the second quarter of 2020, while yields on total interest earning assets were 3.77 percent for the third quarter of 2020, compared with 4.63 percent for the third quarter of 2019 and 3.87 percent for the second quarter of 2020.  The net interest margin, excluding accretable yield, was 3.23 percent for the third quarter of 2020, compared with 3.76 percent for the third quarter of 2019 and 3.30 percent for the second quarter of 2020, while yields on net loans and leases, excluding accretable yield, were 4.44 percent for the third quarter of 2020, compared with 5.02 percent for the third quarter of 2019 and 4.53 percent for the second quarter of 2020. 

The $1.2 billion in PPP loans on the balance sheet had an adverse impact of approximately 11 basis points on the yield on net loans and leases, excluding accretable yield, for the third quarter of 2020.  The average cost of deposits was 0.44 percent for the third quarter of 2020, compared with 0.71 percent for the third quarter of 2019 and 0.50 percent for the second quarter of 2020.

Balance Sheet Activity

Loans and leases, net of unearned income, decreased $99.7 million during the third quarter of 2020.  Deposits and customer repos increased $174.9 million during the third quarter of 2020.  There were no acquisitions during the third quarter of 2020.  Most of the loan origination volume occurred during the second quarter of 2020, with the PPP expiring during the third quarter of 2020.  In total, the Company originated and funded just over 15,000 loans totaling in excess of $1.2 billion under the program.  Over 5,000 of these loans were made to new customers of the Company. 

Provision for Credit Losses and Allowance for Credit Losses

Earnings for the third quarter of 2020 reflect a provision for credit losses of $15.0 million, compared with a provision of $0.5 million for the third quarter of 2019 and a provision of $20.0 million for the second quarter of 2020.  Net charge-offs for the third quarter of 2020 were $1.4 million, or 0.04 percent of net loans and leases on an annualized basis, compared with net recoveries of $0.7 million for the third quarter of 2019 and net charge-offs of $1.2 million for the second quarter of 2020.  The allowance for credit losses was $250.6 million, or 1.64 percent of net loans and leases, at September 30, 2020, compared with $116.9 million, or 0.83 percent of net loans and leases, at September 30, 2019, and $237.0 million, or 1.54 percent of net loans and leases, at June 30, 2020.   The allowance for credit losses coverage, excluding the impact of PPP loans, was 1.78 percent at September 30, 2020.   

The Company adopted Accounting Standards Update 2016-13 "Financial Instruments – Credit Losses" effective January 1, 2020.  The increase in the allowance for credit losses resulting from this implementation was $62.6 million.  Of this increase, $22.6 million was a result of the reclassification of non-accretable difference on previously purchased credit impaired loans that are now considered purchased credit deteriorated loans, while $40.0 million was the result primarily of the requirement of estimating credits losses over the life of the loan portfolio.  The adoption of this standard impacted the comparability of credit quality and coverage metrics to all periods preceding January 1, 2020.

Total non-performing assets were $157.3 million, or 1.03 percent of net loans and leases, at September 30, 2020, compared with $116.0 million, or 0.82 percent of net loans and leases, at September 30, 2019, and $155.4 million, or 1.01 percent of net loans and leases, at June 30, 2020.  Other real estate owned was $6.4 million at September 30, 2020, compared with $7.9 million at September 30, 2019 and $7.2 million at June 30, 2020.

Noninterest Revenue

Noninterest revenue was $89.9 million for the third quarter of 2020, compared with $75.4 million for the third quarter of 2019 and $91.3 million for the second quarter of 2020.  These results include a positive mortgage servicing rights ("MSR") valuation adjustment of $0.4 million for the third quarter of 2020, compared with a negative MSR valuation adjustment of $4.0 million for the third quarter of 2019 and a negative MSR valuation adjustment of $2.4 million for the second quarter of 2020.  Valuation adjustments in the MSR asset are driven primarily by fluctuations in interest rates period over period.   

Mortgage production and servicing revenue was $26.7 million for the third quarter of 2020, compared with $11.3 million for the third quarter of 2019 and $31.9 million for the second quarter of 2020.  Mortgage origination volume for the third quarter of 2020 was $937.7 million, compared with $536.1 million for the third quarter of 2019 and $989.0 million for the second quarter of 2020.  Home purchase money volume was $568.4 million for the third quarter of 2020, compared with $353.9 million for the third quarter of 2019 and $522.6 million for the second quarter of 2020.  Of the total mortgage origination volume for the third quarter of 2020, $218.0 million was portfolio loans, compared with $112.1 million for the third quarter of 2019 and $251.7 million for the second quarter of 2020.

Credit card, debit card, and merchant fee revenue was $9.9 million for the third quarter of 2020, compared with $9.8 million for the third quarter of 2019 and $9.1 million for the second quarter of 2020.  Deposit service charge revenue was $8.9 million for the third quarter of 2020, compared with $11.9 million for the third quarter of 2019 and $7.6 million for the second quarter of 2020.  Wealth management revenue was $6.5 million for the third quarter of 2020, compared with $6.7 million for the third quarter of 2019 and $6.4 million for the second quarter of 2020.  Insurance commission revenue was $32.8 million for the third quarter of 2020, compared with $31.5 million for the third quarter of 2019 and $33.1 million for the second quarter of 2020.  Other noninterest revenue was $4.8 million for the third quarter of 2020, compared with $8.1 million for the third quarter of 2019 and $5.4 million for the second quarter of 2020. 

Noninterest Expense

Noninterest expense for the third quarter of 2020 was $155.5 million, compared with $159.6 million for the third quarter of 2019 and $162.5 million for the second quarter of 2020.  Salaries and employee benefits expense was $104.2 million for the third quarter of 2020, compared with $101.2 million for the third quarter of 2019 and $108.1 million for the second quarter of 2020.  Occupancy expense was $13.1 million for the third quarter of 2020, compared with $12.3 million for the third quarter of 2019 and $12.9 million for the second quarter of 2020.  Other noninterest expense was $32.2 million for the third quarter of 2020, compared with $39.4 million for the third quarter of 2019 and $34.8 million for the second quarter of 2020.  Additionally, merger-related expense for the third quarter of 2020 was $0.1 million, compared with merger-related expense of $4.1 million for the third quarter of 2019 and $0.5 million for the second quarter of 2020. 

Capital Management

The Company's ratio of shareholders' equity to assets was 11.81 percent at September 30, 2020, compared with 12.54 percent at September 30, 2019 and 11.76 percent at June 30, 2020.  The ratio of tangible common shareholders' equity to tangible assets was 7.56 percent at September 30, 2020, compared with 8.47 percent at September 30, 2019 and 7.44 percent at June 30, 2020.  The $1.2 billion in PPP loans had an adverse impact of approximately 43 basis points on tangible common shareholders' equity to tangible assets at September 30, 2020.

In November 2019, the Company completed an underwritten public offering of $300.0 million aggregate principal amount of its 4.125 percent Fixed-to-Floating Rate Subordinated Notes due November 20, 2029 (the "Notes") and an underwritten public offering of $172.5 million  of its 5.50 percent Series A Non-Cumulative Perpetual Preferred Stock, par value $0.01 per share (the "Series A Preferred Stock"). For additional details regarding the terms of the Notes, including those related to interest rates and interest payment dates, redemption, seniority, and maturity, and the terms of the Series A Preferred Stock, including those related to dividends and dividend payment dates, redemption, seniority, and maturity, please refer to the offering circulars related to each offering that the Company filed with the Federal Deposit Insurance Corporation ("FDIC") on November 15, 2019.

During the third quarter of 2020, the Company did not repurchase any shares of its common stock pursuant to its share repurchase program.  As of September 30, 2020, the Company had 4,700,000 remaining shares available for repurchase under its current share repurchase authorization which expires on December 31, 2020.

Estimated regulatory capital ratios at September 30, 2020 were calculated in accordance with the Basel III capital framework as well as the interagency interim final rule published on March 31, 2020 entitled "Revised Transition of the Current Expected Credit Losses Methodology for Allowances".  The Company is a "well capitalized" bank, as defined by federal regulations, at September 30, 2020, with Tier 1 risk-based capital of 11.65 percent and total risk-based capital of 14.20 percent, compared with required minimum levels of 8 percent and 10 percent, respectively, in order to qualify for "well capitalized" classification. 

Summary

Rollins concluded, "As we look to the remainder of 2020 and into 2021, we will not be immune to the headwinds facing our industry and our nation's economy.  While we expect our mortgage operation to continue to provide a significant component of our revenue, it's not reasonable to believe that production volume can remain at the level that we have seen thus far in 2020.  In addition, it's inevitable there will be some customers experience financial hardships as the economic impact of this pandemic continues.  Beyond continuing to ensure we protect the health of our teammates and customers, monitoring credit quality and working through issues with our customers will be our top priority.  Given the changes in customer behavior as well as lessons learned through this pandemic, banks like ours will need to continue to automate processes and rethink the workplace while ensuring the customer experience is a top priority. As we work through our 2021 strategic planning and budgeting process, our team is working diligently to identify ways to improve our cost structure including continued investments in technology as well as an enhanced focus on optimizing our branch structure.  I'm confident that the strength of both our balance sheet and capital position will aide us in navigating this economic cycle and continuing to improve shareholder value."

TRANSACTIONS

Texas First Bancshares, Inc.

On January 1, 2020, the Company completed the merger with Texas First Bancshares, Inc., the parent company of Texas First State Bank, (collectively referred to as "Texas First"), pursuant to which Texas First was merged with and into the Company.  Texas First operated 6 full-service banking offices in the Waco, Texas and Killeen-Temple, Texas metropolitan statistical areas ("MSA").  As of January 1, 2020, Texas First collectively reported total assets of $396.9 million, total loans of $185.7 million and total deposits of $369.3 million.  Under the terms of the definitive merger agreement, the Company issued approximately 1,040,000 shares of the Company's common stock plus $13.0 million in cash for all outstanding shares of Texas First.  For more information regarding this transaction, see our Current Report on Form 8-K that was filed with the FDIC on January 2, 2020.  The purchase accounting for this transaction is considered provisional as management continues to identify and assess information regarding the nature of the acquired assets and liabilities and reviews the associated valuation assumptions and methodologies.

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 24 of this news release.

