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21.07.2021 22:30:00

BancorpSouth Announces Second Quarter 2021 Results

TUPELO, Miss., July 21, 2021 /PRNewswire/ -- BancorpSouth Bank (NYSE: BXS) (the "Company") today announced financial results for the quarter ended June 30, 2021.

Highlights for the second quarter of 2021 included:

  • Achieved quarterly net income available to common shareholders of $73.2 million, or $0.69 per diluted common share, and record net operating income available to common shareholders – excluding MSR – of $90.6 million, or $0.86 per diluted common share.
  • Generated $119.9 million in pre-tax pre-provision net revenue (PPNR), or 1.80 percent of average assets on an annualized basis.
  • Credit quality indicators continued to improve as evidenced by a decline of $8.9 million, or 8.1 percent, in total non-performing assets; provision for credit losses of $11.5 million driven primarily by day one accounting provision requirements associated with loans acquired during the quarter.
  • Generated organic total deposit and customer repo growth of $224.4 million for the quarter, or 4.1 percent on an annualized basis, and total organic net loan growth of approximately $65.0 million.
  • Sold 12,289 Paycheck Protection Program (PPP) loans totaling $725.4 million, which generated a gain on sale of $21.6 million; received PPP forgiveness payments totaling $347.1 million during the quarter.
  • Maintained strong regulatory capital metrics; estimated total risk-based capital of 14.57 percent at June 30, 2021 compared to 14.65 percent at March 31, 2021.
  • Completed transactions with National United Bancshares, Inc., the parent company of National United, and FNS Bancshares, Inc., the parent company of FNB Bank, effective May 1, 2021, which add approximately $1.6 billion in total assets to the Company.
  • Announced the signing of a merger agreement with Cadence Bancorporation, the parent company of Cadence Bank N.A., which creates a $46 billion institution on a pro forma basis that will be the 5th largest bank headquartered in the Company's nine-state footprint.

"While we aren't immune to the balance sheet and margin dynamics impacting the industry, we continue to report strong financial results," remarked Dan Rollins, Chairman and Chief Executive Officer.  "Second quarter was another record quarter from an operating earnings standpoint.    Consistent with the last several quarters, we reported meaningful organic deposit growth, improvement in our credit quality indicators, and a stable core expense base.  We generated net organic loan growth for the first time since the second quarter of 2019.  In addition, our insurance brokerage team had a great quarter from a revenue growth perspective."

"As we look at other highlights for the quarter, we sold $725.4 million in PPP loans, which resulted in a gain on sale of $21.6 million.  In addition we received forgiveness payments totaling $347.1 million which, combined with the loan sale, resulted in less than $170 million in PPP loans remaining on the balance sheet at quarter end.  This will allow our frontline team to return to critical sales and customer service activities including prospecting and building customer relationships.  We are also pleased to have completed both the closing and operational integration of our transactions with National United Bancshares, Inc. and FNS Bancshares, Inc.  These teams have made a seamless transition to our Company and will be an integral part of our growth efforts going forward."

Earnings Summary

The Company reported net income available to common shareholders of $73.2 million, or $0.69 per diluted common share, for the second quarter of 2021, compared with net income available to common shareholders of $58.8 million, or $0.57 per diluted common share, for the second quarter of 2020 and net income available to common shareholders of $79.2 million, or $0.77 per diluted common share, for the first quarter of 2021.  The Company reported net operating income available to common shareholders – excluding MSR – of $90.6 million, or $0.86 per diluted common share, for the second quarter of 2021, compared with $60.9 million, or $0.59 per diluted common share, for the second quarter of 2020 and $74.8 million, or $0.73 per diluted common share, for the first quarter of 2021.

The Company reported PPNR of $119.9 million, or 1.80 percent of average assets on an annualized basis, for the second quarter of 2021 compared to $102.1 million, or 1.81 percent of average assets on an annualized basis, for the second quarter of 2020 and $99.1 million, or 1.64 percent of average assets on an annualized basis, for the first quarter of 2021.

Net Interest Revenue

Net interest revenue was $180.2 million for the second quarter of 2021, an increase of 5.6 percent from $170.6 million for the second quarter of 2020 and an increase of 4.3 percent from $172.8 million for the first quarter of 2021.  The fully taxable equivalent net interest margin was 2.99 percent for the second quarter of 2021, compared with 3.35 percent for the second quarter of 2020 and 3.15 percent for the first quarter of 2021.  Yields on net loans and leases were 4.43 percent for the second quarter of 2021, compared with 4.59 percent for the second quarter of 2020 and 4.53 percent for the first quarter of 2021, while yields on total interest earning assets were 3.31 percent for the second quarter of 2021, compared with 3.87 percent for the second quarter of 2020 and 3.51 percent for the first quarter of 2021.  The net interest margin, excluding accretable yield, was 2.94 percent for the second quarter of 2021, compared with 3.30 percent for the second quarter of 2020 and 3.08 percent for the first quarter of 2021, while yields on net loans and leases, excluding accretable yield, were 4.35 percent for the second quarter of 2021, compared with 4.53 percent for the second quarter of 2020 and 4.43 percent for the first quarter of 2021. 

PPP loans had an adverse impact of approximately four basis points on the yield on net loans and leases, excluding accretable yield, for the second quarter of 2021.  Net interest income for the second quarter of 2021 included approximately $3.7 million of accelerated PPP fee income recognition resulting from the payoff of loans that were forgiven by the SBA during the quarter.  The average cost of deposits was 0.27 percent for the second quarter of 2021, compared with 0.50 percent for the second quarter of 2020 and 0.33 percent for the first quarter of 2021.

Balance Sheet Activity

Loans and leases, net of unearned income, decreased $34.8 million during the second quarter of 2021 while deposits and customer repos increased $1.7 billion.  The Company completed a sale of $725.4 million in PPP loans during the second quarter, which resulted in a gain on sale of $21.6 million.  In addition, forgiveness payments were received during the quarter totaling $347.1 million.  The Company also completed acquisitions with National United Bancshares, Inc., the parent company of National United, and FNS Bancshares, Inc., the parent company of FNB Bank, during the second quarter which collectively added $877.9 million in loans, net of day one accounting adjustments, and $1.5 billion in deposits and customer repos. Excluding the impact of acquisitions and PPP activity, total loans increased approximately $65.0 million compared to March 31, 2021, while deposits and customer repos increased approximately $225.0 million, or 4.1 percent on an annualized basis.

Provision for Credit Losses and Allowance for Credit Losses

Earnings for the second quarter of 2021 reflect a provision for credit losses of $11.5 million, compared with a provision of $20.0 million for the second quarter of 2020 and no provision for credit losses for the first quarter of 2021.  The $11.5 million provision for the second quarter was primarily associated with the day one accounting provision requirements for loans acquired during the quarter.  Net recoveries for the second quarter of 2021 were $1.8 million, or 0.05 percent of net loans and leases on an annualized basis, compared with net charge-offs of $1.2 million for the second quarter of 2020 and net charge-offs of $3.3 million for the first quarter of 2021.  The allowance for credit losses was $265.7 million, or 1.77 percent of net loans and leases, at June 30, 2021, compared with $237.0 million, or 1.54 percent of net loans and leases, at June 30, 2020, and $241.1 million, or 1.60 percent of net loans and leases, at March 31, 2021.   The allowance for credit losses coverage, excluding the impact of PPP loans, was 1.79 percent of net loans and leases at June 30, 2021, compared with 1.67 percent at June 30, 2020 and 1.74 percent at March 31, 2021.  

Total non-performing assets were $101.8 million, or 0.37 percent of total assets, at June 30, 2021, compared with $155.4 million, or 0.67 percent of total assets, at June 30, 2020, and $110.7 million, or 0.43 percent of total assets, at March 31, 2021.  Other real estate owned was $17.3 million at June 30, 2021, compared with $7.2 million at June 30, 2020 and $9.4 million at March 31, 2021.

Noninterest Revenue

Noninterest revenue was $101.9 million for the second quarter of 2021, compared with $91.3 million for the second quarter of 2020 and $87.9 million for the first quarter of 2021.  These results include a negative mortgage servicing rights (MSR) valuation adjustment of $1.9 million for the second quarter of 2021, compared with a negative MSR valuation adjustment of $2.4 million for the second quarter of 2020 and a positive MSR valuation adjustment of $7.4 million for the first quarter of 2021.  Valuation adjustments in the MSR asset are driven primarily by fluctuations in interest rates period over period.  

Mortgage production and servicing revenue was $11.0 million for the second quarter of 2021, compared with $31.9 million for the second quarter of 2020 and $17.9 million for the first quarter of 2021.  Mortgage origination volume for the second quarter of 2021 was $906.4 million, compared with $989.0 million for the second quarter of 2020 and $789.8 million for the first quarter of 2021.  Home purchase money volume was $615.2 million for the second quarter of 2021, compared with $522.6 million for the second quarter of 2020 and $379.4 million for the first quarter of 2021.  Of the total mortgage origination volume for the second quarter of 2021, $344.1 million was portfolio loans, compared with $251.7 million for the second quarter of 2020 and $149.0 million for the first quarter of 2021.

Credit card, debit card, and merchant fee revenue was $11.6 million for the second quarter of 2021, compared with $9.1 million for the second quarter of 2020 and $9.7 million for the first quarter of 2021.  Deposit service charge revenue was $8.8 million for the second quarter of 2021, compared with $7.6 million for the second quarter of 2020 and $8.5 million for the first quarter of 2021.  Wealth management revenue was $7.5 million for the second quarter of 2021, compared with $6.4 million for the second quarter of 2020 and $8.5 million for the first quarter of 2021.  Insurance commission revenue was $36.1 million for the second quarter of 2021, compared with $33.1 million for the second quarter of 2020 and $30.7 million for the first quarter of 2021.  Other noninterest revenue was $7.1 million for the second quarter of 2021, compared with $5.4 million for the second quarter of 2020 and $5.3 million for the first quarter of 2021.  Additionally, second quarter 2021 results included a $21.6 million gain on the sale of PPP loans. 

