BANCORPSOUTH, INC. TUPELO, Miss., July 20, 2016 /PRNewswire/ -- BancorpSouth, Inc. (NYSE: BXS) today announced financial results for the quarter ended June 30, 2016.
Highlights for the second quarter of 2016 included:
-- Net income of $34.7 million, or $0.37 per diluted share.
-- Generated net loan growth of $131.3 million, or 5.1 percent on an
annualized basis.
-- Reached a settlement with the Consumer Financial Protection Bureau and
the U.S. Department of Justice of their joint investigation of the
Company's fair lending practices.
-- Earnings were adversely impacted by a negative mortgage servicing rights
("MSR") valuation adjustment of $4.1 million.
-- Net operating income - excluding MSR of $37.2 million, or $0.39 per
diluted share.
-- Continued stable credit quality; recorded provision for credit losses of
$2.0 million for the quarter.
-- Net interest margin remained stable at 3.56 percent.
-- Continued progress toward leveraging cost structure as total noninterest
expense was essentially flat compared to both the second quarter of 2015
and the first quarter of 2016, excluding disclosed non-operating items.
The Company reported net income of $34.7 million, or $0.37 per diluted share, for the second quarter of 2016 compared with net income of $39.7 million, or $0.41 per diluted share, for the second quarter of 2015 and net income of $22.5 million, or $0.24 per diluted share, for the first quarter of 2016.
The Company reported net operating income - excluding MSR of $37.2 million, or $0.39 per diluted share, for the second quarter of 2016 compared to $37.0 million, or $0.39 per diluted share, for the second quarter of 2015 and $36.9 million, or $0.39 per diluted share, for the first quarter of 2016.
"During the second quarter, we announced a settlement with the Consumer Financial Protection Bureau and the U.S. Department of Justice regarding their joint investigation of our fair lending practices," remarked Dan Rollins, BancorpSouth Chairman and Chief Executive Officer. "This settlement did not materially impact our second quarter financial results as we previously recorded an associated liability of $13.8 million during the first quarter of this year. We believe putting this matter behind us was in the best interests of our customers, teammates, and shareholders. We are excited to move forward continuing to do what we do best, which is serve our customers and communities as well as deliver returns to our shareholders.
"Despite this distraction, our core financial results continue to improve. Our mortgage team generated production volume of $462.6 million during the quarter, which contributed to mortgage production and servicing revenue totaling $13.1 million. Total mortgage banking revenue was adversely impacted by a negative MSR valuation adjustment of $4.1 million. We reported loan growth of $131.3 million, or 5.1 percent annualized, while our net interest margin remained stable at 3.56 percent. Finally, we continue to challenge expenses and hold our core operating expenses in a tight range quarter after quarter. Our operating efficiency ratio - excluding MSR was 68.2 percent for the quarter, which is reflective of the hard work of our teammates and the focus placed on challenging every dollar we spend."
Net Interest Revenue
Net interest revenue was $112.3 million for the second quarter of 2016, an increase of 4.7 percent from $107.3 million for the second quarter of 2015 and an increase of 1.0 percent from $111.2 million for the first quarter of 2016. The fully taxable equivalent net interest margin was 3.56 percent for the second quarter of 2016 compared to 3.54 percent for the second quarter of 2015 and 3.56 percent for the first quarter of 2016. Yields on loans and leases were 4.20 percent for the second quarter of 2016 compared with 4.23 percent for the second quarter of 2015 and 4.21 percent for the first quarter of 2016, while yields on total interest earning assets were 3.78 percent for the second quarter of 2016 compared with 3.78 percent for the second quarter of 2015 and 3.78 percent for the first quarter of 2016. The average cost of deposits was 0.21 percent for the second quarter of 2016 compared to 0.23 percent for the second quarter of 2015 and 0.21 percent for the first quarter of 2016.
Asset, Deposit and Loan Activity
Total assets were $14.1 billion at June 30, 2016 compared with $13.6 billion at June 30, 2015. Loans and leases, net of unearned income, were $10.6 billion at June 30, 2016 compared with $10.0 billion at June 30, 2015.
Total deposits were $11.4 billion at June 30, 2016 compared with $11.1 billion at June 30, 2015. A decrease in time deposits of $54.4 million, or 2.8 percent, at June 30, 2016 compared to June 30, 2015 and a decrease in interest bearing demand deposits of $42.8 million, or 0.9 percent were more than offset by growth in other lower cost deposits. Noninterest bearing demand deposits increased $221.5 million, or 7.6 percent, over the same period, while savings deposits increased $105.1 million, or 7.5 percent.