Statement Regarding Impact of COVID-19 Pandemic

The Company prioritizes the health and safety of its teammates and customers, and it will continue to do so throughout the duration of the pandemic.  At the same time, the Company remains focused on improving shareholder value, managing credit exposure, challenging expenses, enhancing the customer experience and supporting the communities it serves. Lastly, as a Small Business Administration ("SBA") Preferred Lender, the Company actively participated in the SBA's PPP for the betterment of its customers and the communities that it serves.

In the presentation that accompanies this news release and in its earnings conference call, the Company has sought and will seek to describe the historical and future impact of the COVID-19 pandemic on the Company's assets, business, cash flows, financial condition, liquidity, prospects and results of operations, including the information and discussions regarding the increases in its provision and allowance for credit losses and the discussion regarding negative pressure to its net interest revenue and net interest margin.  Although the Company believes that the statements that pertain to future events, results and trends and their impact on the Company's business are reasonable at the present time, those statements are not historical facts and are based upon current assumptions, expectations, estimates and projections, many of which, by their nature, are beyond the Company's control.  Accordingly, all discussions regarding future events, results and trends and their impact on the Company's business, even in the near term, are necessarily uncertain given the fluid and evolving nature of the pandemic.

If the health, logistical or economic effects of the pandemic worsen, or if the assumptions, expectations, estimates or projections that underlie the Company's statements regarding future effects or trends prove to be incorrect, then the Company's actual assets, business, cash flows, financial condition, liquidity, prospects and results of operations may be materially and adversely impacted in ways that the Company cannot reasonably forecast.

Accordingly, when reading this news release and the accompanying presentation and when listening to the earnings conference call, undue reliance should not be placed upon any statement pertaining to future events, results and trends and their impact on the Company's business in future periods.

Conference Call and Webcast

The Company will conduct a conference call to discuss its third quarter 2020 financial results on October 20, 2020, at 10:00 a.m. (Central Time).  This conference call will be an interactive session between management and analysts. Interested parties may listen to this live conference call via Internet webcast by accessing www.bancorpsouth.investorroom.com/webcasts. The webcast will also be available in archived format at the same address.

About BancorpSouth Bank

BancorpSouth Bank (NYSE: BXS) is headquartered in Tupelo, Mississippi, with approximately $24 billion in assets.  BancorpSouth operates approximately 310 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 made in this news release are not statements of historical fact and constitute "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbor created under the Private Securities Litigation Reform Act of 1995.  These statements are often, but not always, made through the use of words or phrases such as "may," "should," "could," "predict," "potential," "believe," "will likely result," "expect," "continue," "will," "anticipate," "seek," "aspire," "roadmap," "achieve," "estimate," "intend," "plan," "project," "projection," "forecast," "goal," "target," "would," and "outlook," or the negative version of those words or other comparable words of a future or forward-looking nature. These forward-looking statements include, without limitation, those relating to the impact of the COVID-19 pandemic on the Company's assets, business, cash flows, financial condition, liquidity, prospects and results of operations, the opportunities to enhance market share in certain markets and market acceptance of the Company generally in new markets, the Company's ability to operate its regulatory compliance programs consistent with federal, state and local laws, including its Bank Secrecy Act ("BSA") and anti-money laundering ("AML") compliance program and its fair lending compliance program, the Company's ability to pay dividends or coupons on Series A Preferred Stock or the Notes or its ability to ultimately repay the Notes or otherwise comply with the terms of such instruments, amortization expense for intangible assets, goodwill impairments, loan impairments, utilization of appraisals and inspections for real estate loans, maturity, renewal or extension of construction, acquisition and development loans, net interest revenue and net interest margin, 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, the ability of the Company to access successfully the capital and credit markets when needed or as desired, sources of funding, 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, and the impact of certain claims and ongoing, pending or threatened litigation, administrative and investigatory matters.

These forward-looking statements are not historical facts, and are based upon current expectations, estimates and projections about the Company's industry, management's beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain, involve risk and are beyond the Company's control. The inclusion of these forward-looking statements should not be regarded as a representation by the Company or any other person that such expectations, estimates and projections will be achieved. Accordingly, the Company cautions that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict and that are beyond the Company's control. These risks, assumptions and uncertainties may include, but are not limited to, the impact of the COVID-19 pandemic on the Company's assets, business, cash flows, financial condition, liquidity, prospects and results of operations, increases in the provision and allowance for credit losses and interest rate pressure on net interest revenue and net interest margin, 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 lack of availability of the Company's filings mandated by the Exchange Act from the Securities and Exchange Commission's publicly available website after November 1, 2017, 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 Wall Street Reform, Consumer Protection Act, and the Coronavirus Aid, Relief and Economic Security Act established in response to the COVID-19 pandemic and any similar or related rules and regulations, 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, dispositions and other strategic growth opportunities and initiatives, the Company's growth strategy, interruptions or breaches in the Company's information system security, the failure of certain third-party vendors to perform, unfavorable ratings by rating agencies, dilution caused by the Company's issuance of any additional shares of its capital stock to raise capital or acquire other banks, bank holding companies, financial holding companies and insurance agencies, the utilization of the Company's share repurchase program, the implementation and execution of cost saving initiatives, other factors generally understood to affect the assets, business, cash flows, financial condition, liquidity, prospects and/or results of operations of financial services companies, and other factors detailed from time to time in the Company's press and news releases, reports and other filings with the FDIC.

The foregoing factors should not be construed as exhaustive and should be read in conjunction with those factors that are set forth from time to time in our periodic and current reports filed with the FDIC, including those factors included in our Annual Report on Form 10-K for the year ended December 31, 2019 under the heading "Item 1A. Risk Factors," in our Quarterly Reports on Form 10-Q and in our Current Reports on Form 8-K.

Although the Company believes that the expectations reflected in these forward-looking statements are reasonable as of the date of this news release, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. If one or more events related to these or other risks or uncertainties materialize, or if the Company's underlying assumptions prove to be incorrect, actual results may differ materially from the Company's forward-looking statements.  Accordingly, undue reliance should not be placed on any such forward-looking statements. Any forward-looking statement speaks only as of the date of this news release, and the Company does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.  New risks and uncertainties may emerge from time to time, and it is not possible for the Company to predict their occurrence or how they will affect the Company.

BancorpSouth Bank

Selected Financial Information

(Dollars in thousands, except per share data)

(Unaudited)


















Quarter Ended

Quarter Ended

Quarter Ended

Quarter Ended

Quarter Ended

Year to Date

Year to Date


9/30/2020

6/30/2020

3/31/2020

12/31/2019

9/30/2019

9/30/2020

9/30/2019

Earnings Summary:








Interest revenue

$            200,670

$            197,472

$            202,064

$            203,812

$            199,004

$           600,206

$          571,200

Interest expense

24,739

26,902

34,534

33,038

32,405

86,175

92,030

Net interest revenue

175,931

170,570

167,530

170,774

166,599

514,031

479,170

Provision for credit losses

15,000

20,000

46,000

-

500

81,000

1,500

Net interest revenue, after provision








   for credit losses

160,931

150,570

121,530

170,774

166,099

433,031

477,670

Noninterest revenue

89,924

91,258

76,496

74,697

75,432

257,678

205,984

Noninterest expense

155,505

162,504

168,006

162,351

159,614

486,015

467,256

Income before income taxes

95,350

79,324

30,020

83,120

81,917

204,694

216,398

Income tax expense

21,525

18,164

5,759

17,271

18,160

45,448

47,986

Net income

$              73,825

$              61,160

$              24,261

$              65,849

$              63,757

$           159,246

$          168,412

Less: Preferred dividends

2,372

2,372

2,372

-

-

7,116

-

Net income available to common shareholders

$              71,453

$              58,788

$              21,889

$              65,849

$              63,757

$           152,130

$          168,412









Balance Sheet - Period End Balances








Total assets

$       23,555,422

$       23,236,176

$       21,032,524

$       21,052,576

$       19,850,225

$      23,555,422

$     19,850,225

Total earning assets

21,340,371

21,119,073

18,939,750

18,891,021

17,619,053

21,340,371

17,619,053

Total securities

5,659,785

4,973,171

4,468,340

4,481,974

2,766,446

5,659,785

2,766,446

Loans and leases, net of unearned income

15,327,735

15,427,421

14,224,645

14,089,683

14,120,783

15,327,735

14,120,783

Allowance for credit losses

250,624

237,025

218,199

119,066

116,908

250,624

116,908

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

1,320,671

1,510,008

1,661,329

1,628,265

1,845,056

1,320,671

1,845,056

Paycheck protection program (PPP) loans (included in loans and leases above)

1,212,246

1,192,715

-

-

-

1,212,246

-

Remaining loan mark on acquired loans

16,198

19,977

22,286

46,240

53,137

16,198

53,137

Total deposits

19,412,979

19,179,486

16,887,916

16,410,699

16,025,756

19,412,979

16,025,756

Total deposits and securities sold under agreement to repurchase

20,024,434

19,849,502

17,426,878

16,924,121

16,555,544

20,024,434

16,555,544

Long-term debt

4,508

4,615

4,721

5,053

5,161

4,508

5,161

Junior subordinated debt securities

297,074

296,898

296,723

296,547

-

297,074

-

Total shareholders' equity

2,782,539

2,732,687

2,681,904

2,685,017

2,489,427

2,782,539

2,489,427

Common shareholders' equity

2,615,546

2,565,694

2,514,911

2,517,996

2,489,427

2,615,546

2,489,427









Balance Sheet - Average Balances








Total assets

$       23,318,877

$       22,707,686

$       21,189,637

$       20,243,023

$       19,170,926

$      22,408,734

$     18,618,066

Total earning assets

21,241,896

20,594,889

19,113,449

18,125,676

17,148,574

20,320,121

16,669,610

Total securities

5,309,982

4,437,614

4,461,298

3,555,014

2,738,691

4,738,392

2,725,595

Loans and leases, net of unearned income

15,369,684

15,114,732

14,226,788

14,061,118

13,726,755

14,905,435

13,453,898

PPP loans (included in loans and leases above)