Noninterest Expense

Noninterest expense for the second quarter of 2021 was $174.0 million, compared with $162.5 million for the second quarter of 2020 and $155.8 million for the first quarter of 2021.  Salaries and employee benefits expense was $108.2 million for the second quarter of 2021, compared with $108.1 million for the second quarter of 2020 and $101.1 million for the first quarter of 2021.  Occupancy expense was $13.2 million for the second quarter of 2021, compared with $12.9 million for the second quarter of 2020 and $12.8 million for the first quarter of 2021.  Other noninterest expense was $46.0 million for the second quarter of 2021, compared with $34.8 million for the second quarter of 2020 and $35.9 million for the first quarter of 2021.  Additionally, merger-related expense for the second quarter of 2021 was $10.0 million, compared with merger-related expense of $0.5 million for the second quarter of 2020 and $1.6 million for the first quarter of 2021.  Salaries and benefits expense for the first quarter of 2021 benefited from an accrual true-up totaling approximately $3.0 million related to the Company's equity compensation plans. 

Capital Management

The Company's ratio of shareholders' equity to assets was 11.12 percent at June 30, 2021, compared with 11.76 percent at June 30, 2020 and 10.95 percent at March 31, 2021.  The ratio of tangible common shareholders' equity to tangible assets was 7.11 percent at June 30, 2021, compared with 7.44 percent at June 30, 2020 and 7.04 percent at March 31, 2021. 

During the second quarter of 2021, the Company did not repurchase any shares of its common stock pursuant to its share repurchase program.  The Company has 6.0 million shares remaining on its current share repurchase authorization which will expire on December 31, 2021. 

Estimated regulatory capital ratios at June 30, 2021 were calculated in accordance with the Basel III capital framework as well as the interagency final rule published on September 30, 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 June 30, 2021, with Tier 1 risk-based capital of 11.85 percent and total risk-based capital of 14.57 percent, compared with required minimum levels of 8 percent and 10 percent, respectively, in order to qualify for "well capitalized" classification. 

Summary

Rollins concluded, "Despite the current industry headwinds, our board and management team are excited about the pathway ahead for our Company.  We are in a strong position from a credit quality and capital perspective.  Our noninterest product lines, including mortgage and insurance, are performing quite well in this environment.  While we continue to exercise caution, our relationship managers are pleased to be back out in person calling on customers and prospects.    Finally, we continue to work diligently toward the completion of our merger with Cadence.  Our operational and back office teams are making progress daily on our conversion and integration planning and we remain optimistic that we are on track for a fourth quarter 2021 transaction closing."

TRANSACTIONS

Cadence Bancorporation (NYSE: CADE)

On April 12, 2021, the Company announced the signing of a definitive merger agreement (the Cadence Merger Agreement) with Cadence Bancorporation, the parent company of Cadence Bank N.A., (collectively referred to as Cadence), pursuant to which Cadence will be merged with and into the Company (the Cadence Merger).  Cadence operates 98 full-service banking offices in the southeast.  As of March 31, 2021, Cadence collectively reported total assets of $18.8 billion, total loans of $12.4 billion and total deposits of $16.1 billion.  Under the terms of the Cadence Merger Agreement, each Cadence shareholder will receive 0.70 shares of the Company's common stock.  In addition, Cadence will pay a one-time special dividend of $1.25 per share at closing.  For more information regarding the Cadence Merger, see our Current Report on Form 8-K that was filed with the Federal Deposit Insurance Corporation (FDIC) on April 12, 2021.  The Cadence Merger Agreement has been unanimously approved by the Boards of Directors of the Company and Cadence.  Subject to the satisfaction of all closing conditions, including the receipt of all required regulatory and shareholder approvals, the Cadence Merger is expected to be completed during the fourth quarter of 2021, although the Company can provide no assurance that the Cadence Merger will close during this time period or at all.

FNS Bancshares, Inc.

On May 1, 2021, the Company completed the merger with FNS Bancshares, Inc., the parent company of FNB Bank, (collectively referred to as FNS), pursuant to which FNS was merged with and into the Company.  FNS operated 17 full-service banking offices in Alabama, Georgia and Tennessee.  The merger expanded the Company's presence in Jackson, DeKalb and Marshall counties in Alabama and the Chattanooga, Tennessee-Georgia and Nashville-Davidson-Murfreesboro-Franklin, Tennessee metropolitan statistical areas.  As of May 1, 2021, FNS collectively reported total assets of $826.6 million, total loans of $464.7 million and total deposits of $720.7 million.  Under the terms of the definitive merger agreement, the Company issued approximately 2,975,000 shares of the Company's common stock plus $18.0 million in cash for all outstanding shares of FNS.  For more information regarding this transaction, see our Current Report on Form 8-K that was filed with the FDIC on May 3, 2021.  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.

National United Bancshares, Inc.

On May 1, 2021, the Company completed the merger with National United Bancshares, Inc., the parent company of National United, (collectively referred to as National United), pursuant to which National United was merged with and into the Company.  National United operated 6 full-service banking offices in the Killeen-Temple, Texas; Waco, Texas; and Austin-Round Rock-Georgetown, Texas metropolitan statistical areas.  As of May 1, 2021, National United collectively reported total assets of $817.3 million, total loans of $434.6 million and total deposits of $742.9 million.  Under the terms of the definitive merger agreement, the Company issued approximately 3,110,000 shares of the Company's common stock plus $33.25 million in cash for all outstanding shares of National United.  For more information regarding this transaction, see our Current Report on Form 8-K that was filed with the FDIC on May 3, 2021.  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 COVID-19 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 SBA Preferred Lender, the Company 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 negative pressure on its net interest margin and loan demand.  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 and the trading prices of its capital stock 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 second quarter 2021 financial results on July 22, 2021, 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 $28 billion in assets.  BancorpSouth operates approximately 315 full service branch locations as well as additional mortgage, insurance, and loan production offices in Alabama, Arkansas, Florida, Georgia, 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 and Instagram: @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 (the "Exchange Act"), and are subject to the safe harbor created thereby 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 "anticipate," "aspire," "assume," "believe," "budget," "contemplate," "continue," "could," "estimate," "expect," "forecast," "foresee," "goal," "hope," "indicate," "intend," "may," "might," "outlook," "plan," "project," "projection," "predict," "prospect," "potential," "roadmap," "seek," "should," "target," "will," and "would," or the negative versions of those words or other comparable words of a future or forward-looking nature. These forward-looking statements include, without limitation, discussions regarding general economic, interest rate, real estate market, competitive, employment, and credit market conditions, including the impact of the COVID-19 pandemic on the Company's business; the Company's: assets; business; cash flows; financial condition; liquidity; prospects; results of operations; deposit and customer repo growth; interest and fee-based revenue; capital resources; capital metrics; efficiency ratio; valuation of mortgage servicing rights; net income; net interest revenue; non-interest revenue; net interest margin; interest expense; non-interest expense; earnings per share; interest rate sensitivity; interest rate risk; balance sheet and liquidity management; off-balance sheet arrangements; fair value determinations; asset quality; credit quality; credit losses; provision and allowance for credit losses, impairments, charge-offs, recoveries and changes in loan volumes; investment securities portfolio yields and values; ability to manage the impact of pandemics, natural disasters and other force majeure events; adoption and use of critical accounting policies; adoption and implementation of new accounting standards and their effect on the Company's financial results and the Company's financial reporting; utilization of non-GAAP financial metrics; declaration and payment of dividends; ability to pay dividends or coupons on the Company's 5.5% Series A Non-Cumulative Perpetual Preferred Stock, par value $0.01 per share, or the 4.125% Fixed-to-Floating Rate Subordinated Notes due November 20, 2029; mortgage origination volume; mortgage servicing and production revenue; insurance commission revenue; implementation and execution of cost savings initiatives; ability to successfully litigate, resolve or otherwise dispense with threatened, pending, ongoing and future litigation and governmental, administrative and investigatory matters; ability to successfully complete pending or future acquisitions, dispositions and other strategic growth opportunities and initiatives; ability to successfully obtain regulatory approval for acquisitions and other growth initiatives; ability to successfully integrate and manage acquisitions; opportunities and efforts to grow market share; reputation; ability to compete with other financial institutions; ability to recruit and retain key employees and personnel; access to capital markets; availability of capital; investments in the securities of other financial institutions; and ability to operate the Company's regulatory compliance programs in accordance with applicable law.