Provision for Credit Losses and Allowance for Credit Losses
Earnings for the quarter reflect a provision for credit losses of $2.0 million, compared to a negative provision of $5.0 million for the second quarter of 2015 and a provision of $1.0 million for the first quarter of 2016. Total non-performing assets ("NPAs") were $94.9 million, or 0.90 percent of net loans and leases, at June 30, 2016 compared with $103.7 million, or 1.04 percent of net loans and leases, at June 30, 2015, and $106.9 million, or 1.02 percent of net loans and leases, at March 31, 2016.
Net charge-offs for the second quarter of 2016 were $1.6 million, compared with net recoveries of $6.7 million for the second quarter of 2015 and net charge-offs of $1.0 million for the first quarter of 2016. Gross charge-offs were $4.3 million for the second quarter of 2016, compared with $5.0 million for the second quarter of 2015 and $3.2 million for the first quarter of 2016. Gross recoveries of previously charged-off loans were $2.7 million for the second quarter of 2016, compared with $11.7 million for the second quarter of 2015 and $2.3 million for the first quarter of 2016. Annualized net charge-offs were 0.06 percent of average loans and leases for the second quarter of 2016, compared with annualized net recoveries of 0.27 percent for the second quarter of 2015 and annualized net charge-offs of 0.04 percent for the first quarter of 2016.
Non-performing loans ("NPLs") were $80.2 million, or 0.76 percent of net loans and leases, at June 30, 2016, compared with $79.4 million, or 0.79 percent of net loans and leases, at June 30, 2015, and $94.2 million, or 0.90 percent of net loans and leases, at March 31, 2016. The allowance for credit losses was $126.9 million, or 1.20 percent of net loans and leases, at June 30, 2016, compared with $138.3 million, or 1.38 percent of net loans and leases, at June 30, 2015 and $126.5 million, or 1.21 percent of net loans and leases, at March 31, 2016.
NPLs at June 30, 2016 consisted primarily of $68.6 million of nonaccrual loans, compared with $81.9 million of nonaccrual loans at March 31, 2016. NPLs at June 30, 2016 also included $1.9 million of loans 90 days or more past due and still accruing, compared with $4.6 million of such loans at March 31, 2016, and included restructured loans still accruing of $9.7 million at June 30, 2016, compared with $7.8 million of such loans at March 31, 2016. Early stage past due loans, representing loans 30-89 days past due, totaled $31.9 million at June 30, 2016 compared to $23.6 million at March 31, 2016. Other real estate owned increased $2.0 million to $14.7 million during the second quarter of 2016 from $12.7 million at March 31, 2016.
Noninterest Revenue
Noninterest revenue was $69.7 million for the second quarter of 2016, compared with $74.3 million for the second quarter of 2015 and $65.5 million for the first quarter of 2016. These results included a negative MSR valuation adjustment of $4.1 million for the second quarter of 2016 compared with a positive MSR valuation adjustment of $4.3 million for the second quarter of 2015 and a negative MSR valuation adjustment of $8.0 million for the first quarter of 2016. Valuation adjustments in the MSR asset are driven primarily by fluctuations in interest rates period over period.
Excluding the MSR valuation adjustments, mortgage banking revenue was $13.1 million for the second quarter of 2016, compared with $9.8 million for the second quarter of 2015 and $10.6 million for the first quarter of 2016. Mortgage origination volume for the second quarter of 2016 was $462.6 million, compared with $417.2 million for the second quarter of 2015 and $315.4 million for the first quarter of 2016.
Credit and debit card fee revenue was $9.5 million for the second quarter of 2016, compared with $9.3 million for the second quarter of 2015 and $9.0 million for the first quarter of 2016. Deposit service charge revenue was $11.0 million for the second quarter of 2016, compared with $11.5 million for the second quarter of 2015 and $11.0 million for the first quarter of 2016. Insurance commission revenue was $28.8 million for the second quarter of 2016, compared with $29.3 million for the second quarter of 2015 and $33.2 million for the first quarter of 2016. Wealth management revenue was $5.3 million for the second quarter of 2016, compared with $5.5 million for the second quarter of 2015 and $5.1 million for the first quarter of 2016.