1,207,097

975,029

-

-

-

729,126

-

Total deposits

19,258,930

18,454,472

16,905,229

16,218,715

15,509,511

18,210,053

15,015,973

Total deposits and securities sold under agreement to repurchase

19,940,330

19,098,599

17,446,936

16,748,932

16,017,069

18,832,679

15,499,616

Long-term debt

4,592

4,699

4,800

5,138

5,303

4,697

5,509

Junior subordinated debt securities

296,969

296,793

296,617

135,535

-

296,794

-

Total shareholders' equity

2,729,870

2,738,434

2,658,699

2,572,750

2,378,882

2,709,077

2,297,322

Common shareholders' equity

2,562,877

2,571,441

2,491,678

2,498,033

2,378,882

2,542,075

2,297,322









Nonperforming Assets:








Non-accrual loans and leases

$            122,108

$            126,753

$            110,074

$              78,796

$              76,383

$           122,108

$            76,383

Loans and leases 90+ days past due, still accruing

17,641

9,877

7,272

17,531

16,659

17,641

16,659

Restructured loans and leases, still accruing

11,154

11,575

11,284

15,184

15,033

11,154

15,033

Non-performing loans (NPLs)

150,903

148,205

128,630

111,511

108,075

150,903

108,075

Other real estate owned

6,397

7,164

9,200

6,746

7,929

6,397

7,929

Non-performing assets (NPAs)

$            157,300

$            155,369

$            137,830

$            118,257

$            116,004

$           157,300

$          116,004









Financial Ratios and Other Data:








Return on average assets

1.26%

1.08%

0.46%

1.29%

1.32%

0.95%

1.21%

Operating return on average assets-excluding MSR*

1.26%

1.12%

0.70%

1.33%

1.44%

1.03%

1.35%

Return on average shareholders' equity

10.76%

8.98%

3.67%

10.15%

10.63%

7.85%

9.80%

Operating return on average shareholders' equity-excluding MSR*

10.72%

9.29%

5.56%

10.46%

11.63%

8.56%

10.92%

Return on average common shareholders' equity

11.09%

9.19%

3.53%

10.46%

10.63%

7.99%

9.80%

Operating return on average common shareholders' equity-excluding MSR*

11.05%

9.53%

5.55%

10.78%

11.63%

8.75%

10.92%

Return on average tangible equity*

16.08%

13.43%

5.56%

15.47%

16.23%

11.79%

14.88%

Operating return on average tangible equity-excluding MSR*

16.03%

13.89%

8.42%

15.94%

17.75%

12.85%

16.57%

Return on average tangible common equity*

17.13%

14.20%

5.54%

16.19%

16.23%

12.41%

14.88%

Operating return on average tangible common equity-excluding MSR*

17.08%

14.71%

8.71%

16.68%

17.75%

13.58%

16.57%

Pre-tax pre-provision net revenue to total average assets*

1.88%

1.81%

1.74%

1.68%

1.87%

1.81%

1.75%

Noninterest income to average assets

1.53%

1.62%

1.45%

1.46%

1.56%

1.54%

1.48%

Noninterest expense to average assets

2.65%

2.88%

3.19%

3.18%

3.30%

2.90%

3.36%

Net interest margin-fully taxable equivalent

3.31%

3.35%

3.54%

3.76%

3.88%

3.39%

3.87%

Net interest margin-fully taxable equivalent, excluding net accretion








  on acquired loans and leases

3.23%

3.30%

3.48%

3.61%

3.76%

3.33%

3.76%

Net interest rate spread

3.06%

3.08%

3.24%

3.44%

3.56%

3.12%

3.56%

Efficiency ratio (tax equivalent)*

58.36%

61.89%

68.65%

65.92%

65.68%

62.81%

67.90%

Operating efficiency ratio-excluding MSR (tax equivalent)*

58.41%

61.16%

63.89%

64.39%

63.01%

61.12%

65.07%

Loan/deposit ratio

78.96%

80.44%

84.23%

85.86%

88.11%

78.96%

88.11%

Price to earnings multiple (close)

9.18

11.15

9.46

13.60

13.77

9.18

13.77

Market value to common book value

75.99%

90.91%

77.21%

130.38%

124.62%

75.99%

124.62%

Market value to common book value (avg)

83.75%

84.79%

107.86%

128.18%

120.12%

90.07%

122.35%

Market value to common tangible book value

116.01%

140.44%

120.81%

201.13%

193.15%

116.01%

193.15%

Market value to common tangible book value (avg)

127.86%

130.99%

168.76%

197.74%

186.17%

137.50%

189.63%

Employee FTE

4,691

4,742

4,737

4,693

4,674

4,691

4,674









*Denotes non-GAAP financial measure.  Refer to related disclosure and reconciliation on pages 24 and 25.

 

BancorpSouth Bank

Selected Financial Information

(Dollars in thousands, except per share data)

(Unaudited)


















Quarter Ended

Quarter Ended

Quarter Ended

Quarter Ended

Quarter Ended

Year to Date

Year to Date


9/30/2020

6/30/2020

3/31/2020

12/31/2019

9/30/2019

9/30/2020

9/30/2019









Credit Quality Ratios:








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

0.04%

0.03%

0.39%

(0.06%)

(0.02%)

0.15%

0.05%

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

0.39%

0.53%

1.30%

0.00%

0.01%

0.73%

0.01%

Allowance for credit losses to net loans and leases

1.64%

1.54%

1.53%

0.85%

0.83%

1.64%

0.83%

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

1.78%

1.67%

1.53%

0.85%

0.83%

1.78%

0.83%

Allowance for credit losses to non-performing loans and leases

166.08%

159.93%

169.63%

106.78%

108.17%

166.08%

108.17%

Allowance for credit losses to non-performing assets

159.33%

152.56%

158.31%

100.68%

100.78%

159.33%

100.78%

Non-performing loans and leases to net loans and leases

0.98%

0.96%

0.90%

0.79%

0.77%

0.98%

0.77%

Non-performing loans and leases to net loans and leases, excluding








  acquired loans and leases

0.74%

0.63%

0.64%

0.65%

0.66%

0.74%

0.66%

Non-performing assets to net loans and leases

1.03%

1.01%

0.97%

0.84%

0.82%

1.03%

0.82%

Non-performing assets to net loans and leases, excluding








  acquired loans and leases

0.78%

0.68%

0.68%

0.68%

0.69%

0.78%

0.69%









Equity Ratios:








Total shareholders' equity to total assets

11.81%

11.76%

12.75%

12.75%

12.54%

11.81%

12.54%

Total common shareholders' equity to total assets

11.10%

11.04%

11.96%

11.96%

12.54%

11.10%

12.54%

Tangible shareholders' equity to tangible assets*

8.30%

8.18%

8.82%

8.92%

8.47%

8.30%

8.47%

Tangible shareholders' equity to tangible assets-excluding PPP loans*

8.77%

8.65%

8.82%

8.92%

8.47%

8.77%

8.47%

Tangible common shareholders' equity to tangible assets*

7.56%

7.44%

7.99%

8.09%

8.47%

7.56%

8.47%

Tangible common shareholders' equity to tangible assets-excluding PPP loans*

7.99%

7.86%

7.99%

8.09%

8.47%

7.99%

8.47%









Capital Adequacy:








Common  Equity Tier 1 capital

10.64%

10.21%

10.11%

10.57%

10.54%

10.64%

10.54%

Tier 1 capital

11.65%

11.22%

11.13%

11.60%

10.54%

11.65%

10.54%

Total capital

14.20%

13.79%

13.75%

14.17%

11.28%

14.20%

11.28%

Tier 1 leverage capital

8.59%

8.54%

8.90%

9.69%

9.14%

8.59%

9.14%

   Estimated for current quarter
















Common Share Data:








Basic earnings per share

$                  0.70

$                  0.57

$                  0.21

$                  0.63

$                  0.63

1.47

$                1.68

Diluted earnings per share

0.69

0.57

0.21

0.63

0.63

1.47

1.67

Operating earnings per share*

0.70

0.57

0.25

0.67

0.66

1.51

1.73

Operating earnings per share- excluding MSR*

0.69

0.59

0.33

0.65

0.69

1.61

1.86

Cash dividends per share

0.19

0.19

0.19

0.19

0.19

0.56

0.53

Book value per share

25.50

25.01

24.50

24.09

23.76

25.50

23.76

Tangible book value per share*

16.71

16.19

15.66

15.62

15.33

16.71

15.33

Market value per share (last)

19.38

22.74

18.92

31.41

29.61

19.38

29.61

Market value per share (high)

24.29

25.93

31.61

32.97

30.54

31.61

33.45

Market value per share (low)

18.11

17.21

17.24

28.13

26.47

17.21

25.76

Market value per share (avg)

21.36

21.21

26.43

30.88

28.54

22.97

29.07

Dividend payout ratio

26.56%

32.29%

88.20%

29.43%

29.36%

37.64%

31.31%

Total shares outstanding

102,558,459

102,566,301

102,632,484

104,522,804

104,775,876

102,558,459

104,775,876

Average shares outstanding - basic

102,564,466

102,603,525

104,354,328

104,739,906

101,168,730

103,174,106

100,428,809

Average shares outstanding - diluted

102,839,749

102,827,225

104,733,897

105,144,032

101,493,247

103,466,957

100,699,510

















Yield/Rate:








(Taxable equivalent basis)








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

4.54%

4.59%

5.00%

5.13%

5.16%

4.70%

5.13%

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








  net accretion on acquired loans and leases

4.44%

4.53%

4.93%

4.95%

5.02%

4.62%

4.99%

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








  net accretion on acquired loans and leases - excluding PPP loans

4.55%

4.67%

4.93%

4.95%

5.02%

4.72%

4.99%

PPP loans

3.11%

2.50%

N/A

N/A

N/A

2.84%

N/A

Available-for-sale securities:








  Taxable

1.64%

1.95%

1.99%

2.00%

2.13%

1.85%

2.09%

  Tax-exempt

3.67%

3.86%

4.44%

4.69%

5.56%

3.97%

4.85%

Short-term, FHLB and other equity investments

0.19%

0.20%

1.53%

1.95%

2.41%

0.47%

2.50%

  Total interest earning assets and revenue

3.77%

3.87%

4.27%

4.48%

4.63%

3.96%

4.61%

Deposits

0.44%

0.50%

0.67%

0.68%

0.71%

0.53%

0.68%

  Demand - interest bearing

0.53%

0.61%

0.84%

0.88%

0.94%

0.66%

0.90%

  Savings

0.18%

0.18%

0.26%

0.28%

0.28%

0.20%

0.29%

  Other time

1.41%

1.54%

1.64%

1.68%

1.67%

1.53%

1.58%

  Total interest bearing deposits

0.65%

0.74%

0.92%

0.96%

0.99%

0.77%

0.95%

Short-term borrowings

0.25%

0.39%

1.25%

1.51%

1.90%

0.63%

2.07%

Total interest bearing deposits and short-term borrowings

0.63%

0.71%

0.95%

1.01%

1.07%

0.76%

1.04%

Junior subordinated debt

4.24%

4.18%

4.42%

4.17%

N/A

4.44%

N/A

Long-term debt

4.85%

4.81%

4.96%

4.83%

4.93%

4.87%

4.89%

  Total interest bearing liabilities and expense

0.71%

0.79%

1.03%

1.04%

1.07%

0.84%

1.05%

Interest bearing liabilities to interest earning assets

65.61%

66.65%

70.81%

69.37%

70.15%

67.58%

70.58%

Net interest tax equivalent adjustment

$                   618

$                   725

$                   714

$                   800

$                   972

$               2,057

$              2,982









*Denotes non-GAAP financial measure.  Refer to related disclosure and reconciliation on pages 24 and 25.