Forward-looking statements are based upon management's expectations as well as certain assumptions and estimates made by, and information available to, the Company's management at the time such statements were made. Forward-looking statements are not historical facts, are not guarantees of future results or performance and are subject to certain known and unknown risks, uncertainties and other factors that are beyond the Company's control and that may cause actual results to differ materially from those expressed in, or implied by, such forward-looking statements. These risks, uncertainties and other factors include, without limitation, potential delays or other problems in implementing and executing the Company's growth, expansion and acquisition strategies, including delays in obtaining regulatory or other necessary approvals or the failure to realize any anticipated benefits or synergies from any acquisitions or growth strategies; the risks of changes in interest rates and their effects on the level and composition of deposits, loan demand and the values of loan collateral, securities and interest sensitive assets and liabilities; the failure of assumptions underlying the establishment of reserves for possible credit losses, fair value for loans and other real estate owned; changes in real estate values; the availability of and access to capital; possible downgrades in the Company's credit ratings or outlook which could increase the costs or availability of funding from capital markets; the ability to attract new or retain existing deposits or to retain or grow loans; the ability to grow additional interest and fee income or to control noninterest expense; the potential impact of the proposed phase-out of the London Interbank Offered Rate ("LIBOR") or other changes involving LIBOR; competitive factors and pricing pressures, including their effect on the Company's net interest margin; general economic, unemployment, credit market and real estate market conditions, and the effect of such conditions on the creditworthiness of borrowers, collateral values, the value of investment securities and asset recovery values; changes in legal, financial and/or regulatory requirements; recently enacted and potential legislation and regulatory actions and the costs and expenses to comply with new and/or existing legislation and regulatory actions, including those actions in response to the COVID-19 pandemic such as the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"), the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (the "Economic Aid Act") and any related rules and regulations; changes in U.S. Government monetary and fiscal policy; FDIC special assessments or changes to regular assessments; the enforcement efforts of federal and state bank regulators; possible adverse rulings, judgments, settlements and other outcomes of pending, ongoing and future litigation and governmental, administrative and investigatory matters (including litigation or actions arising from the Company's participation in and administration of programs related to the COVID-19 pandemic (including, among other things, the PPP loan programs authorized by the CARES Act and the Economic Aid Act); the ability to keep pace with technological changes, including changes regarding maintaining cybersecurity; the impact of failure in, or breach of, the Company's operational or security systems or infrastructure, or those of third parties with whom the Company does business, including as a result of cyber-attacks or an increase in the incidence or severity of fraud, illegal payments, security breaches or other illegal acts impacting the Company or the Company's customers; natural disasters or acts of war or terrorism; the adverse effects of the ongoing global COVID-19 pandemic, including the magnitude and duration of the pandemic, and the effect of actions taken to mitigate the impact of the COVID-19 pandemic on the Company, the Company's employees, the Company's customers, the global economy and the financial markets; international or political instability; impairment of the Company's goodwill or other intangible assets; losses of key employees and personnel; adoption of new accounting standards, including the effects from the adoption of the current expected credit loss methodology on January 1, 2020, or changes in existing standards; the occurrence of any event, change or other circumstances that could give rise to the right of one or both of the parties to terminate the Cadence Merger Agreement; the outcome of any legal proceedings that have been or may be instituted against the Company or Cadence in respect of the Cadence Merger; the possibility that the Cadence Merger will not close when expected or at all because required regulatory, shareholder or other approvals are not received or other conditions to the closing are not satisfied on a timely basis or at all, or are obtained subject to conditions that are not anticipated; the ability of the Company and Cadence to meet expectations regarding the timing, completion and accounting and tax treatments of the Cadence Merger; the risk that any announcements relating to the Cadence Merger could have adverse effects on the market price of the common stock of either or both parties to the Cadence Merger; the possibility that the anticipated benefits of the Cadence Merger will not be realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors in the areas where the Company and Cadence do business; certain restrictions during the pendency of the Cadence Merger that may impact the parties' ability to pursue certain business opportunities or strategic transactions; the possibility that the Cadence Merger may be more expensive to complete than anticipated, including as a result of unexpected factors or events; diversion of management's attention from ongoing business operations and opportunities; the possibility that the parties may be unable to achieve expected synergies and operating efficiencies in the Cadence Merger within the expected timeframes or at all and to successfully integrate Cadence's operations and those of the Company; such integration may be more difficult, time consuming or costly than expected; revenues following the Cadence Merger may be lower than expected; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the Cadence Merger; the Company and Cadence's success in executing their respective business plans and strategies and managing the risks involved in the foregoing; the dilution caused by the Company's issuance of additional shares of its capital stock in connection with the Cadence Merger and other factors as detailed from time to time in the Company's press and news releases, periodic and current reports and other filings the Company files 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 the Company's periodic and current reports filed with the FDIC, including those factors included in the Company's Annual Report on Form 10-K for the year ended December 31, 2020 under the heading "Item 1A. Risk Factors," in the Company's Quarterly Reports on Form 10-Q under the heading "Part II-Item 1A. Risk Factors" and in the Company's 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, 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 prove to be materially different from the results expressed or implied by the forward-looking statements. Accordingly, undue reliance should not be placed on any forward-looking statements. The forward-looking statements speak 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 applicable 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.  All written or oral forward-looking statements attributable to the Company are expressly qualified in their entirety by this section.

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


6/30/2021

3/31/2021

12/31/2020

9/30/2020

6/30/2020

6/30/2021

6/30/2020

Earnings Summary:








Interest revenue

$                    199,129

$                    192,783

$                    199,287

$                    200,670

$                    197,472

$            391,912

$            399,536

Interest expense

18,947

19,994

22,351

24,739

26,902

38,941

61,436

Net interest revenue

180,182

172,789

176,936

175,931

170,570

352,971

338,100

Provision for credit losses

11,500

-

5,794

16,000

20,000

11,500

67,250

Net interest revenue, after provision








   for credit losses

168,682

172,789

171,142

159,931

150,570

341,471

270,850

Noninterest revenue

101,943

87,936

78,826

89,924

91,258

189,879

167,754

Noninterest expense

173,984

155,823

167,117

154,505

162,504

329,807

329,260

Income before income taxes

96,641

104,902

82,851

95,350

79,324

201,543

109,344

Income tax expense

21,102

23,347

14,046

21,525

18,164

44,449

23,923

Net income

$                      75,539

$                      81,555

$                      68,805

$                      73,825

$                      61,160

$            157,094

$              85,421

Less: Preferred dividends

2,372

2,372

2,372

2,372

2,372

4,744

4,744

Net income available to common shareholders

$                      73,167

$                      79,183

$                      66,433

$                      71,453

$                      58,788

$            152,350

$              80,677









Balance Sheet - Period End Balances








Total assets

$               27,612,365

$               25,802,497

$               24,081,194

$               23,555,422

$               23,236,176

$       27,612,365

$       23,236,176

Total earning assets

25,129,873

23,542,657

21,792,725

21,340,371

21,119,073

25,129,873

21,119,073

Total securities

9,084,111

7,640,268

6,231,006

5,659,785

4,973,171

9,084,111

4,973,171

Loans and leases, net of unearned income

15,004,039

15,038,808

15,022,479

15,327,735

15,427,421

15,004,039

15,427,421

Allowance for credit losses

265,720

241,117

244,422

250,624

237,025

265,720

237,025

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

1,646,031

1,023,252

1,160,267

1,320,671

1,510,008

1,646,031

1,510,008

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

167,144

1,146,000

975,421

1,212,246

1,192,715

167,144

1,192,715

Remaining loan mark on acquired loans

13,037

10,069

13,886

16,198

19,977

13,037

19,977

Total deposits

22,838,486

21,173,186

19,846,441

19,412,979

19,179,486

22,838,486

19,179,486

Total deposits and securities sold under agreement to repurchase

23,521,621

21,833,671

20,484,156

20,024,434

19,849,502

23,521,621

19,849,502

Long-term debt

4,189

4,295

4,402

4,508

4,615

4,189

4,615

Junior subordinated debt securities

307,601

297,425

297,250

297,074

296,898

307,601

296,898

Total shareholders' equity

3,069,574

2,825,198

2,822,477

2,782,539

2,732,687

3,069,574

2,732,687

Common shareholders' equity

2,902,581

2,658,205

2,655,484

2,615,546

2,565,694

2,902,581

2,565,694









Balance Sheet - Average Balances








Total assets

$               26,666,296

$               24,545,560

$               23,660,503

$               23,318,877

$               22,707,686

$       25,611,786

$       21,948,661

Total earning assets

24,211,759

22,346,075

21,497,938

21,241,896

20,594,889

23,284,071

19,854,169

Total securities

8,067,109

6,606,027

5,820,425

5,309,982

4,437,614

7,340,604

4,449,456

Loans and leases, net of unearned income

15,470,539

15,029,076

15,219,402

15,369,684

15,114,732

15,251,027

14,670,759

PPP loans (included in loans and leases above)

973,036

1,062,423

1,139,959

1,207,097

975,029

1,017,483

487,515

Total deposits

22,385,883

20,472,080

19,600,863

19,258,930

18,454,472

21,434,268

17,679,851

Total deposits and securities sold under agreement to repurchase

23,092,969

21,123,774

20,272,881

19,940,330

19,098,599

22,113,811

18,272,768

Long-term debt

4,714

4,378

4,488

4,592

4,699

4,547

4,750

Junior subordinated debt securities

304,056

297,318

297,145

296,969

296,793

300,706

296,705

Total shareholders' equity

2,954,834

2,813,001

2,774,589

2,729,870

2,738,434

2,884,309

2,698,567

Common shareholders' equity

2,787,841

2,646,008

2,607,596

2,562,877

2,571,441

2,717,316

2,531,560









Nonperforming Assets:








Non-accrual loans and leases

$                      61,664

$                      73,142

$                      96,378

$                    122,108

$                    126,753

$              61,664

$            126,753

Loans and leases 90+ days past due, still accruing

15,386

21,208

14,320

17,641

9,877

15,386

9,877

Restructured loans and leases, still accruing

7,368

6,971

10,475

11,154

11,575

7,368

11,575

Non-performing loans (NPLs)

84,418

101,321

121,173

150,903

148,205

84,418

148,205

Other real estate owned

17,333

9,351

11,395

6,397

7,164

17,333

7,164

Non-performing assets (NPAs)

$                    101,751

$                    110,672

$                    132,568

$                    157,300

$                    155,369

$            101,751

$            155,369









Financial Ratios and Other Data:








Return on average assets

1.14%

1.35%

1.16%

1.26%

1.08%

1.24%

0.78%

Operating return on average assets-excluding MSR*

1.40%

1.28%

1.23%

1.26%

1.12%

1.34%

0.92%

Return on average shareholders' equity

10.25%

11.76%

9.87%

10.76%

8.98%

10.98%

6.37%

Operating return on average shareholders' equity-excluding MSR*

12.62%

11.13%

10.49%

10.72%

9.29%

11.90%

7.46%

Return on average common shareholders' equity

10.53%

12.14%

10.14%

11.09%

9.19%

11.31%

6.41%

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

13.04%

11.47%

10.80%

11.05%

9.53%

12.28%

7.57%

Return on average tangible equity*

15.21%

17.35%

14.66%

16.08%

13.43%

16.25%

9.58%

Operating return on average tangible equity-excluding MSR*

18.73%

16.42%

15.58%

16.03%

13.89%

17.61%

11.22%

Return on average tangible common equity*

16.08%

18.46%

15.54%

17.13%

14.20%

17.24%

9.97%

Operating return on average tangible common equity-excluding MSR*

19.92%

17.44%

16.56%

17.08%

14.71%

18.72%

11.78%

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

1.80%

1.64%

1.59%

1.89%

1.81%

1.72%

1.79%

Noninterest income to average assets

1.53%

1.45%

1.33%

1.53%

1.62%

1.50%

1.54%

Noninterest expense to average assets

2.62%

2.57%

2.81%

2.64%

2.88%

2.60%

3.02%

Net interest margin-fully taxable equivalent

2.99%

3.15%

3.29%

3.31%

3.35%

3.07%

3.44%

Net interest margin-fully taxable equivalent, excluding net accretion








  on acquired loans and leases

2.94%

3.08%

3.24%

3.23%

3.30%

3.01%

3.38%

Net interest rate spread

2.83%

2.97%

3.07%

3.06%

3.08%

2.90%

3.15%

Efficiency ratio (tax equivalent)*

61.55%

59.64%

65.16%

57.98%

61.89%

60.63%

64.91%

Operating efficiency ratio-excluding MSR (tax equivalent)*

57.66%

60.74%

62.87%

58.03%

61.16%

59.11%

62.26%

Loan/deposit ratio

65.70%

71.03%

75.69%

78.96%

80.44%

65.70%

80.44%

Price to earnings multiple (close)

10.08

12.07

12.88

9.18

11.15

10.08

11.15

Market value to common book value

106.01%

125.39%

105.98%

75.99%

90.91%

106.01%

90.91%

Market value to common book value (avg)

113.49%

119.10%

97.56%

83.75%

84.79%

114.43%

95.14%

Market value to common tangible book value

162.77%

190.14%

161.00%

116.01%

140.44%

162.77%

140.44%

Market value to common tangible book value (avg)

174.26%

180.60%

148.21%

127.86%

130.99%

175.70%

146.99%

Employee FTE

4,835

4,546

4,596

4,691

4,742

4,835

4,742









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






 







BancorpSouth Bank

Consolidated Balance Sheets

(Unaudited)








Jun-21

Mar-21

Dec-20

Sep-20

Jun-20


(Dollars in thousands)

Assets






Cash and due from banks

$                331,873

$                263,289

$                284,095

$                306,164

$                240,354

Interest bearing deposits with other banks






and Federal funds sold

629,390

336,253

133,273

39,782

318,615

Available-for-sale securities, at fair value

9,084,111

7,640,268

6,231,006

5,659,785

4,973,171

Loans and leases*

15,023,228

15,056,559

15,039,239

15,344,006

15,444,794

  Less:  Unearned income

19,189

17,751

16,760

16,271

17,373

             Allowance for credit losses

265,720

241,117

244,422

250,624

237,025

Net loans and leases

14,738,319

14,797,691

14,778,057

15,077,111

15,190,396

Loans held for sale

403,046

518,352

397,076

304,215

391,051

Premises and equipment, net

533,276

508,508

508,147

508,149

504,748

Accrued interest receivable

98,575

106,355

106,318

110,185

101,321

Goodwill

957,474

851,612

851,612

847,531

847,984

Other identifiable intangibles

54,659

53,581

55,899

54,757

56,989

Bank owned life insurance

355,660

335,707

333,264

331,799

329,167

Other real estate owned

17,333

9,351

11,395

6,397

7,164

Other assets

408,649

381,530

391,052

309,547

275,216

Total Assets

$           27,612,365

$           25,802,497

$           24,081,194

$           23,555,422

$           23,236,176

Liabilities






Deposits:






  Demand:  Noninterest bearing

$             7,619,308

$             6,990,880

$             6,341,457

$             6,336,792

$             6,385,370

                  Interest bearing

9,671,662

9,067,373

8,524,010

8,170,402

7,907,637

  Savings

2,939,958

2,678,276

2,452,059

2,325,980

2,234,853

  Other time

2,607,558

2,436,657

2,528,915

2,579,805

2,651,626

Total deposits

22,838,486

21,173,186

19,846,441

19,412,979

19,179,486

Securities sold under agreement to repurchase

683,135

660,485

637,715

611,455

670,016

Federal funds purchased






   and other short-term borrowing

-

-

-

95,217

220

Accrued interest payable

8,718

11,879

10,885

15,286

13,476

Junior subordinated debt securities

307,601

297,425

297,250

297,074

296,898

Long-term debt

4,189

4,295

4,402

4,508

4,615

Other liabilities

700,662

830,029

462,024

336,364

338,778

Total Liabilities

24,542,791

22,977,299

21,258,717

20,772,883

20,503,489

Shareholders' Equity






Preferred stock

166,993

166,993

166,993

166,993

166,993

Common stock

271,536

256,562

256,404

256,396

256,416

Capital surplus

730,294

563,481

565,187

565,635

561,541

Accumulated other comprehensive (loss) income

(34,575)

(43,459)

11,923

18,490

25,191

Retained earnings

1,935,326

1,881,621

1,821,970

1,775,025

1,722,546

Total Shareholders' Equity

3,069,574

2,825,198

2,822,477

2,782,539

2,732,687

Total Liabilities & Shareholders' Equity

$           27,612,365

$           25,802,497

$           24,081,194

$           23,555,422

$           23,236,176













*Includes $167.1 million, $1.146 billion, $975.4 million, $1.212 billion and $1.193 billion in PPP loans at June 30, 2021, March 31, 2021, December 31, 2020, September 30, 2020 and  June 30, 2020, respectively.

 







BancorpSouth Bank

Consolidated Average Balance Sheets

(Unaudited)








Jun-21

Mar-21

Dec-20

Sep-20

Jun-20


(Dollars in thousands)

Assets






Cash and due from banks

$                365,647

$                261,519

$                247,799

$                232,421

$                229,334

Interest bearing deposits with other banks






and Federal funds sold

302,845

412,313

171,650

257,057

760,789

Available-for-sale securities, at fair value

8,067,109

6,606,027

5,820,425

5,309,982

4,437,614

Loans and leases*

15,488,980

15,045,837

15,235,827

15,386,721

15,132,600

  Less:  Unearned income

18,441

16,761

16,425

17,037

17,868

             Allowance for credit losses

245,095

242,935

247,049

236,536

217,508

Net loans and leases

15,225,444

14,786,141

14,972,353

15,133,148

14,897,224

Loans held for sale

361,999

289,755

277,600

296,352

261,377

Premises and equipment, net

526,960

508,551

508,053

507,190

499,767

Accrued interest receivable

100,357

102,190

105,513

104,435

137,456

Goodwill

910,448

851,612

852,472

847,744

848,160

Other identifiable intangibles

52,564

54,876

54,858

56,045

58,280

Bank owned life insurance

348,378

333,837

332,543

330,642

328,037

Other real estate owned

12,293

11,043

14,872

7,754

8,410

Other assets

392,252

327,696

302,365

236,107

241,238

Total Assets

$           26,666,296

$           24,545,560

$           23,660,503

$           23,318,877

$           22,707,686

Liabilities






Deposits:






  Demand:  Noninterest bearing

$             7,367,832

$             6,484,703

$             6,391,006

$             6,340,942

$             5,942,570

                  Interest bearing

9,598,550

8,956,420

8,268,528

8,022,755

7,674,479

  Savings

2,851,113

2,550,095

2,386,034

2,280,860

2,152,092

  Other time

2,568,388

2,480,862

2,555,295

2,614,373

2,685,331

Total deposits

22,385,883

20,472,080

19,600,863

19,258,930

18,454,472

Securities sold under agreement to repurchase

707,086

651,694

672,018

681,400

644,127

Federal funds purchased






   and other short-term borrowing

3,901

1,500

3,893

36,696

269,121

Accrued interest payable

11,169

11,607

14,175

15,589

16,268

Junior subordinated debt securities

304,056

297,318

297,145

296,969

296,793

Long-term debt

4,714

4,378

4,488

4,592

4,699

Other liabilities

294,653

293,982

293,332

294,831

283,772

Total Liabilities

23,711,462

21,732,559

20,885,914

20,589,007

19,969,252

Shareholders' Equity






Preferred stock

166,993

166,993

166,993

166,993

166,993

Common stock

266,676

256,536

256,422

256,412

256,515

Capital surplus

674,949

563,529

568,343

563,267

559,737

Accumulated other comprehensive (loss) income

(30,614)

(5,090)

12,432

24,758

23,016

Retained earnings

1,876,830

1,831,033

1,770,399

1,718,440

1,732,173

Total Shareholders' Equity

2,954,834

2,813,001

2,774,589

2,729,870

2,738,434

Total Liabilities & Shareholders' Equity

$           26,666,296

$           24,545,560

$           23,660,503

$           23,318,877

$           22,707,686













*Includes $973.0 million, $1.062 billion, $1.140 billion, $1.207 billion and $975.0 million in PPP loans for the quarter ended June 30, 2021, March 31, 2021, December 31, 2020, September 30, 2020 and June 30, 2020, respectively.