Noninterest Expense
Noninterest expense for the second quarter of 2016 was $128.7 million, compared with $128.2 million for the second quarter of 2015 and $142.3 million for the first quarter of 2016. Salaries and employee benefits expense was $81.8 million for the second quarter of 2016 compared to $79.8 million for the second quarter of 2015 and $82.5 million for the first quarter of 2016. Occupancy expense was $10.1 million for the second quarter of 2016, compared with $10.4 million for the second quarter of 2015 and $10.3 million for the first quarter of 2016. Other noninterest expense was $30.9 million for the second quarter of 2016, compared to $31.6 million for the second quarter of 2015 and $33.2 million for the first quarter of 2016. Total noninterest expense for the first quarter of 2016 included a total charge of $13.8 million to reflect the probable and estimable liability associated with the joint investigation by the Consumer Financial Protection Bureau and the U.S. Department of Justice, $10.3 million of which is reflected as regulatory settlement expense and $3.5 million of which is included in other noninterest expense. The settlement of this matter did not have a material financial impact on second quarter 2016 financial results.
Capital Management
The Company's equity capitalization is comprised entirely of common stock. BancorpSouth's ratio of shareholders' equity to assets was 12.12 percent at June 30, 2016, compared with 12.32 percent at June 30, 2015 and 12.06 percent at March 31, 2016. The ratio of tangible shareholders' equity to tangible assets was 10.11 percent at June 30, 2016, compared with 10.26 percent at June 30, 2015 and 10.05 percent at March 31, 2016.
Estimated regulatory capital ratios at June 30, 2016 were calculated in accordance with the Basel III capital framework. BancorpSouth is a "well capitalized" financial holding company, as defined by federal regulations, with Tier 1 risk-based capital of 12.37 percent at June 30, 2016 and total risk based capital of 13.45 percent, compared with required minimum levels of 8 percent and 10 percent, respectively, for "well capitalized" classification.
Transactions
On January 8, 2014, the Company announced the signing of a definitive merger agreement with Ouachita Bancshares Corp., parent company of Ouachita Independent Bank (collectively referred to as "OIB"), headquartered in Monroe, Louisiana, pursuant to which Ouachita Bancshares Corp. will be merged with and into the Company. OIB operates 11 full-service banking offices along the I-20 corridor and has a loan production office in Madison, Mississippi. As of June 30, 2016, OIB, on a consolidated basis, reported total assets of $667.1 million, total loans of $481.2 million and total deposits of $570.7 million. Under the terms of the definitive agreement, the Company will issue approximately 3,675,000 shares of the Company's common stock plus $22.875 million in cash for all outstanding shares of Ouachita Bancshares Corp.'s capital stock, subject to certain conditions and potential adjustments. The merger has been unanimously approved by the Board of Directors of each company and was approved by OIB shareholders on April 8, 2014. On February 25, 2015, the Company re-filed the merger application for the merger with Ouachita Bancshares Corp. with the appropriate regulatory agencies. On June 30, 2015, the Company announced the merger agreement was extended through December 31, 2015 to allow for additional time to obtain the necessary regulatory approvals and to satisfy all closing conditions. Although the merger agreement has not been extended beyond December 31, 2015, the amended agreement remains in effect until terminated by the Board of Directors of the Company or OIB. The terms of the amended agreement provide for a minimum total deal value of $111.1 million but also allow Ouachita Bancshares Corp. to terminate the agreement if the average closing price of the Company's common stock declines below a certain threshold prior to closing. The transaction is expected to close shortly after receiving all required regulatory approvals, although the Company can provide no assurance that the merger will close timely or at all.
On January 21, 2014, the Company announced the signing of a definitive merger agreement with Central Community Corporation, headquartered in Temple, Texas, pursuant to which Central Community Corporation will be merged with and into the Company. Central Community Corporation is the parent company of First State Bank Central Texas ("First State Bank"), which is headquartered in Austin, Texas. First State Bank operates 31 full-service banking offices in central Texas. As of June 30, 2016, Central Community Corporation, on a consolidated basis, reported total assets of $1.4 billion, total loans of $601.9 million and total deposits of $1.1 billion. Under the terms of the definitive agreement, the Company will issue approximately 7,250,000 shares of the Company's common stock plus $28.5 million in cash for all outstanding shares of Central Community Corporation's capital stock, subject to certain conditions and potential adjustments. The merger has been unanimously approved by the Board of Directors of each company and was approved by Central Community Corporation shareholders on April 24, 2014. On February 25, 2015, the Company re-filed the merger application for the merger with Central Community Corporation with the appropriate regulatory agencies. On June 30, 2015, the Company announced the merger agreement was extended through December 31, 2015 to allow for additional time to obtain the necessary regulatory approvals and to satisfy all closing conditions. Although the merger agreement has not been extended beyond December 31, 2015, the amended agreement remains in effect until terminated by the Board of Directors of the Company or Central Community Corporation. The terms of the amended agreement provide for a minimum total deal value of $202.5 million but also allow Central Community Corporation to terminate the agreement if the average closing price of the Company's common stock declines below a certain threshold prior to closing. The transaction is expected to close shortly after receiving all required regulatory approvals, although the Company can provide no assurance that the merger will close timely or at all.