 

BancorpSouth Bank

Consolidated Balance Sheets

(Unaudited)








Sep-20

Jun-20

Mar-20

Dec-19

Sep-19


(Dollars in thousands)

Assets






Cash and due from banks

$                306,164

$                240,354

$                253,495

$                261,773

$                333,108

Interest bearing deposits with other banks






and Federal funds sold

39,782

318,615

29,490

71,233

466,650

Available-for-sale securities, at fair value

5,659,785

4,973,171

4,468,340

4,481,974

2,766,446

Loans and leases*

15,344,006

15,444,794

14,241,912

14,107,743

14,137,563

  Less:  Unearned income

16,271

17,373

17,267

18,060

16,780

             Allowance for credit losses

250,624

237,025

218,199

119,066

116,908

Net loans and leases

15,077,111

15,190,396

14,006,446

13,970,617

14,003,875

Loans held for sale

304,215

391,051

194,321

210,361

229,514

Premises and equipment, net

508,149

504,748

497,669

480,901

480,819

Accrued interest receivable

110,185

101,321

70,463

65,173

62,818

Goodwill

847,531

847,984

848,242

825,679

822,093

Other identifiable intangibles

54,757

56,989

59,345

60,008

61,100

Bank owned life insurance

331,799

329,167

327,312

326,417

328,670

Other real estate owned

6,397

7,164

9,200

6,746

7,929

Other assets

309,547

275,216

268,201

291,694

287,203

Total Assets

$           23,555,422

$           23,236,176

$           21,032,524

$           21,052,576

$           19,850,225

Liabilities






Deposits:






  Demand:  Noninterest bearing

$             6,336,792

$             6,385,370

$             4,861,155

$             4,661,821

$             4,770,907

                  Interest bearing

8,170,402

7,907,637

7,268,053

7,176,934

6,745,329

  Savings

2,325,980

2,234,853

2,013,343

1,937,985

1,898,813

  Other time

2,579,805

2,651,626

2,745,365

2,633,959

2,610,707

Total deposits

19,412,979

19,179,486

16,887,916

16,410,699

16,025,756

Securities sold under agreement to repurchase

611,455

670,016

538,962

513,422

529,788

Federal funds purchased






   and other short-term borrowing

95,217

220

290,224

725,000

480,000

Accrued interest payable

15,286

13,476

17,482

15,124

13,120

Junior subordinated debt securities

297,074

296,898

296,723

296,547

-

Long-term debt

4,508

4,615

4,721

5,053

5,161

Other liabilities

336,364

338,778

314,592

401,714

306,973

Total Liabilities

20,772,883

20,503,489

18,350,620

18,367,559

17,360,798

Shareholders' Equity






Preferred stock

166,993

166,993

166,993

167,021

-

Common stock

256,396

256,416

256,581

261,307

261,940

Capital surplus

565,635

561,541

558,114

605,976

611,115

Accumulated other comprehensive income (loss)

18,490

25,191

17,849

(62,663)

(50,538)

Retained earnings

1,775,025

1,722,546

1,682,367

1,713,376

1,666,910

Total Shareholders' Equity

2,782,539

2,732,687

2,681,904

2,685,017

2,489,427

Total Liabilities & Shareholders' Equity

$           23,555,422

$           23,236,176

$           21,032,524

$           21,052,576

$           19,850,225







*Includes $1.212 billion and $1.193 billion in PPP loans at September 30, 2020 and  June 30, 2020.

 

BancorpSouth Bank

Consolidated Average Balance Sheets

(Unaudited)








Sep-20

Jun-20

Mar-20

Dec-19

Sep-19


(Dollars in thousands)

Assets






Cash and due from banks

$      232,421

$      229,334

$      246,860

$      244,444

$      229,814

Interest bearing deposits with other banks






and Federal funds sold

257,057

760,789

239,766

300,495

486,716

Available-for-sale securities, at fair value

5,309,982

4,437,614

4,461,298

3,555,014

2,738,691

Loans and leases*

15,386,721

15,132,600

14,244,649

14,078,793

13,743,876

  Less:  Unearned income

17,037

17,868

17,861

17,675

17,121

             Allowance for credit losses

236,536

217,508

193,796

117,668

116,232

Net loans and leases

15,133,148

14,897,224

14,032,992

13,943,450

13,610,523

Loans held for sale

296,352

261,377

147,798

173,649

157,691

Premises and equipment, net

507,190

499,767

494,413

481,623

458,758

Accrued interest receivable

104,435

137,456

64,010

60,678

57,941

Goodwill

847,744

848,160

844,635

823,812

761,084

Other identifiable intangibles

56,045

58,280

58,805

60,559

59,253

Bank owned life insurance

330,642

328,037

326,808

328,567

319,894

Other real estate owned

7,754

8,410

8,151

7,820

6,908

Other assets

236,107

241,238

264,101

262,912

283,653

Total Assets

$ 23,318,877

$ 22,707,686

$ 21,189,637

$ 20,243,023

$ 19,170,926

Liabilities






Deposits:






  Demand:  Noninterest bearing

$   6,340,942

$   5,942,570

$   4,717,202

$   4,803,104

$   4,479,698

                  Interest bearing

8,022,755

7,674,479

7,466,674

6,872,921

6,655,962

  Savings

2,280,860

2,152,092

1,975,690

1,913,650

1,869,045

  Other time

2,614,373

2,685,331

2,745,663

2,629,040

2,504,806

Total deposits

19,258,930

18,454,472

16,905,229

16,218,715

15,509,511

Securities sold under agreement to repurchase

681,400

644,127

541,707

530,217

507,558

Federal funds purchased






   and other short-term borrowing

36,696

269,121

502,257

487,272

487,456

Accrued interest payable

15,589

16,268

19,205

14,942

13,756

Junior subordinated debt securities

296,969

296,793

296,617

135,535

-

Long-term debt

4,592

4,699

4,800

5,138

5,303

Other liabilities

294,831

283,772

261,123

278,454

268,460

Total Liabilities

20,589,007

19,969,252

18,530,938

17,670,273

16,792,044

Shareholders' Equity






Preferred stock

166,993

166,993

167,021

74,717

-

Common stock

256,412

256,515

261,065

261,905

254,881

Capital surplus

563,267

559,737

600,880

611,667

538,665

Accumulated other comprehensive income (loss)

24,758

23,016

(36,367)

(53,111)

(52,204)

Retained earnings

1,718,440

1,732,173

1,666,100

1,677,572

1,637,540

Total Shareholders' Equity

2,729,870

2,738,434

2,658,699

2,572,750

2,378,882

Total Liabilities & Shareholders' Equity

$ 23,318,877

$ 22,707,686

$ 21,189,637

$ 20,243,023

$ 19,170,926







*Includes $1.207 billion and $975.0 million in PPP loans for the quarter ended September 30, 2020 and June 30, 2020.

 

BancorpSouth Bank

Consolidated Condensed Statements of Income

(Dollars in thousands, except per share data)

(Unaudited)
















Quarter Ended


Year to Date


Sep-20


Jun-20


Mar-20


Dec-19


Sep-19


Sep-20


Sep-19

INTEREST REVENUE:














Loans and leases

$ 175,810


$ 173,164


$ 177,019


$ 182,269


$ 178,729


$ 525,993


$ 515,156

Deposits with other banks

74


207


739


1,225


2,456


1,020


5,264

Federal funds sold, securities purchased














   under agreement to resell, FHLB and 














      other equity investments

52


178


315


426


735


545


1,651

Available-for-sale securities:














    Taxable

21,280


20,783


21,508


17,241


13,759


63,571


39,419

    Tax-exempt

986


1,178


1,060


1,266


1,883


3,224


5,894

Loans held for sale

2,468


1,962


1,423


1,385


1,442


5,853


3,816

        Total interest revenue

200,670


197,472


202,064


203,812


199,004


600,206


571,200















INTEREST EXPENSE:














Interest bearing demand

10,773


11,631


15,522


15,202


15,689


37,926


43,569

Savings

1,012


943


1,290


1,334


1,341


3,245


4,027

Other time

9,287


10,296


11,168


11,134


10,546


30,751


28,246

Federal funds purchased and securities sold














   under agreement to repurchase

279


291


1,436


1,591


1,857


2,006


5,604

Short-term and long-term debt

49


477


1,857


2,293


2,971


2,383


10,582

Junior subordinated debt

3,338


3,263


3,261


1,482


-


9,862


-

Other

1


1


-


2


1


2


2

        Total interest expense

24,739


26,902


34,534


33,038


32,405


86,175


92,030















        Net interest revenue

175,931


170,570


167,530


170,774


166,599


514,031


479,170

  Provision for credit losses

15,000


20,000


46,000


-


500


81,000


1,500

        Net interest revenue, after provision for














          credit losses

160,931


150,570


121,530


170,774


166,099


433,031


477,670















NONINTEREST REVENUE:














Mortgage banking

27,097


29,557


9,470


10,102


7,289


66,124


9,680

Credit card, debit card and merchant fees

9,938


9,080


9,176


9,836


9,778


28,194


28,820

Deposit service charges

8,892


7,647


11,682


12,193


11,939


28,221


33,822

Security gains(losses), net

18


62


(85)


(41)


117


(5)