 

BancorpSouth Bank

Consolidated Condensed Statements of Income

(Dollars in thousands, except per share data)

(Unaudited)
















Quarter Ended


Year to Date


Jun-21


Mar-21


Dec-20


Sep-20


Jun-20


Jun-21


Jun-20

INTEREST REVENUE:














Loans and leases

$      171,305


$     169,195


$        174,072


$      175,810


$     173,164


$    340,500


$    350,183

Deposits with other banks

97


108


50


74


207


205


946

Federal funds sold, securities purchased














   under agreement to resell, FHLB and 














      other equity investments

28


6


6


52


178


34


493

Available-for-sale securities:














    Taxable

23,983


21,192


21,895


21,280


20,783


45,175


42,291

    Tax-exempt

676


687


760


986


1,178


1,363


2,238

Loans held for sale

3,040


1,595


2,504


2,468


1,962


4,635


3,385

        Total interest revenue

199,129


192,783


199,287


200,670


197,472


391,912


399,536















INTEREST EXPENSE:














Interest bearing demand

8,247


8,796


9,766


10,773


11,631


17,043


27,153

Savings

626


700


872


1,012


943


1,326


2,233

Other time

6,428


6,966


8,189


9,287


10,296


13,394


21,464

Federal funds purchased and securities sold














   under agreement to repurchase

206


203


276


279


291


409


1,727

Short-term and long-term debt

44


45


47


49


477


89


2,334

Junior subordinated debt

3,387


3,269


3,201


3,338


3,263


6,656


6,524

Other

9


15


-


1


1


24


1

        Total interest expense

18,947


19,994


22,351


24,739


26,902


38,941


61,436















        Net interest revenue

180,182


172,789


176,936


175,931


170,570


352,971


338,100

  Provision for credit losses

11,500


-


5,794


16,000


20,000


11,500


67,250

        Net interest revenue, after provision for














          credit losses

168,682


172,789


171,142


159,931


150,570


341,471


270,850















NONINTEREST REVENUE:














Mortgage banking

9,105


25,310


20,129


27,097


29,557


34,415


39,027

Credit card, debit card and merchant fees

11,589


9,659


10,053


9,938


9,080


21,248


18,256

Deposit service charges

8,849


8,477


9,708


8,892


7,647


17,326


19,329

Security gains(losses), net

96


82


63


18


62


178


(23)

Insurance commissions

36,106


30,667


29,815


32,750


33,118


66,773


62,721

Wealth management

7,543


8,465


6,751


6,471


6,421


16,008


12,991

Gain on sale of PPP loans

21,572


-


-


-


-


21,572


-

Other

7,083


5,276


2,307


4,758


5,373


12,359


15,453

        Total noninterest revenue

101,943


87,936


78,826


89,924


91,258


189,879


167,754















NONINTEREST EXPENSE:














Salaries and employee benefits

108,188


101,060


97,215


104,219


108,103


209,248


216,375

Occupancy, net of rental income

13,187


12,814


13,004


13,053


12,890


26,001


25,598

Equipment

4,967


4,564


4,756


4,519


4,762


9,531


9,411

Deposit insurance assessments

1,638


1,455


1,696


1,522


1,962


3,093


3,508

Pension settlement expense

-


-


5,846


-


-


-


-

Other

46,004


35,930


44,600


31,192


34,787


81,934


74,368

        Total noninterest expense

173,984


155,823


167,117


154,505


162,504


329,807


329,260

        Income before income taxes

96,641


104,902


82,851


95,350


79,324


201,543


109,344

Income tax expense

21,102


23,347


14,046


21,525


18,164


44,449


23,923

        Net income

$        75,539


$       81,555


$          68,805


$        73,825


$       61,160


$    157,094


$      85,421

Less: Preferred dividends

2,372


2,372


2,372


2,372


2,372


4,744


4,744

        Net income available to common shareholders

$        73,167


$       79,183


$          66,433


$        71,453


$       58,788


$    152,350


$      80,677















Net income per common share: Basic

$            0.69


$           0.77


$              0.65


$            0.70


$           0.57


$          1.46


$          0.78

                                                   Diluted

$            0.69


$           0.77


$              0.65


$            0.69


$           0.57


$          1.46


$          0.78

 

BancorpSouth Bank

Selected Loan Data

(Dollars in thousands)

(Unaudited)












Quarter Ended


Jun-21


Mar-21


Dec-20


Sep-20


Jun-20

LOAN AND LEASE PORTFOLIO:










Commercial and industrial










   Commercial and industrial-non real estate

2,056,034


2,865,706


2,673,429


2,937,608


3,038,957

   Commercial and industrial-owner occupied

2,273,433


2,260,456


2,281,127


2,297,008


2,296,287

      Total commercial and industrial

4,329,467


5,126,162


4,954,556


5,234,616


5,335,244

Commercial real estate










   Agricultural

350,067


337,710


317,994


333,839


333,615

   Construction, acquisition and development

1,926,421


1,707,800


1,728,682


1,700,030


1,658,678

   Commercial real estate

3,323,883


3,127,510


3,211,434


3,229,959


3,323,744

      Total commercial real estate

5,600,371


5,173,020


5,258,110


5,263,828


5,316,037

Consumer










   Consumer mortgages

3,991,790


3,700,076


3,726,241


3,704,490


3,646,168

   Home equity

625,365


608,924


630,097


658,708


655,543

   Credit cards

84,699


81,499


89,077


85,760


86,592

      Total consumer

4,701,854


4,390,499


4,445,415


4,448,958


4,388,303

All other

372,347


349,127


364,398


380,333


387,837

      Total loans

$  15,004,039


$  15,038,808


$  15,022,479


$  15,327,735


$  15,427,421











ALLOWANCE FOR CREDIT LOSSES:










Balance, beginning of period

$      241,117


$      244,422


$      250,624


$       237,025


$      218,199











Loans and leases charged-off:










Commercial and industrial










   Commercial and industrial-non real estate

(1,411)


(2,269)


(4,343)


(560)


(1,506)

   Commercial and industrial-owner occupied

(471)


(677)


(1,168)


(441)


(13)

     Total commercial and industrial

(1,882)


(2,946)


(5,511)


(1,001)


(1,519)

Commercial real estate










   Agricultural

-


(98)


(155)


-


(21)

   Construction, acquisition and development

(125)


(807)


(1,773)


-


(9)

   Commercial real estate

(498)


(478)


(3,134)


(738)


-

     Total commercial real estate

(623)


(1,383)


(5,062)


(738)


(30)

Consumer










   Consumer mortgages

(421)


(293)


(731)


(81)


(124)

   Home equity

(64)


(50)


(395)


(41)


(162)

   Credit cards

(476)


(733)


(458)


(682)


(703)

     Total consumer

(961)


(1,076)


(1,584)


(804)


(989)

All other

(396)


(501)


(875)


(599)


(396)

     Total loans charged-off

(3,862)


(5,906)


(13,032)


(3,142)


(2,934)











Recoveries:










Commercial and industrial










   Commercial and industrial-non real estate

2,318


1,031


779


294


277

   Commercial and industrial-owner occupied

735


62


37


163


136

     Total commercial and industrial

3,053


1,093


816


457


413

Commercial real estate










   Agricultural

8


86


24


3


6

   Construction, acquisition and development

1,265


53


73


55


172

   Commercial real estate

26


56


45


209


50

     Total commercial real estate

1,299


195


142


267


228

Consumer










   Consumer mortgages

510


403


230


352


345

   Home equity

201


220


151


132


259

   Credit cards

254


297


211


270


195

     Total consumer

965


920


592


754


799

All other

345


393


280


263


320

     Total recoveries

5,662


2,601


1,830


1,741


1,760











Net recoveries(charge-offs)

1,800


(3,305)


(11,202)


(1,401)


(1,174)











Initial allowance on loans purchased with credit deterioration

12,803


-


-


-


-











Provision:










   Initial provision for loans acquired during the quarter

11,500


-


-


-


-

   Provision for credit losses related to loans and leases

(1,500)


-


5,000


15,000


20,000

     Total provision for loans and leases

10,000


-


5,000


15,000


20,000











Balance, end of period

$      265,720


$      241,117


$      244,422


$       250,624


$      237,025











Average loans for period

$ 15,470,539


$ 15,029,076


$ 15,219,402


$ 15,369,684


$ 15,114,732











Ratio:










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

(0.05%)


0.09%


0.29%


0.04%


0.03%











RESERVE FOR UNFUNDED COMMITMENTS*










Balance, beginning of period

$          7,044


$          7,044


$          6,250


$          5,250


$          5,250

Provision for credit losses for unfunded commitments

1,500


-


794


1,000


-

Balance, end of period

$          8,544


$          7,044


$          7,044


$          6,250


$          5,250











*The Reserve for Unfunded Commitments is classified in other liabilities on the balance sheet.





 

BancorpSouth Bank

Selected Loan Data

(Dollars in thousands)

(Unaudited)














Quarter Ended



Jun-21


Mar-21


Dec-20


Sep-20


Jun-20

BXS ORIGINATED LOANS AND LEASES:






















Loans and leases charged off:











Commercial and industrial











   Commercial and industrial-non real estate


$        (1,108)


$       (1,971)


$       (1,991)


$           (490)


$          (420)

   Commercial and industrial-owner occupied


(471)


(187)


(303)


(434)


(13)

     Total commercial and industrial


(1,579)


(2,158)


(2,294)


(924)


(433)

Commercial real estate











   Agricultural


-


(94)


(124)


-


-

   Construction, acquisition and development


(113)


(344)


(1,709)


-


-

   Commercial real estate


(110)


(27)


(1,704)


(155)


-

     Total real estate


(223)


(465)


(3,537)


(155)


-

Consumer











   Consumer mortgages


(398)


(181)


(537)


(70)


(113)

   Home equity


(64)


(50)


(395)


(41)


(162)

   Credit cards


(476)


(733)


(458)


(682)


(703)

     Total consumer


(938)


(964)


(1,390)


(793)


(978)

All other


(315)


(399)


(698)


(459)


(288)

     Total loans charged off


(3,055)


(3,986)


(7,919)


(2,331)


(1,699)












Recoveries:











Commercial and industrial











   Commercial and industrial-non real estate


1,014


387


645


231


210

   Commercial and industrial-owner occupied


325


61


27


163


136

     Total commercial and industrial


1,339


448


672


394


346

Commercial real estate











   Agricultural


(65)


5


23


3


5

   Construction, acquisition and development


1,184


51


73


55


170

   Commercial real estate


(403)


36


45


208


50

     Total real estate


716


92


141


266


225

Consumer











   Consumer mortgages


359


392


221


350


343

   Home equity


199


219


149


130


258

   Credit cards


254


297


211


270


195

     Total consumer


812


908


581


750


796

All other


287


325


249


235


275

     Total recoveries


3,154


1,773


1,643


1,645


1,642












Net recoveries/(charge-offs)