For the most recent information regarding the status of the merger with Ouachita Bancshares Corp. and the status of the merger with Central Community Corporation in our periodic reports, please refer to the section titled "Recent Acquisitions and Transaction Activity" in Part I, Item 1, and Part I, Item 1A, of the Annual Report on Form 10-K that was previously filed with the SEC on February 23, 2016.
Summary
Rollins concluded, "Our financial results reflect the same simple story we have been communicating quarter after quarter. We continue to grow revenue while managing total noninterest expense in a very tight range. Revenue growth has been driven by increases in net interest income as we grow our balance sheet and maintain a stable net interest margin as well growth in certain of our non-interest products, including mortgage banking revenue. Our insurance teammates continue to focus on growing our customer base to battle industry pricing headwinds. I'm confident we are positioned to continue to improve our operating performance and enhance shareholder value as we move forward."
Conference Call
BancorpSouth will conduct a conference call to discuss its second quarter 2016 results on July 21, 2016, at 10:00 a.m. (Central Time). Investors may listen via the Internet by accessing BancorpSouth's website at http://www.bancorpsouth.com. A replay of the conference call will be available at BancorpSouth's website for at least two weeks following the call.
About BancorpSouth, Inc.
BancorpSouth, Inc. (NYSE: BXS) is a financial holding company headquartered in Tupelo, Mississippi, with $14.1 billion in assets. BancorpSouth Bank, a wholly-owned subsidiary of BancorpSouth, Inc., operates 238 full service branch locations as well as additional mortgage, insurance, and loan production offices in Alabama, Arkansas, Florida, Louisiana, Mississippi, Missouri, Tennessee and Texas, including an insurance location in Illinois. BancorpSouth is committed to a culture of respect, diversity, and inclusion in both its workplace and communities. To learn more, visit our Community Commitment page at www.bancorpsouth.com. Like us on Facebook; follow us on Twitter: @MyBXS; or connect with us through LinkedIn.
Forward-Looking Statements
Certain statements contained in this news release may not be based upon historical facts and are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements may be identified by their reference to a future period or periods or by the use of forward-looking terminology such as "anticipate," "believe," "could," "estimate," "expect," "foresee," "hope," "intend," "may," "might," "plan," "will," or "would" or future or conditional verb tenses and variations or negatives of such terms. These forward-looking statements include, without limitation, those relating to the terms, timing and closings of the proposed mergers with Ouachita Bancshares Corp. and Central Community Corporation, the Company's ability to operate its regulatory compliance programs consistent with federal, state and local laws, including its Bank Secrecy Act ("BSA") and anti-money laundering ("AML") compliance program and its fair lending compliance program, the Company's compliance with the consent order it entered into with the Consumer Financial Protection Bureau (the "CFPB") and the United States Department of Justice ("DOJ") related to the Company's fair lending practices (the "Consent Order"), the acceptance by customers of Ouachita Bancshares Corp. and Central Community Corporation of the Company's products and services if the proposed mergers close, the outcome of any instituted, pending or threatened material litigation, amortization expense for intangible assets, goodwill impairments, loan impairment, utilization of appraisals and inspections for real estate loans, maturity, renewal or extension of construction, acquisition and development loans, net interest revenue, fair value determinations, the amount of the Company's non-performing loans and leases, additions to OREO, credit quality, credit losses, liquidity, off-balance sheet commitments and arrangements, valuation of mortgage servicing rights, allowance and provision for credit losses, continued weakness in the economic environment, early identification and resolution of credit issues, utilization of non-GAAP financial measures, the ability of the Company to collect all amounts due according to the contractual terms of loan agreements, the Company's reserve for losses from representation and warranty obligations, the Company's foreclosure process related to mortgage loans, the resolution of non-performing loans that are collaterally dependent, real estate values, fully-indexed interest rates, interest rate risk, interest rate sensitivity, calculation of economic value of equity, impaired loan charge-offs, troubled debt restructurings, diversification of the Company's revenue stream, liquidity needs and strategies, sources of funding, net interest margin, declaration and payment of dividends, cost saving initiatives, improvement in the Company's efficiencies, operating expense trends, future acquisitions and consideration to be used therefor, and the impact of certain claims and ongoing, pending or threatened litigation, administrative and investigatory matters.