215

Insurance commissions

32,750


33,118


29,603


27,648


31,512


95,471


95,643

Wealth management

6,471


6,421


6,570


6,617


6,651


19,462


18,192

Other

4,758


5,373


10,080


8,342


8,146


20,211


19,612

        Total noninterest revenue

89,924


91,258


76,496


74,697


75,432


257,678


205,984















NONINTEREST EXPENSE:














Salaries and employee benefits

104,219


108,103


108,272


97,137


101,154


320,594


299,363

Occupancy, net of rental income

13,053


12,890


12,708


12,267


12,323


38,651


35,862

Equipment

4,519


4,762


4,649


4,725


4,676


13,930


12,987

Deposit insurance assessments

1,522


1,962


1,546


2,200


2,038


5,030


6,943

Other

32,192


34,787


40,831


46,022


39,423


107,810


112,101

        Total noninterest expense

155,505


162,504


168,006


162,351


159,614


486,015


467,256

        Income before income taxes

95,350


79,324


30,020


83,120


81,917


204,694


216,398

Income tax expense

21,525


18,164


5,759


17,271


18,160


45,448


47,986

        Net income

$   73,825


$   61,160


$   24,261


$   65,849


$   63,757


$ 159,246


$ 168,412

Less: Preferred dividends

2,372


2,372


2,372


-


-


7,116


-

        Net income available to common shareholders

$   71,453


$   58,788


$   21,889


$   65,849


$   63,757


$ 152,130


$ 168,412















Net income per common share: Basic

$       0.70


$       0.57


$       0.21


$       0.63


$       0.63


$       1.47


$       1.68

                                                   Diluted

$       0.69


$       0.57


$       0.21


$       0.63


$       0.63


$       1.47


$       1.67

 

BancorpSouth Bank

Selected Loan Data

(Dollars in thousands)

(Unaudited)












Quarter Ended


Sep-20


Jun-20


Mar-20


Dec-19


Sep-19

LOAN AND LEASE PORTFOLIO:










Commercial and industrial










   Commercial and industrial-non real estate

2,937,608


3,038,957


2,008,043


1,979,507


1,887,817

   Commercial and industrial-owner occupied

2,297,008


2,296,287


2,290,585


2,268,813


2,276,338

      Total commercial and industrial

5,234,616


5,335,244


4,298,628


4,248,320


4,164,155

Commercial real estate










   Agricultural

333,839


333,615


339,539


337,349


347,866

   Construction, acquisition and development

1,700,030


1,658,678


1,582,039


1,577,342


1,538,073

   Commercial real estate

3,229,959


3,323,744


3,303,537


3,220,914


3,345,166

      Total commercial real estate

5,263,828


5,316,037


5,225,115


5,135,605


5,231,105

Consumer










   Consumer mortgages

3,704,490


3,646,168


3,572,277


3,543,075


3,519,449

   Home equity

658,708


655,543


686,202


683,515


678,294

   Credit cards

85,760


86,592


93,896


102,559


101,213

      Total consumer

4,448,958


4,388,303


4,352,375


4,329,149


4,298,956

All other

380,333


387,837


348,527


376,609


426,567

      Total loans

$  15,327,735


$  15,427,421


$  14,224,645


$  14,089,683


$  14,120,783











ALLOWANCE FOR CREDIT LOSSES:










Balance, beginning of period

$      237,025


$      218,199


$      119,066


$       116,908


$      115,691











Impact of adopting ASC 326 - cumulative effect adjustment

-


-


40,000


-


-











Impact of adopting ASC 326 - purchased loans with credt










   deterioration

-


-


22,634


-


-











Loans and leases charged-off:










Commercial and industrial










   Commercial and industrial-non real estate

(560)


(1,506)


(10,792)


(1,273)


(218)

   Commercial and industrial-owner occupied

(441)


(13)


(184)


(192)


(65)

     Total commercial and industrial

(1,001)


(1,519)


(10,976)


(1,465)


(283)

Commercial real estate










   Agricultural

-


(21)


(65)


(11)


-

   Construction, acquisition and development

-


(9)


(3,173)


(26)


-

   Commercial real estate

(738)


-


(67)


-


(49)

     Total commercial real estate

(738)


(30)


(3,305)


(37)


(49)

Consumer










   Consumer mortgages

(81)


(124)


(524)


(687)


(255)

   Home equity

(41)


(162)


(236)


(173)


(39)

   Credit cards

(682)


(703)


(798)


(797)


(631)

     Total consumer

(804)


(989)


(1,558)


(1,657)


(925)

All other

(599)


(396)


(914)


(965)


(895)

     Total loans charged-off

(3,142)


(2,934)


(16,753)


(4,124)


(2,152)











Recoveries:










Commercial and industrial










   Commercial and industrial-non real estate

294


277


355


353


835

   Commercial and industrial-owner occupied

163


136


1,179


30


49

     Total commercial and industrial

457


413


1,534


383


884

Commercial real estate










   Agricultural

3


6


6


4


3

   Construction, acquisition and development

55


172


245


584


480

   Commercial real estate

209


50


135


4,212


29

     Total commercial real estate

267


228


386


4,800


512

Consumer










   Consumer mortgages

352


345


397


407


278

   Home equity

132


259


80


216


731

   Credit cards

270


195


285


218


224

     Total consumer

754


799


762


841


1,233

All other

263


320


344


258


240

     Total recoveries

1,741


1,760


3,026


6,282


2,869











Net (charge-offs)recoveries

(1,401)


(1,174)


(13,727)


2,158


717











Initial allowance on loans purchased with credit deterioration

-


-


4,226


-


-











Provision:










   Initial provision for loans acquired during the quarter

-


-


1,000


-


-

   Provision for credit losses related to loans and leases

15,000


20,000


45,000


-


500

     Total provision

15,000


20,000


46,000


-


500











Balance, end of period

$      250,624


$      237,025


$      218,199


$       119,066


$      116,908











Average loans for period

$ 15,369,684


$ 15,114,732


$ 14,226,788


$ 14,061,118


$ 13,726,755











Ratio:










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

0.04%


0.03%


0.39%


(0.06%)


(0.02%)

 

BancorpSouth Bank

Selected Loan Data

(Dollars in thousands)

(Unaudited)














Quarter Ended



Sep-20


Jun-20


Mar-20


Dec-19


Sep-19

BXS ORIGINATED LOANS AND LEASES:






















Loans and leases charged off:











Commercial and industrial











   Commercial and industrial-non real estate


$           (490)


$          (420)


$          (230)


$           (844)


$          (185)

   Commercial and industrial-owner occupied


(434)


(13)


(19)


(184)


(65)

     Total commercial and industrial


(924)


(433)


(249)


(1,028)


(250)

Commercial real estate











   Agricultural


-


-


(65)


(6)


-

   Construction, acquisition and development


-


-


(121)


(26)


-

   Commercial real estate


(155)


-


(67)


-


(49)

     Total real estate


(155)


-


(253)


(32)


(49)

Consumer











   Consumer mortgages


(70)


(113)


(357)


(648)


(255)

   Home equity


(41)


(162)


(236)


(173)


(39)

   Credit cards


(682)


(703)


(798)


(797)


(631)

     Total consumer


(793)


(978)


(1,391)


(1,618)


(925)

All other


(459)


(288)


(704)


(782)


(848)

     Total loans charged off


(2,331)


(1,699)


(2,597)


(3,460)


(2,072)












Recoveries:











Commercial and industrial











   Commercial and industrial-non real estate


231


210


325


277


833

   Commercial and industrial-owner occupied


163


136


1,177


30


49

     Total commercial and industrial


394


346


1,502


307


882

Commercial real estate











   Agricultural


3


5


4


4


3

   Construction, acquisition and development


55


170


244


583


480

   Commercial real estate


208


50


135


4,212


29

     Total real estate


266


225


383


4,799


512

Consumer











   Consumer mortgages


350


343


395


405


275

   Home equity


130


258


79


215


729

   Credit cards


270


195


285


218


224

     Total consumer


750


796


759


838


1,228

All other


235


275


316


245


226

     Total recoveries


1,645


1,642


2,960


6,189


2,848












Net (charge-offs)/recoveries


$           (686)


$            (57)


$           363


$          2,729


$            776

 

BancorpSouth Bank

Selected Loan Data

(Dollars in thousands)

(Unaudited)












Quarter Ended


Sep-20


Jun-20


Mar-20


Dec-19


Sep-19

ACQUIRED LOANS AND LEASES:




















Loans and leases charged off:










Commercial and industrial










   Commercial and industrial-non real estate

$             (70)


$       (1,086)


$      (10,562)


$           (429)


$            (33)

   Commercial and industrial-owner occupied

(7)


-


(165)


(8)


-

     Total commercial and industrial

(77)


(1,086)


(10,727)


(437)


(33)

Commercial real estate










   Agricultural

-


(21)


-


(5)


-

   Construction, acquisition and development

-


(9)


(3,052)


-


-

   Commercial real estate

(583)


-


-


-


-

     Total real estate

(583)


(30)


(3,052)


(5)


-

Consumer










   Consumer mortgages

(11)


(11)


(167)


(39)


-

   Home equity

-


-


-


-


-

   Credit cards

-


-


-


-


-

     Total consumer

(11)


(11)


(167)


(39)


-

All other

(140)


(108)


(210)


(183)


(47)

     Total loans charged off

(811)


(1,235)


(14,156)


(664)


(80)











Recoveries:










Commercial and industrial










   Commercial and industrial-non real estate

63


67


30


76


2

   Commercial and industrial-owner occupied

-


-


2


-


-

     Total commercial and industrial

63


67


32


76


2

Commercial real estate










   Agricultural

-


1


2


-


-

   Construction, acquisition and development

-


2


1


1


-

   Commercial real estate

1


-


-


-


-

     Total real estate

1


3


3


1


-

Consumer










   Consumer mortgages

2


2


2


2


3

   Home equity

2


1


1


1


2

   Credit cards

-


-


-


-


-

     Total consumer

4


3


3


3


5

All other

28


45


28


13


14

     Total recoveries

96


118


66


93


21











Net (charge-offs)/recoveries

$           (715)


$       (1,117)


$      (14,090)


$           (571)


$            (59)

 

BancorpSouth Bank

Selected Loan Data

(Dollars in thousands)

(Unaudited)












Quarter Ended


Sep-20


Jun-20


Mar-20


Dec-19


Sep-19

NON-PERFORMING ASSETS










NON-PERFORMING LOANS AND LEASES:










  Nonaccrual Loans and Leases










    Commercial and industrial










       Commercial and industrial-non real estate

$    17,936


$       16,124


$       16,589


$    11,105


$       10,430

       Commercial and industrial-owner occupied

18,343


16,745


11,212


7,838


7,446

         Total commercial and industrial

36,279


32,869


27,801


18,943


17,876

    Commercial real estate










       Agricultural

5,907


5,244


5,454


4,772


4,423

       Construction, acquisition and development

10,434


9,715


13,899


6,225


2,231

       Commercial real estate

32,554


45,047


29,697


16,199


16,823

         Total commercial real estate

48,895


60,006


49,050


27,196


23,477

    Consumer










       Consumer mortgages

32,872


30,672


29,834


28,879


31,744

       Home equity

3,325


2,584


2,597


2,993


2,767

       Credit cards

144


90


122


63


85

         Total consumer

36,341


33,346


32,553


31,935


34,596

    All other

593


532


670


722


434

         Total nonaccrual loans and leases

$  122,108


$      126,753


$      110,074


$    78,796


$       76,383











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

17,641


9,877


7,272


17,531


16,659

  Restructured Loans and Leases, Still Accruing

11,154


11,575


11,284


15,184


15,033

     Total non-performing loans and leases

$  150,903


$      148,205


$      128,630


$  111,511


$      108,075











OTHER REAL ESTATE OWNED:

6,397


7,164


9,200


6,746


7,929











Total Non-performing Assets

$  157,300


$      155,369


$      137,830


$  118,257


$      116,004











  BXS originated assets

$  109,418


$       94,155


$       85,908


$    78,295


$       84,413

  Acquired assets

47,882


61,214


51,922


39,962


31,591

Total Non-performing Assets

$  157,300


$      155,369


$      137,830


$  118,257


$      116,004











Additions to Nonaccrual Loans and Leases During the Quarter

$    19,973


$       36,619


$       47,523


$    25,147


$       26,331











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










    BXS originated loans

$    42,978


$       35,002


$       54,315


$    44,559


$       40,668

    Acquired loans

5,694


10,450


14,405


23,054


16,741

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

$    48,672


$       45,452


$       68,720


$    67,613


$       57,409

 

BancorpSouth Bank

Selected Loan Data

(Dollars in thousands)

(Unaudited)












September 30, 2020








Purchased





Special





Credit




Pass

Mention

Substandard

Doubtful

Loss

Impaired

Deteriorated (Loss)


Total

LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE:










Commercial and industrial










   Commercial and industrial-non real estate

$   2,875,468

$                -

$       47,526

$        178

$                -

$    3,664

$              10,772


$          2,937,608

   Commercial and industrial-owner occupied

2,224,302

-

56,919

-

-

12,116

3,671


2,297,008

     Total commercial and industrial

5,099,770

-

104,445

178

-

15,780

14,443


5,234,616

Commercial real estate










   Agricultural

324,010

-

7,109

-

-

725

1,995


333,839

   Construction, acquisition and development

1,656,961

-

34,197

-

-

2,961

5,911


1,700,030

   Commercial real estate

3,070,472

-

127,835

-

-

27,493

4,159


3,229,959

     Total commercial real estate

5,051,443

-

169,141

-

-

31,179

12,065


5,263,828

Consumer










   Consumer mortgages

3,615,071

-

85,827

-

-

2,859

733


3,704,490

   Home equity

651,525

-

7,183

-

-

-

-


658,708

   Credit cards

85,760

-

-

-

-

-

-


85,760

     Total consumer

4,352,356

-

93,010

-

-

2,859

733


4,448,958

All other

374,374

-

5,887

-

-

-

72


380,333

     Total loans

$ 14,877,943

$                -

$      372,483

$        178

$                -

$  49,818

$              27,313


$         15,327,735











  BXS originated loans

$ 13,592,460

$                -

$      252,875

$        178

$                -

$  30,909

$                        -


$         13,876,422

  Acquired loans*

1,285,483

-

119,608

-

-

18,909

27,313


1,451,313

     Total Loans

$ 14,877,943

$                -

$      372,483

$        178

$                -

$  49,818

$              27,313


$         15,327,735












June 30, 2020








Purchased





Special





Credit




Pass

Mention

Substandard

Doubtful

Loss

Impaired

Deteriorated (Loss)


Total

LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE:










Commercial and industrial










   Commercial and industrial-non real estate

$   2,980,373

$                -

$       43,368

$        179

$                -

$    3,789

$              11,248


$          3,038,957

   Commercial and industrial-owner occupied

2,222,454

-

61,204

-

-

8,515

4,114


2,296,287

     Total commercial and industrial

5,202,827

-

104,572

179

-

12,304

15,362


5,335,244

Commercial real estate










   Agricultural

316,390

-

14,159

-

-

714

2,352


333,615

   Construction, acquisition and development

1,626,162

2,741

20,890

-

-

3,122

5,763


1,658,678

   Commercial real estate

3,164,522

-

113,206

-

-

40,672

5,344


3,323,744

     Total commercial real estate

5,107,074

2,741

148,255

-

-

44,508

13,459


5,316,037

Consumer










   Consumer mortgages

3,560,630

-

84,207

-

-

594

737


3,646,168

   Home equity

648,891

-

6,652

-

-

-

-


655,543

   Credit cards

86,592

-

-

-

-

-

-


86,592

     Total consumer

4,296,113

-

90,859

-

-

594

737


4,388,303

All other

379,659

1,523

6,578

-

-

-

77


387,837

     Total loans

$ 14,985,673

$         4,264

$      350,264

$        179

$                -

$  57,406

$              29,635


$         15,427,421











  BXS originated loans

$ 13,516,292

$         2,741

$      231,687

$        179

$                -

$  28,288

$                       -


$         13,779,187

  Acquired loans*

1,469,381

1,523

118,577

-

-

29,118

29,635


1,648,234

     Total Loans

$ 14,985,673

$         4,264

$      350,264

$        179

$                -

$  57,406

$              29,635


$         15,427,421











*Includes certain loans that are no longer included in the "Net book value of acquired loans" on page 10 as a result of maturity, refinance, or other triggering event.

 

BancorpSouth Bank

Selected Loan Data

(Dollars in thousands)

(Unaudited)












Quarter Ended


Sep-20


Jun-20


Mar-20


Dec-19


Sep-19

LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE:









Pass

$ 14,877,943


$ 14,985,673


$ 13,821,602


$ 13,738,979


$  13,782,584

Special Mention

-


4,264


7,129


2,240


2,530

Substandard

372,483


350,264


323,697


298,491


280,059

Doubtful

178


179


191


194


194

Loss

-


-


667


-


-

Impaired

49,818


57,406


40,627


24,094


24,948

Purchased Credit Deteriorated (Loss)

27,313


29,635


30,732


-


-

Purchased Credit Impaired

-


-


-


25,685


30,468

   Total

$ 15,327,735


$ 15,427,421


$ 14,224,645


$ 14,089,683


$  14,120,783











BXS ORIGINATED LOAN PORTFOLIO BY INTERNALLY









   ASSIGNED GRADE:










Pass

$ 13,592,460


$ 13,516,292


$ 12,150,616


$ 12,080,336


$  11,901,311

Special Mention

-


2,741


2,045


-


-

Substandard

252,875


231,687


225,506


202,017


192,133

Doubtful

178


179


191


194


194

Loss

-


-


-


-


-

Impaired

30,909


28,288


22,356


17,110


24,379

Purchased Credit Deteriorated (Loss)

-


-


-


-


-

Purchased Credit Impaired

-


-


-


-


-

   Total

$ 13,876,422


$ 13,779,187


$ 12,400,714


$ 12,299,657


$  12,118,017











ACQUIRED LOAN PORTFOLIO BY INTERNALLY










   ASSIGNED GRADE:










Pass

$  1,285,483


$   1,469,381


$  1,670,986


$   1,658,643


$    1,881,273

Special Mention

-


1,523


5,084


2,240


2,530

Substandard

119,608


118,577


98,191


96,474


87,926

Doubtful

-


-


-


-


-

Loss

-


-


667


-


-

Impaired

18,909


29,118


18,271


6,984


569

Purchased Credit Deteriorated (Loss)

27,313


29,635


30,732


-


-

Purchased Credit Impaired

-


-


-


25,685


30,468

   Total

$  1,451,313


$   1,648,234


$  1,823,931


$   1,790,026


$    2,002,766

 

BancorpSouth Bank

Geographical Information

(Dollars in thousands)

(Unaudited)












September 30, 2020


Alabama










and Florida










Panhandle

Arkansas

Louisiana

Mississippi

Missouri

Tennessee

Texas

Other

Total

LOAN AND LEASE PORTFOLIO:










Commercial and industrial










   Commercial and industrial-non real estate

$    275,711

$    237,417

$    352,908

$    739,580

$      78,753

$    189,569

$ 1,058,826

$       4,844

$   2,937,608

   Commercial and industrial-owner occupied

265,239

185,519

238,839

636,024

62,987

128,232

777,603

2,565

2,297,008

     Total commercial and industrial

540,950

422,936

591,747

1,375,604

141,740

317,801

1,836,429

7,409

5,234,616

Commercial real estate










   Agricultural

26,136

70,808

24,489

71,275

7,362

10,925

122,401

443

333,839

   Construction, acquisition and development

173,894

49,582

83,313

310,262

22,506

104,294

956,179

-

1,700,030

   Commercial real estate

333,696

338,794

304,446

659,031

230,587

222,234

1,141,171

-

3,229,959

     Total commercial real estate

533,726

459,184

412,248

1,040,568

260,455

337,453

2,219,751

443

5,263,828

Consumer










   Consumer mortgages

584,926

335,889

344,462

828,965

109,091

340,804

1,093,636

66,717

3,704,490

   Home equity

102,779

46,382

79,574

227,479

16,660

145,480

40,354

-

658,708

   Credit cards

-

-

-

-

-

-

-

85,760

85,760

     Total consumer

687,705

382,271

424,036

1,056,444

125,751

486,284

1,133,990

152,477

4,448,958

All other

61,241

42,561

34,041

121,036

3,818

19,284

88,622

9,730

380,333

     Total loans

$ 1,823,622

$ 1,306,952

$ 1,462,072

$ 3,593,652

$    531,764

$ 1,160,822

$ 5,278,792

$    170,059

$ 15,327,735











Loan growth, excluding loans acquired during










    the quarter (annualized)