$              99


$       (2,213)


$       (6,276)


$           (686)


$            (57)

 

BancorpSouth Bank

Selected Loan Data

(Dollars in thousands)

(Unaudited)












Quarter Ended


Jun-21


Mar-21


Dec-20


Sep-20


Jun-20

ACQUIRED LOANS AND LEASES:




















Loans and leases charged off:










Commercial and industrial










   Commercial and industrial-non real estate

$           (303)


$          (298)


$       (2,352)


$            (70)


$        (1,086)

   Commercial and industrial-owner occupied

-


(490)


(865)


(7)


-

     Total commercial and industrial

(303)


(788)


(3,217)


(77)


(1,086)

Commercial real estate










   Agricultural

-


(4)


(31)


-


(21)

   Construction, acquisition and development

(12)


(463)


(64)


-


(9)

   Commercial real estate

(388)


(451)


(1,430)


(583)


-

     Total real estate

(400)


(918)


(1,525)


(583)


(30)

Consumer










   Consumer mortgages

(23)


(112)


(194)


(11)


(11)

   Home equity

-


-


-


-


-

   Credit cards

-


-


-


-


-

     Total consumer

(23)


(112)


(194)


(11)


(11)

All other

(81)


(102)


(177)


(140)


(108)

     Total loans charged off

(807)


(1,920)


(5,113)


(811)


(1,235)











Recoveries:










Commercial and industrial










   Commercial and industrial-non real estate

1,304


644


134


63


67

   Commercial and industrial-owner occupied

410


1


10


-


-

     Total commercial and industrial

1,714


645


144


63


67

Commercial real estate










   Agricultural

73


81


1


-


1

   Construction, acquisition and development

81


2


-


-


2

   Commercial real estate

429


20


-


1


-

     Total real estate

583


103


1


1


3

Consumer










   Consumer mortgages

151


11


9


2


2

   Home equity

2


1


2


2


1

   Credit cards

-


-


-


-


-

     Total consumer

153


12


11


4


3

All other

58


68


31


28


45

     Total recoveries

2,508


828


187


96


118











Net recoveries/(charge-offs)

$          1,701


$       (1,092)


$       (4,926)


$           (715)


$        (1,117)

 

BancorpSouth Bank

Selected Loan Data

(Dollars in thousands)

(Unaudited)












Quarter Ended


Jun-21


Mar-21


Dec-20


Sep-20


Jun-20

NON-PERFORMING ASSETS










NON-PERFORMING LOANS AND LEASES:










  Nonaccrual Loans and Leases










    Commercial and industrial










       Commercial and industrial-non real estate

$    10,485


$         9,703


$       12,768


$    17,936


$       16,124

       Commercial and industrial-owner occupied

11,872


15,019


15,783


18,343


16,745

         Total commercial and industrial

22,357


24,722


28,551


36,279


32,869

    Commercial real estate










       Agricultural

1,284


2,293


5,013


5,907


5,244

       Construction, acquisition and development

2,582


8,494


9,738


10,434


9,715

       Commercial real estate

13,483


12,838


16,249


32,554


45,047

         Total commercial real estate

17,349


23,625


31,000


48,895


60,006

    Consumer










       Consumer mortgages

20,532


23,535


32,951


32,872


30,672

       Home equity

686


847


2,657


3,325


2,584

       Credit cards

122


131


173


144


90

         Total consumer

21,340


24,513


35,781


36,341


33,346

    All other

618


282


1,046


593


532

         Total nonaccrual loans and leases

$    61,664


$       73,142


$       96,378


$  122,108


$      126,753











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

15,386


21,208


14,320


17,641


9,877

  Restructured Loans and Leases, Still Accruing

7,368


6,971


10,475


11,154


11,575

     Total non-performing loans and leases

$    84,418


$      101,321


$      121,173


$  150,903


$      148,205











OTHER REAL ESTATE OWNED:

17,333


9,351


11,395


6,397


7,164











Total Non-performing Assets

$  101,751


$      110,672


$      132,568


$  157,300


$      155,369











  BXS originated assets

$    81,039


$       85,266


$       97,025


$  109,418


$       94,155

  Acquired assets

20,712


25,406


35,543


47,882


61,214

Total Non-performing Assets

$  101,751


$      110,672


$      132,568


$  157,300


$      155,369











Additions to Nonaccrual Loans and Leases During the Quarter

$    16,005


$       10,029


$       11,087


$    19,973


$       36,619











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










    BXS originated loans

$    36,748


$       34,929


$       40,424


$    42,978


$       35,002

    Acquired loans

10,701


2,798


6,048


5,694


10,450

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

$    47,449


$       37,727


$       46,472


$    48,672


$       45,452

 

BancorpSouth Bank

Selected Loan Data

(Dollars in thousands)

(Unaudited)












June 30, 2021








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

$   2,005,765

$                -

$       40,286

$        171

$                -

$    1,885

$                7,927


$          2,056,034

   Commercial and industrial-owner occupied

2,193,141

4,000

63,638

-

-

7,452

5,202


2,273,433

     Total commercial and industrial

4,198,906

4,000

103,924

171

-

9,337

13,129


4,329,467

Commercial real estate










   Agricultural

341,430

-

6,326

-

-

-

2,311


350,067

   Construction, acquisition and development

1,879,040

-

40,498

-

-

714

6,169


1,926,421

   Commercial real estate

3,150,789

-

159,066

-

-

9,316

4,712


3,323,883

     Total commercial real estate

5,371,259

-

205,890

-

-

10,030

13,192


5,600,371

Consumer










   Consumer mortgages

3,926,705

-

63,645

-

-

1,256

184


3,991,790

   Home equity

619,269

-

6,096

-

-

-

-


625,365

   Credit cards

84,699

-

-

-

-

-

-


84,699

     Total consumer

4,630,673

-

69,741

-

-

1,256

184


4,701,854

All other

362,556

-

9,726

-

-

-

65


372,347

     Total loans

$ 14,563,394

$         4,000

$      389,281

$        171

$                -

$  20,623

$              26,570


$         15,004,039











  BXS originated loans

$ 13,007,886

$         4,000

$      219,242

$        171

$                -

$  13,989

$                    -


$         13,245,288

  Acquired loans*

1,555,508

-

170,039

-

-

6,634

26,570


1,758,751

     Total Loans

$ 14,563,394

$         4,000

$      389,281

$        171

$                -

$  20,623

$              26,570


$         15,004,039












March 31, 2021








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

$   2,825,297

$                -

$       30,526

$        171

$                -

$    1,909

$                7,803


$          2,865,706

   Commercial and industrial-owner occupied

2,184,516

3,471

58,754

-

-

11,086

2,629


2,260,456

     Total commercial and industrial

5,009,813

3,471

89,280

171

-

12,995

10,432


5,126,162

Commercial real estate










   Agricultural

331,802

-

2,877

-

-

705

2,326


337,710

   Construction, acquisition and development

1,659,787

1,534

38,665

-

-

2,448

5,366


1,707,800

   Commercial real estate

2,987,075

-

127,147

-

-

9,642

3,646


3,127,510

     Total commercial real estate

4,978,664

1,534

168,689

-

-

12,795

11,338


5,173,020

Consumer










   Consumer mortgages

3,629,182

-

67,881

-

-

2,825

188


3,700,076

   Home equity

603,768

-

5,156

-

-

-

-


608,924

   Credit cards

81,499

-

-

-

-

-

-


81,499

     Total consumer

4,314,449

-

73,037

-

-

2,825

188


4,390,499

All other

343,656

-

5,404

-

-

-

67


349,127

     Total loans

$ 14,646,582

$         5,005

$      336,410

$        171

$                -

$  28,615

$              22,025


$         15,038,808











  BXS originated loans

$ 13,635,053

$         5,005

$      252,140

$        171

$                -

$  18,188

$                    -


$         13,910,557

  Acquired loans*

1,011,529

-

84,270

-

-

10,427

22,025


1,128,251

     Total Loans

$ 14,646,582

$         5,005

$      336,410

$        171

$                -

$  28,615

$              22,025


$         15,038,808





















*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


Jun-21


Mar-21


Dec-20


Sep-20


Jun-20

LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE:










Pass

$ 14,563,394


$ 14,646,582


$ 14,602,079


$ 14,877,943


$  14,985,673

Special Mention

4,000


5,005


8,736


-


4,264

Substandard

389,281


336,410


358,988


372,483


350,264

Doubtful

171


171


172


178


179

Loss

-


-


-


-


-

Impaired

20,623


28,615


29,545


49,818


57,406

Purchased Credit Deteriorated (Loss)

26,570


22,025


22,959


27,313


29,635

   Total

$ 15,004,039


$ 15,038,808


$ 15,022,479


$ 15,327,735


$  15,427,421











BXS ORIGINATED LOAN PORTFOLIO BY INTERNALLY










   ASSIGNED GRADE:










Pass

$ 13,007,886


$ 13,635,053


$ 13,459,529


$ 13,592,460


$  13,516,292

Special Mention

4,000


5,005


8,736


-


2,741

Substandard

219,242


252,140


259,682


252,875


231,687

Doubtful

171


171


172


178


179

Loss

-


-


-


-


-

Impaired

13,989


18,188


17,520


30,909


28,288

Purchased Credit Deteriorated (Loss)

-


-


-


-


-

   Total

$ 13,245,288


$ 13,910,557


$ 13,745,639


$ 13,876,422


$  13,779,187











ACQUIRED LOAN PORTFOLIO BY INTERNALLY










   ASSIGNED GRADE:










Pass

$  1,555,508


$   1,011,529


$  1,142,550


$   1,285,483


$    1,469,381

Special Mention

-


-


-


-


1,523

Substandard

170,039


84,270


99,306


119,608


118,577

Doubtful

-


-


-


-


-

Loss

-


-


-


-


-

Impaired

6,634


10,427


12,025


18,909


29,118

Purchased Credit Deteriorated (Loss)

26,570


22,025


22,959


27,313


29,635

   Total

$  1,758,751


$   1,128,251


$  1,276,840


$   1,451,313


$    1,648,234

 

BancorpSouth Bank

Geographical Information

(Dollars in thousands)

(Unaudited)












June 30, 2021


Alabama





Tennessee





and Florida





and





Panhandle

Arkansas

Louisiana

Mississippi

Missouri

Georgia

Texas

Other

Total

LOAN AND LEASE PORTFOLIO:










Commercial and industrial










   Commercial and industrial-non real estate

$    200,136

$    140,703

$    189,328

$    438,063

$      70,107

$    124,418

$    886,927

$       6,352

$   2,056,034

   Commercial and industrial-owner occupied

304,416

160,747

217,698

579,772

63,502

119,129

827,525

644

2,273,433

     Total commercial and industrial

504,552

301,450

407,026

1,017,835

133,609

243,547

1,714,452

6,996

4,329,467

Commercial real estate










   Agricultural

32,020

68,507

22,108

66,530

6,920

12,187

140,762

1,033

350,067

   Construction, acquisition and development

241,404

56,528

70,949

359,989

20,030

92,610

1,084,692

219

1,926,421

   Commercial real estate

476,140

313,530

236,752

632,114

202,824

230,910

1,229,165

2,448

3,323,883

     Total commercial real estate

749,564

438,565

329,809

1,058,633

229,774

335,707

2,454,619

3,700

5,600,371

Consumer










   Consumer mortgages

703,186

322,580

343,656

815,369

109,712

356,234

1,305,445

35,608

3,991,790

   Home equity

128,529

43,435

70,696

201,327

16,118

126,052

39,208

-

625,365

   Credit cards

-

-

-

-

-

-

-

84,699

84,699

     Total consumer

831,715

366,015

414,352

1,016,696

125,830

482,286

1,344,653

120,307

4,701,854

All other

64,976

31,056

32,756

122,687

1,750

20,578

98,232

312

372,347

     Total loans

$ 2,150,807

$ 1,137,086

$ 1,183,943

$ 3,215,851

$    490,963

$ 1,082,118

$ 5,611,956

$    131,315

$ 15,004,039











Loan growth, excluding loans acquired during










    the quarter (annualized)

5.29%

(30.14%)

(48.57%)

(28.97%)

(11.70%)

(39.49%)

(16.63%)

(69.02%)

(22.86%)

Loan growth, excluding PPP loans (annualized)

101.71%

(6.60%)

(5.03%)

(5.16%)

5.60%

25.94%

36.65%

(13.45%)

25.18%











NON-PERFORMING LOANS AND LEASES:










Commercial and industrial










   Commercial and industrial-non real estate

$          525

$          689

$       1,369

$          973

$          936

$          314

$       6,178

$              -

$       10,984

   Commercial and industrial-owner occupied

571

827

1,067

1,076

163

-

10,758

-

14,462

     Total commercial and industrial

1,096

1,516

2,436

2,049

1,099

314

16,936

-

25,446

Commercial real estate










   Agricultural

63

219

-

964

-

-

98

-

1,344

   Construction, acquisition and development

119

630

72

25

-

191

1,676

-

2,713

   Commercial real estate

2,756

171

1,741

872

-

-

8,762

-

14,302

     Total commercial real estate

2,938

1,020

1,813

1,861

-

191

10,536

-

18,359

Consumer










   Consumer mortgages

9,012

3,438

3,764

9,050

1,454

3,167

6,649

1,184

37,718

   Home equity

244

50

298

270

87

233

132

-

1,314

   Credit cards

-

-

-

-

-

-

-

771

771

     Total consumer

9,256

3,488

4,062

9,320

1,541

3,400

6,781

1,955

39,803

All other

121

2

45

190

-

48

404

-

810

     Total loans

$      13,411

$       6,026

$       8,356

$      13,420

$       2,640

$       3,953

$      34,657

$       1,955

$       84,418











NON-PERFORMING LOANS AND LEASES










   AS A PERCENTAGE OF OUTSTANDING:










Commercial and industrial










   Commercial and industrial-non real estate

0.26%

0.49%

0.72%

0.22%

1.34%

0.25%

0.70%

0.00%

0.53%

   Commercial and industrial-owner occupied

0.19%

0.51%

0.49%

0.19%

0.26%

0.00%

1.30%

0.00%

0.64%

     Total commercial and industrial

0.22%

0.50%

0.60%

0.20%

0.82%

0.13%

0.99%

0.00%

0.59%

Commercial real estate










   Agricultural

0.20%

0.32%

0.00%

1.45%

0.00%

0.00%

0.07%

0.00%

0.38%

   Construction, acquisition and development

0.05%

1.11%

0.10%

0.01%

0.00%

0.21%

0.15%

0.00%

0.14%

   Commercial real estate

0.58%

0.05%

0.74%

0.14%

0.00%

0.00%

0.71%

0.00%

0.43%

     Total commercial real estate

0.39%

0.23%

0.55%

0.18%

0.00%

0.06%

0.43%

0.00%

0.33%

Consumer










   Consumer mortgages

1.28%

1.07%

1.10%

1.11%

1.33%

0.89%

0.51%

3.33%

0.94%

   Home equity

0.19%

0.12%

0.42%

0.13%

0.54%

0.18%

0.34%

N/A

0.21%

   Credit cards

N/A

N/A

N/A

N/A

N/A

N/A

N/A

0.91%

0.91%

     Total consumer

1.11%

0.95%

0.98%

0.92%

1.22%

0.70%

0.50%

1.63%

0.85%

All other

0.19%

0.01%

0.14%

0.15%

0.00%

0.23%

0.41%

0.00%

0.22%

     Total loans

0.62%

0.53%

0.71%

0.42%

0.54%

0.37%

0.62%

1.49%

0.56%

 

BancorpSouth Bank

Noninterest Revenue and Expense

(Dollars in thousands)

(Unaudited)
















Quarter Ended


Year to Date


Jun-21


Mar-21


Dec-20


Sep-20


Jun-20


Jun-21


Jun-20

NONINTEREST REVENUE:














Mortgage banking excl. MSR and MSR Hedge market value adj

$    11,013


$       17,929


$       19,917


$    26,667


$       31,930


$  28,942


$  52,483

MSR and MSR Hedge market value adjustment

(1,908)


7,381


212


430


(2,373)


5,473


(13,456)

Credit card, debit card and merchant fees

11,589


9,659


10,053


9,938


9,080


21,248


18,256

Deposit service charges

8,849


8,477


9,708


8,892


7,647


17,326


19,329

Securities gains (losses), net

96


82


63


18


62


178


(23)

Insurance commissions

36,106


30,667


29,815


32,750


33,118


66,773


62,721

Trust income

4,434


5,129


4,046


3,902


4,064


9,563


8,077

Annuity fees

50


51


53


53


54


101


109

Brokerage commissions and fees

3,059


3,285


2,652


2,516


2,303


6,344


4,805

Gain on sale of PPP loans

21,572


-


-


-


-


21,572


-

Bank-owned life insurance

1,845


2,020


2,425


1,902


1,855


3,865


3,854

Other miscellaneous income

5,238


3,256


(118)


2,856


3,518


8,494


11,599

     Total noninterest revenue

$  101,943


$       87,936


$       78,826


$    89,924


$       91,258


$ 189,879


$ 167,754















NONINTEREST EXPENSE:














Salaries and employee benefits

$  108,188


$      101,060


$       97,215


$  104,219


$      108,103


$ 209,248


$ 216,375

Occupancy, net of rental income

13,187


12,814


13,004


13,053


12,890


26,001


25,598

Equipment

4,967


4,564


4,756


4,519


4,762


9,531


9,411

Deposit insurance assessments

1,638


1,455


1,696


1,522


1,962


3,093


3,508

Pension settlement expense

-


-


5,846


-


-


-


-

Advertising

783


1,004


899


826


918


1,787


2,017

Foreclosed property expense

649


1,021


2,122


(278)


1,306


1,670


2,230

Telecommunications

1,517


1,398


1,448


1,462


1,512


2,915


2,973

Public relations

1,012


741


897


1,130


459


1,753


1,139

Data processing

11,024


10,424


9,980


9,477


9,693


21,448


19,339

Computer software

4,887


5,113


5,301


4,779


4,979


10,000


9,294

Amortization of intangibles

2,401


2,318


2,499


2,357


2,355


4,719


4,749

Legal

774


1,166


1,474


(316)


1,375


1,940


2,273

Merger expense

9,962


1,649


212


129


510


11,611


5,004

Postage and shipping

1,317


1,547


1,418


1,199


1,198


2,864


2,639

Other miscellaneous expense

11,678


9,549


18,350


10,427


10,482


21,227


22,711

     Total noninterest expense

$  173,984


$      155,823


$      167,117


$  154,505


$      162,504


$ 329,807


$ 329,260















INSURANCE COMMISSIONS:














Property and casualty commissions

$    26,040


$       21,949


$       21,304


$    24,060


$       23,644


$  47,989


$  44,890

Life and health commissions

7,130


6,494


5,915


6,072


6,771


13,624


12,946

Risk management income

611


613


829


609


540


1,224


1,072

Other

2,325


1,611


1,767


2,009


2,163


3,936


3,813

     Total insurance commissions

$    36,106


$       30,667


$       29,815


$    32,750


$       33,118


$  66,773


$  62,721

 

BancorpSouth Bank

Selected Additional Information

(Dollars in thousands)

(Unaudited)








Quarter Ended


Jun-21

Mar-21

Dec-20

Sep-20

Jun-20

MORTGAGE SERVICING RIGHTS:






Fair value, beginning of period

$      60,332

$       47,571

$       44,944

$      40,821

$       42,243

Additions to mortgage servicing rights:






   Originations of servicing assets

6,833

5,588

6,608

7,041

4,297

Changes in fair value:






   Due to payoffs/paydowns

(2,946)

(3,273)

(3,898)

(3,198)

(3,144)

   Due to change in valuation inputs or






     assumptions used in the valuation model

(3,604)

10,446

(83)

280

(2,575)

   Other changes in fair value

-

-

-

-

-

Fair value, end of period

$      60,615

$       60,332

$       47,571

$      44,944

$       40,821







MORTGAGE BANKING REVENUE:






Production revenue:






   Origination

$       8,646

$       15,955

$       18,561

$      23,632

$       30,194

   Servicing

5,313

5,247

5,254

6,233

4,880

   Payoffs/Paydowns

(2,946)

(3,273)

(3,898)

(3,198)

(3,144)

     Total production revenue

11,013

17,929

19,917

26,667

31,930

Market value adjustment on MSR

(3,604)

10,446

(83)

280

(2,575)

Market value adjustment on MSR Hedge

1,696

(3,065)

295

150

202

Total mortgage banking revenue

$       9,105

$       25,310

$       20,129

$      27,097

$       29,557



















Mortgage loans serviced

$ 7,407,690

$   7,259,808

$   7,330,293

$ 7,218,090

$   7,000,425

MSR/mtg loans serviced

0.82%

0.83%

0.65%

0.62%

0.58%







AVAILABLE-FOR-SALE SECURITIES, at fair value






U.S. Government agencies

2,758,412

2,642,646

2,871,408

$ 3,116,458

$   3,348,206

U.S. Government agency issued residential






   mortgage-back securities

4,709,540

3,438,246

2,421,409

1,625,325

699,864

U.S. Government agency issued commercial






   mortgage-back securities

1,478,058

1,414,345

806,206

758,116

759,980

Obligations of states and political subdivisions

117,248

126,589

113,953

141,896

163,121

Corporate bonds

20,853

18,442

18,030

17,990

2,000

Total available-for-sale securities

$ 9,084,111

$   7,640,268

$   6,231,006

$ 5,659,785

$   4,973,171

 

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 average tangible equity, return on average tangible common equity, operating return on average tangible equity-excluding MSR, operating return on average 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, average 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




6/30/2021


3/31/2021


12/31/2020


9/30/2020


6/30/2020


6/30/2021


6/30/2020

















Net income


$      75,539


$      81,555


$       68,805


$          73,825


$          61,160


$         157,094


$         85,421

Plus:

Merger expense, net of tax


7,476


1,238


159


97


383


8,714


3,755


Initial provision for acquired loans,
















  net of tax


8,631


-


-


-


-


8,631


751


Pension settlement expense, net of tax


-


-


4,388


-


-


-


-

Less:

Security gains(losses), net of tax


72


62


48


13


47


134


(17)

Net operating income


$      91,574


$      82,731


$       73,304


$          73,909


$          61,496


$         174,305


$         89,944

Less:

Preferred dividends


2,372


2,372


2,372


2,372


2,372


4,744


4,744

Net operating income available to















common shareholders


$      89,202


$      80,359


$       70,932


$          71,537


$          59,124


$         169,561


$         85,200

































Net operating income


$      91,574


$      82,731


$       73,304


$          73,909


$          61,496


$         174,305


$         89,944

Less:

MSR market value adjustment, net of tax


(1,432)


5,539


159


323


(1,781)


4,107


(10,099)

Net operating income-excluding MSR


$      93,006


$      77,192


$       73,145


$          73,586


$          63,277


$         170,198


$       100,043

Less:

Preferred dividends


2,372


2,372


2,372


2,372


2,372


4,744


4,744

Net operating income available to common















shareholders-excluding MSR


$      90,634


$      74,820


$       70,773


$          71,214


$          60,905


$         165,454


$         95,299

































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




























Net income


$      75,539


$      81,555


$       68,805


$          73,825


$          61,160


$         157,094


$         85,421

Plus:

Provision for credit losses


11,500


-


5,794


16,000


20,000


11,500


67,250


Merger expense


9,962


1,649


212


129


510


11,611


5,004


Pension settlement expense


-


-


5,846


-


-


-


-


Income tax expense


21,102


23,347


14,046


21,525


18,164


44,449


23,923

Less:

Security gains(losses)


96


82


63


18


62


178


(23)


MSR market value adjustment


(1,908)


7,381


212


430


(2,373)


5,473


(13,456)

Pre-tax pre-provision net revenue


$    119,915


$      99,088


$       94,428


$         111,031


$         102,145


$         219,003


$       195,077

































Reconciliation of Total Operating Expense to Total Noninterest Expense:



























Total noninterest expense


$    173,984


$    155,823


$     167,911


$         155,505


$         162,504


$         329,807


$       329,260

Less:

Merger expense


9,962


1,649


212


129


510


11,611


5,004


Pension settlement expense


-


-


5,846


-


-


-


-

Total operating expense


$    164,022


$    154,174


$     161,853


$         155,376


$         161,994


$         318,196


$       324,256

 

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



6/30/2021


3/31/2021


12/31/2020


9/30/2020


6/30/2020


6/30/2021


6/30/2020

Tangible assets















Total assets


$ 27,612,365


$  25,802,497


$  24,081,194


$ 23,555,422


$  23,236,176


$ 27,612,365


$ 23,236,176

Less:  

Goodwill


957,474


851,612


851,612


847,531


847,984


957,474


847,984


Other identifiable intangible assets


54,659


53,581


55,899


54,757


56,989


54,659


56,989

Total tangible assets


$ 26,600,232


$  24,897,304


$  23,173,683


$ 22,653,134


$  22,331,203


$ 26,600,232


$ 22,331,203

Less:  

PPP loans


167,144


1,146,000


975,421


1,212,246


1,192,715


167,144


1,192,715

Total tangible assets-excluding PPP loans


$ 26,433,088


$  23,751,304


$  22,198,262


$ 21,440,888


$  21,138,488


$ 26,433,088


$ 21,138,488

















PERIOD END BALANCES:















Tangible shareholders' equity















Total shareholders' equity


$   3,069,574


$    2,825,198


$    2,822,477


$   2,782,539


$    2,732,687


$   3,069,574


$   2,732,687

Less:

Goodwill


957,474


851,612


851,612


847,531


847,984


957,474


847,984


Other identifiable intangible assets


54,659


53,581


55,899


54,757


56,989


54,659


56,989

Total tangible shareholders' equity


$   2,057,441


$    1,920,005


$    1,914,966


$   1,880,251


$    1,827,714


$   2,057,441


$   1,827,714

Less:

Preferred stock


166,993


166,993


166,993


166,993


166,993


166,993


166,993

Total tangible common shareholders' equity


$   1,890,448


$    1,753,012


$    1,747,973


$   1,713,258


$    1,660,721


$   1,890,448


$   1,660,721

















AVERAGE BALANCES:















Tangible shareholders' equity















Total shareholders' equity


$   2,954,834


$    2,813,001


$    2,774,589


$   2,729,870


$    2,738,434


$   2,884,309


$   2,698,567

Less:

Goodwill


910,448


851,612


852,472


847,744


848,160


881,192


846,398


Other identifiable intangible assets


52,564


54,876


54,858


56,045


58,280


53,714


58,542

Total tangible shareholders' equity


$   1,991,822


$    1,906,513


$    1,867,259


$   1,826,081


$    1,831,994


$   1,949,403


$   1,793,627

Less:

Preferred stock


166,993


166,993


166,993


166,993


166,993


166,993


167,007

Total tangible common shareholders' equity


$   1,824,829


$    1,739,520


$    1,700,266


$   1,659,088


$    1,665,001


$   1,782,410


$   1,626,620

















Total average assets


$ 26,666,296


$  24,545,560


$  23,660,503


$ 23,318,877


$  22,707,686


$ 25,611,786


$ 21,948,661

Total shares of common stock outstanding


108,614,595


102,624,818


102,561,480


102,558,459


102,566,301


108,614,595


102,566,301

Average shares outstanding-diluted


105,838,056


102,711,584


102,817,409


102,839,749


102,827,225


104,274,819


103,780,561

















Tangible shareholders' equity to tangible assets (1)


7.73%


7.71%


8.26%


8.30%


8.18%


7.73%


8.18%

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


7.78%


8.08%


8.63%


8.77%


8.65%


7.78%


8.65%

Tangible common shareholders' equity to tangible assets (3)


7.11%


7.04%


7.54%


7.56%


7.44%


7.11%


7.44%

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


7.15%


7.38%


7.87%


7.99%


7.86%


7.15%


7.86%

Return on average tangible equity (5)


15.21%


17.35%


14.66%


16.08%


13.43%


16.25%


9.58%

Return on average tangible common equity (6)


16.08%


18.46%


15.54%


17.13%


14.20%


17.24%


9.97%

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


18.73%


16.42%


15.58%


16.03%


13.89%


17.61%


11.22%

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


19.92%


17.44%


16.56%


17.08%


14.71%


18.72%


11.78%

Operating return on average assets-excluding MSR (9)


1.40%


1.28%


1.23%


1.26%


1.12%


1.34%


0.92%

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


12.62%


11.13%


10.49%


10.72%


9.29%


11.90%


7.46%

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


13.04%


11.47%


10.80%


11.05%


9.53%


12.28%


7.57%

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


1.80%


1.64%


1.59%


1.89%


1.81%


1.72%


1.79%

Tangible book value per common share (13)


$         17.41


$          17.08


$          17.04


$         16.71


$         16.19


$         17.41


$         16.19

Operating earnings per common share (14)


$           0.84


$            0.78


$            0.69


$           0.70


$           0.57


$           1.63


$           0.82

Operating earnings per common share-excluding MSR (15)


$           0.86


$            0.73


$            0.69


$           0.69


$           0.59


$           1.59


$           0.92

































(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 hareholders' 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:https://www.prnewswire.com/news-releases/bancorpsouth-announces-second-quarter-2021-results-301338860.html

SOURCE BancorpSouth Bank

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