(4.20%)

(6.56%)

(10.84%)

(12.51%)

(7.10%)

1.23%

8.75%

(18.27%)

(2.57%)

Loan growth, excluding PPP loans (annualized)

(5.32%)

(6.83%)

(11.42%)

(12.95%)

(7.59%)

0.91%

8.29%

(17.53%)

(3.07%)











NON-PERFORMING LOANS AND LEASES:










Commercial and industrial










   Commercial and industrial-non real estate

$          582

$       1,363

$       2,160

$       1,742

$       1,799

$          595

$      10,611

$          225

$       19,077

   Commercial and industrial-owner occupied

2,921

2,373

677

3,644

166

-

14,201

-

23,982

     Total commercial and industrial

3,503

3,736

2,837

5,386

1,965

595

24,812

225

43,059

Commercial real estate










   Agricultural

279

618

166

999

-

-

3,850

-

5,912

   Construction, acquisition and development

161

166

2,573

208

-

315

7,270

-

10,693

   Commercial real estate

3,388

33

5,265

876

-

95

24,052

-

33,709

     Total commercial real estate

3,828

817

8,004

2,083

-

410

35,172

-

50,314

Consumer










   Consumer mortgages

9,198

4,069

4,224

13,572

1,032

6,456

11,741

1,912

52,204

   Home equity

363

258

395

996

237

1,228

387

-

3,864

   Credit cards

-

-

-

-

-

-

-

817

817

     Total consumer

9,561

4,327

4,619

14,568

1,269

7,684

12,128

2,729

56,885

All other

197

2

52

95

-

16

279

4

645

     Total loans

$      17,089

$       8,882

$      15,512

$      22,132

$       3,234

$       8,705

$      72,391

$       2,958

$      150,903











NON-PERFORMING LOANS AND LEASES










   AS A PERCENTAGE OF OUTSTANDING:










Commercial and industrial










   Commercial and industrial-non real estate

0.21%

0.57%

0.61%

0.24%

2.28%

0.31%

1.00%

4.64%

0.65%

   Commercial and industrial-owner occupied

1.10%

1.28%

0.28%

0.57%

0.26%

0.00%

1.83%

0.00%

1.04%

     Total commercial and industrial

0.65%

0.88%

0.48%

0.39%

1.39%

0.19%

1.35%

3.04%

0.82%

Commercial real estate










   Agricultural

1.07%

0.87%

0.68%

1.40%

0.00%

0.00%

3.15%

0.00%

1.77%

   Construction, acquisition and development

0.09%

0.33%

3.09%

0.07%

0.00%

0.30%

0.76%

N/A

0.63%

   Commercial real estate

1.02%

0.01%

1.73%

0.13%

0.00%

0.04%

2.11%

N/A

1.04%

     Total commercial real estate

0.72%

0.18%

1.94%

0.20%

0.00%

0.12%

1.58%

0.00%

0.96%

Consumer










   Consumer mortgages

1.57%

1.21%

1.23%

1.64%

0.95%

1.89%

1.07%

2.87%

1.41%

   Home equity

0.35%

0.56%

0.50%

0.44%

1.42%

0.84%

0.96%

N/A

0.59%

   Credit cards

N/A

N/A

N/A

N/A

N/A

N/A

N/A

0.95%

0.95%

     Total consumer

1.39%

1.13%

1.09%

1.38%

1.01%

1.58%

1.07%

1.79%

1.28%

All other

0.32%

0.00%

0.15%

0.08%

0.00%

0.08%

0.31%

0.04%

0.17%

     Total loans

0.94%

0.68%

1.06%

0.62%

0.61%

0.75%

1.37%

1.74%

0.98%

 

BancorpSouth Bank

Noninterest Revenue and Expense

(Dollars in thousands)

(Unaudited)
















Quarter Ended


Year to Date


Sep-20


Jun-20


Mar-20


Dec-19


Sep-19


Sep-20


Sep-19

NONINTEREST REVENUE:














Mortgage banking excl. MSR and MSR Hedge market value adj

$    26,667


$       31,930


$       20,553


$      6,938


$       11,283


$  79,150


$  27,359

MSR and MSR Hedge market value adjustment

430


(2,373)


(11,083)


3,164


(3,994)


(13,026)


(17,679)

Credit card, debit card and merchant fees

9,938


9,080


9,176


9,836


9,778


28,194


28,820

Deposit service charges

8,892


7,647


11,682


12,193


11,939


28,221


33,822

Securities gains (losses), net

18


62


(85)


(41)


117


(5)


215

Insurance commissions

32,750


33,118


29,603


27,648


31,512


95,471


95,643

Trust income

3,902


4,064


4,013


3,951


4,488


11,979


12,091

Annuity fees

53


54


55


136


184


162


694

Brokerage commissions and fees

2,516


2,303


2,502


2,530


1,979


7,321


5,407

Bank-owned life insurance

1,902


1,855


1,999


3,427


2,529


5,756


6,205

Other miscellaneous income

2,856


3,518


8,081


4,915


5,617


14,455


13,407

     Total noninterest revenue

$    89,924


$       91,258


$       76,496


$    74,697


$       75,432


$ 257,678


$ 205,984















NONINTEREST EXPENSE:














Salaries and employee benefits

$  104,219


$      108,103


$      108,272


$    97,137


$      101,154


$ 320,594


$ 299,363

Occupancy, net of rental income

13,053


12,890


12,708


12,267


12,323


38,651


35,862

Equipment

4,519


4,762


4,649


4,725


4,676


13,930


12,987

Deposit insurance assessments

1,522


1,962


1,546


2,200


2,038


5,030


6,943

Advertising

826


918


1,099


1,153


1,382


2,843


3,756

Foreclosed property expense

(278)


1,306


924


855


870


1,952


2,013

Telecommunications

1,462


1,512


1,461


1,504


1,400


4,435


4,159

Public relations

1,130


459


680


880


1,069


2,269


2,768

Data processing

9,477


9,693


9,646


10,041


9,066


28,816


25,476

Computer software

4,779


4,979


4,315


4,478


3,825


14,073


11,359

Amortization of intangibles

2,357


2,355


2,394


2,508


2,117


7,106


6,610

Legal

(316)


1,375


898


854


786


1,957


2,701

Merger expense

129


510


4,494


5,782


4,062


5,133


8,089

Postage and shipping

1,199


1,198


1,441


1,353


1,281


3,838


3,910

Other miscellaneous expense

11,427


10,482


13,479


16,614


13,565


35,388


41,260

     Total noninterest expense

$  155,505


$      162,504


$      168,006


$  162,351


$      159,614


$ 486,015


$ 467,256















INSURANCE COMMISSIONS:














Property and casualty commissions

$    24,060


$       23,644


$       21,246


$    19,994


$       22,643


$  68,950


$  67,310

Life and health commissions

6,072


6,771


6,175


5,979


6,116


19,018


19,453

Risk management income

609


540


532


667


564


1,681


1,773

Other

2,009


2,163


1,650


1,008


2,189


5,822


7,107

     Total insurance commissions

$    32,750


$       33,118


$       29,603


$    27,648


$       31,512


$  95,471


$  95,643

 

BancorpSouth Bank

Selected Additional Information

(Dollars in thousands)

(Unaudited)








Quarter Ended


Sep-20

Jun-20

Mar-20

Dec-19

Sep-19

MORTGAGE SERVICING RIGHTS:






Fair value, beginning of period

$      40,821

$       42,243

$       57,109

$      51,492

$       55,294

Additions to mortgage servicing rights:






   Originations of servicing assets

7,041

4,297

3,079

4,025

3,410

Changes in fair value:






   Due to payoffs/paydowns

(3,198)

(3,144)

(2,506)

(2,323)

(2,542)

   Due to change in valuation inputs or






     assumptions used in the valuation model

280

(2,575)

(15,438)

3,915

(4,669)

   Other changes in fair value

-

-

(1)

-

(1)

Fair value, end of period

$      44,944

$       40,821

$       42,243

$      57,109

$       51,492







MORTGAGE BANKING REVENUE:






Production revenue:






   Origination

$      23,632

$       30,194

$       17,906

$       4,326

$         8,922

   Servicing

6,233

4,880

5,153

4,935

4,903

   Payoffs/Paydowns

(3,198)

(3,144)

(2,506)

(2,323)

(2,542)

     Total production revenue

26,667

31,930

20,553

6,938

11,283

Market value adjustment on MSR

280

(2,575)

(15,438)

3,915

(4,669)

Market value adjustment on MSR Hedge

150

202

4,355

(751)

675

Total mortgage banking revenue

$      27,097

$       29,557

$         9,470

$      10,102

$         7,289



















Mortgage loans serviced

$ 7,218,090

$   7,000,425

$   6,999,383

$ 6,898,195

$   6,799,186

MSR/mtg loans serviced

0.62%

0.58%

0.60%

0.83%

0.76%







AVAILABLE-FOR-SALE SECURITIES, at fair value






U.S. Government agencies

$ 3,116,458

$   3,348,206

$   3,532,905

$ 3,599,317

$   2,323,159

U.S. Government agency issued residential






   mortgage-back securities

1,625,325

699,864

132,902

133,375

128,677

U.S. Government agency issued commercial






   mortgage-back securities

758,116

759,980

595,885

609,009

115,228

Obligations of states and political subdivisions

141,896

163,121

206,648

140,273

199,382

Corporate bonds

17,990

2,000

-

-

-

Total available-for-sale securities

$ 5,659,785

$   4,973,171

$   4,468,340

$ 4,481,974

$   2,766,446







 

BancorpSouth Bank

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 available to common shareholders, net operating income-excluding MSR, net operating income available to common shareholders-excluding MSR, pre-tax pre-provision net revenue, total operating expense, tangible shareholders' equity to tangible assets, tangible shareholders' equity to tangible assets-excluding PPP loans, tangible common shareholders' equity to tangible assets, tangible common shareholders' equity to tangible assets-excluding PPP loans, return on tangible equity, return on tangible common equity, operating return on tangible equity-excluding MSR, operating return on tangible common equity-excluding MSR,  operating return on average assets-excluding MSR, operating return on average shareholders' equity-excluding MSR, operating return on average common shareholders' equity-excluding MSR, pre-tax pre-provision net revenue to total average assets, tangible book value per common share, operating earnings per common share, operating earnings per common 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, Net Operating Income Available to Common Shareholders, Net Operating Income-Excluding MSR, and Net Operating Income Available to Common Shareholders-excluding MSR to Net Income:





Quarter ended


Year to Date




9/30/2020


6/30/2020


3/31/2020


12/31/2019


9/30/2019


9/30/2020


9/30/2019

















Net income


$      73,825


$      61,160


$       24,261


$          65,849


$          63,757


$         159,246


$       168,412

Plus:

Merger expense, net of tax


97


383


3,372


4,339


3,049


3,852


6,072


Initial provision for acquired loans,
















  net of tax


-


-


751


-


-


751



Less:

Security gains(losses), net of tax


13


47


(64)


(30)


88


(4)


162

Net operating income


$      73,909


$      61,496


$       28,448


$          70,218


$          66,718


$         163,853


$       174,322

Less:

Preferred dividends


2,372


2,372


2,372


-


-


7,116


-

Net operating income available to















common shareholders


$      71,537


$      59,124


$       26,076


$          70,218


$          66,718


$         156,737


$       174,322

































Net operating income


$      73,909


$      61,496


$       28,448


$          70,218


$          66,718


$         163,853


$       174,322

Less:

MSR market value adjustment, net of tax

323


(1,781)


(8,318)


2,374


(2,998)


(9,776)


(13,268)

Net operating income-excluding MSR


$      73,586


$      63,277


$       36,766


$          67,844


$          69,716


$         173,629


$       187,590

Less:

Preferred dividends


2,372


2,372


2,372


-


-


7,116


-

Net operating income available to common















shareholders-excluding MSR


$      71,214


$      60,905


$       34,394


$          67,844


$          69,716


$         166,513


$       187,590

































Reconciliation of Net Income to Pre-Tax Pre-Provision Net Revenue



























Net income


$      73,825


$      61,160


$       24,261


$          65,849


$          63,757


$         159,246


$       168,412

Plus:

Provision for credit losses


15,000


20,000


46,000


-


500


81,000


1,500


Merger expense


129


510


4,494


5,782


4,062


5,133


8,089


Income tax expense


21,525


18,164


5,759


17,271


18,160


45,448


47,986

Less:

Security gains(losses)


18


62


(85)


(41)


117


(5)


215


MSR market value adjustment


430


(2,373)


(11,083)


3,164


(3,994)


(13,026)


(17,679)

Pre-tax pre-provision net revenue


$    110,031


$    102,145


$       91,682


$          85,779


$          90,356


$         303,858


$       243,451

































Reconciliation of Total Operating Expense to Total Noninterest Expense:



























Total noninterest expense


$    155,505


$    162,504


$     168,006


$         162,351


$         159,614


$         486,015


$       467,256

Less:

Merger expense


129


510


4,494


5,782


4,062


5,133


8,089

Total operating expense


$    155,376


$    161,994


$     163,512


$         156,569


$         155,552


$         480,882


$       459,167

















 

BancorpSouth Bank

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




9/30/2020


6/30/2020


3/31/2020


12/31/2019


9/30/2019


9/30/2020


9/30/2019

Tangible assets















Total assets


$ 23,555,422


$  23,236,176


$  21,032,524


$ 21,052,576


$  19,850,225


$ 23,555,422


$ 19,850,225

Less:  

Goodwill


847,531


847,984


848,242


825,679


822,093


847,531


822,093


Other identifiable intangible assets


54,757


56,989


59,345


60,008


61,100


54,757


61,100

Total tangible assets


$ 22,653,134


$  22,331,203


$  20,124,937


$ 20,166,889


$  18,967,032


$ 22,653,134


$ 18,967,032

Less:  

PPP loans


1,212,246


1,192,715


-


-


-


1,212,246


-

Total tangible assets-excluding PPP loans


$ 21,440,888


$  21,138,488


$  20,124,937


$ 20,166,889


$  18,967,032


$ 21,440,888


$ 18,967,032

















PERIOD END BALANCES:















Tangible shareholders' equity















Total shareholders' equity


$   2,782,539


$    2,732,687


$    2,681,904


$   2,685,017


$    2,489,427


$   2,782,539


$   2,489,427

Less:

Goodwill


847,531


847,984


848,242


825,679


822,093


847,531


822,093


Other identifiable intangible assets


54,757


56,989


59,345


60,008


61,100


54,757


61,100

Total tangible shareholders' equity


$   1,880,251


$    1,827,714


$    1,774,317


$   1,799,330


$    1,606,234


$   1,880,251


$   1,606,234

Less:

Preferred stock


166,993


166,993


166,993


167,021


-


166,993


-

Total tangible common shareholders' equity


$   1,713,258


$    1,660,721


$    1,607,324


$   1,632,309


$    1,606,234


$   1,713,258


$   1,606,234

















AVERAGE BALANCES:















Tangible shareholders' equity















Total shareholders' equity


$   2,729,870


$    2,738,434


$    2,658,699


$   2,572,750


$    2,378,882


$   2,709,077


$   2,297,322

Less:

Goodwill


847,744


848,160


844,635


823,812


761,084


846,850


731,043


Other identifiable intangible assets


56,045


58,280


58,805


60,559


59,253


57,704


52,842

Total tangible shareholders' equity


$   1,826,081


$    1,831,994


$    1,755,259


$   1,688,379


$    1,558,545


$   1,804,523


$   1,513,437

Less:

Preferred stock


166,993


166,993


167,021


74,717


-


167,002


-

Total tangible common shareholders' equity


$   1,659,088


$    1,665,001


$    1,588,238


$   1,613,662


$    1,558,545


$   1,637,521


$   1,513,437

















Total average assets


$ 23,318,877


$  22,707,686


$  21,189,637


$ 20,243,023


$  19,170,926


$ 22,408,734


$ 18,618,066

Total shares of common stock outstanding


102,558,459


102,566,301


102,632,484


104,522,804


104,775,876


102,558,459


104,775,876

Average shares outstanding-diluted


102,839,749


102,827,225


104,733,897


105,144,032


101,493,247


103,466,957


100,699,510

















Tangible shareholders' equity to tangible assets (1)


8.30%


8.18%


8.82%


8.92%


8.47%


8.30%


8.47%

Tangible shareholders' equity to tangible assets-excluding PPP loans (2)


8.77%


8.65%


8.82%


8.92%


8.47%


8.77%


8.47%

Tangible common shareholders' equity to tangible assets (3)


7.56%


7.44%


7.99%


8.09%


8.47%


7.56%


8.47%

Tangible common shareholders' equity to tangible assets-excluding PPP loans (4)

7.99%


7.86%


7.99%


8.09%


8.47%


7.99%


8.47%

Return on average tangible equity (5)


16.08%


13.43%


5.56%


15.47%


16.23%


11.79%


14.88%

Return on average tangible common equity (6)


17.13%


14.20%


5.54%


16.19%


16.23%


12.41%


14.88%

Operating return on average tangible equity-excluding MSR (7)


16.03%


13.89%


8.42%


15.94%


17.75%


12.85%


16.57%

Operating return on average tangible common equity-excluding MSR (8)


17.08%


14.71%


8.71%


16.68%


17.75%


13.58%


16.57%

Operating return on average assets-excluding MSR (9)


1.26%


1.12%


0.70%


1.33%


1.44%


1.03%


1.35%

Operating return on average shareholders' equity-excluding MSR (10)


10.72%


9.29%


5.56%


10.46%


11.63%


8.56%


10.92%

Operating return on average common shareholders' equity-excluding MSR (11)

11.05%


9.53%


5.55%


10.78%


11.63%


8.75%


10.92%

Pre-tax pre-provision net revenue to total average assets (12)


1.88%


1.81%


1.74%


1.68%


1.87%


1.81%


1.75%

Tangible book value per common share (13)


$         16.71


$          16.19


$          15.66


$         15.62


$         15.33


$         16.71


$         15.33

Operating earnings per common share (14)


$           0.70


$            0.57


$            0.25


$           0.67


$           0.66


$           1.51


$           1.73

Operating earnings per common share-excluding MSR (15)


$           0.69


$            0.59


$            0.33


$           0.65


$           0.69


$           1.61


$           1.86

















(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)

Tangible shareholders' equity to tangible assets-excluding PPP loans 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, other identifiable intangible assets, and PPP loans.

(3)

Tangible common shareholders' equity to tangible assets is defined by the Company as total shareholders' equity less preferred stock, goodwill and other identifiable intangible assets, divided by the difference of total assets less goodwill and other identifiable intangible assets.

(4)

Tangible common shareholders' equity to tangible assets-excluding PPP loans is defined by the Company as total shareholders' equity less preferred stock, goodwill and other identifiable intangible assets, divided by the difference of total assets less goodwill, other identifiable intangible assets, and PPP loans.

(5)

Return on average tangible equity is defined by the Company as annualized net income divided by average tangible shareholders' equity.

(6)

Return on average tangible common equity is defined by the Company as annualized net income available to common shareholders divided by average tangible common shareholders' equity.

(7)

Operating return on average tangible equity-excluding MSR is defined by the Company as annualized net operating income-excluding MSR divided by average tangible shareholders' equity.

(8)

Operating return on average tangible common equity-excluding MSR is defined by the Company as annualized net operating income available to common shareholders-excluding MSR divided by average tangible common shareholders' equity.

(9)

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

(10)

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.

(11)

Operating return on average common shareholders' equity-excluding MSR is defined by the Company as annualized net operating income available to common shareholders-excluding MSR divided by average common shareholders' equity.

(12)

Pre-tax pre-provision net revenue to total average assets is defined by the Company as annualized pre-tax pre-provision net revenue divided by total average assets adjusted for other non-operating items included in the definition and calculation of net operating income-excluding MSR.

(13)

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

(14)

Operating earnings per common share is defined by the Company as net operating income available to common shareholders divided by average common shares outstanding-diluted.

(15)

Operating earnings per common share-excluding MSR is defined by the Company as net operating income available to common shareholders-excluding MSR divided by average common 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.

 

Cision View original content:http://www.prnewswire.com/news-releases/bancorpsouth-announces-third-quarter-2020-financial-results-301155052.html

SOURCE BancorpSouth Bank

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