The Company cautions readers not to place undue reliance on the forward-looking statements contained in this news release, in that actual results could differ materially from those indicated in such forward-looking statements as a result of a variety of factors. These factors may include, but are not limited to, the Company's ability to operate its regulatory compliance programs consistent with federal, state and local laws, including its BSA/AML compliance program and its fair lending compliance program, the Company's ability to successfully implement and comply with the Consent Order, the ability of the Company, Ouachita Bancshares Corp. and Central Community Corporation to obtain regulatory approval of and close the proposed mergers, the willingness of Ouachita Bancshares Corp. and Central Community Corporation to proceed with the proposed mergers, which they are no longer contractually obligated to complete, the potential impact upon the Company of the delay in the closings of these proposed mergers, the impact of any ongoing, pending or threatened litigation, administrative and investigatory matters involving the Company, conditions in the financial markets and economic conditions generally, the adequacy of the Company's provision and allowance for credit losses to cover actual credit losses, the credit risk associated with real estate construction, acquisition and development loans, losses resulting from the significant amount of the Company's OREO, limitations on the Company's ability to declare and pay dividends, the availability of capital on favorable terms if and when needed, liquidity risk, governmental regulation, including the Dodd-Frank Act, and supervision of the Company's operations, the short-term and long-term impact of changes to banking capital standards on the Company's regulatory capital and liquidity, the impact of regulations on service charges on the Company's core deposit accounts, the susceptibility of the Company's business to local economic and environmental conditions, the soundness of other financial institutions, changes in interest rates, the impact of monetary policies and economic factors on the Company's ability to attract deposits or make loans, volatility in capital and credit markets, reputational risk, the impact of the loss of any key Company personnel, the impact of hurricanes or other adverse weather events, any requirement that the Company write down goodwill or other intangible assets, diversification in the types of financial services the Company offers, the Company's ability to adapt its products and services to evolving industry standards and consumer preferences, competition with other financial services companies, risks in connection with completed or potential acquisitions, the Company's growth strategy, interruptions or breaches in the Company's information system security, the failure of certain third-party vendors to perform, unfavorable ratings by rating agencies, dilution caused by the Company's issuance of any additional shares of its common stock to raise capital or acquire other banks, bank holding companies, financial holding companies and insurance agencies, other factors generally understood to affect the assets, business, cash flows, financial condition, liquidity, prospects and/or results of operations of financial services companies and other factors detailed from time to time in the Company's press and news releases, reports and other filings with the SEC. Forward-looking statements speak only as of the date that they were made, and, except as required by law, the Company does not undertake any obligation to update or revise forward-looking statements to reflect events or circumstances that occur after the date of this news release.
BancorpSouth, Inc.
Selected Financial Information
(Dollars in thousands, except per share data)
(Unaudited)
Quarter Ended Quarter Ended Quarter Ended Quarter Ended Quarter Ended
6/30/2016 3/31/2016 12/31/2015 9/30/2015 6/30/2015
--------- --------- ---------- --------- ---------
Earnings Summary:
Interest revenue $119,423 $117,972 $118,050 $118,201 $114,630
Interest expense 7,107 6,813 6,820 7,131 7,321
----- ----- ----- ----- -----
Net interest revenue 112,316 111,159 111,230 111,070 107,309
Provision for credit losses 2,000 1,000 - (3,000) (5,000)
----- ----- --- ------ ------
Net interest revenue, after provision
for credit losses 110,316 110,159 111,230 114,070 112,309
Noninterest revenue 69,683 65,515 67,386 62,953 74,314
Noninterest expense 128,718 142,300 148,351 126,450 128,177
------- ------- ------- ------- -------
Income before income taxes 51,281 33,374 30,265 50,573 58,446
Income tax expense 16,589 10,825 9,096 16,230 18,733
------ ------ ----- ------ ------
Net income $34,692 $22,549 $21,169 $34,343 $39,713
======= ======= ======= ======= =======
Balance Sheet - Period End Balances
Total assets $14,137,160 $13,926,398 $13,798,662 $13,787,424 $13,634,931
Total earning assets 12,977,030 12,760,031 12,656,791 12,663,944 12,492,532
Total securities 2,103,883 2,016,373 2,082,329 2,161,125 2,251,153
Loans and leases, net of unearned income 10,575,978 10,444,697 10,372,778 10,219,576 10,007,571
Allowance for credit losses 126,935 126,506 126,458 133,009 138,312
Total deposits 11,364,367 11,486,697 11,331,161 11,141,946 11,134,961
Long-term debt 365,588 67,681 69,775 71,868 73,962
Total shareholders' equity 1,713,043 1,679,793 1,655,444 1,644,820 1,680,196
Balance Sheet - Average Balances
Total assets $14,027,786 $13,851,661 $13,724,595 $13,632,581 $13,516,546
Total earning assets 12,963,056 12,830,000 12,628,685 12,548,967 12,443,960
Total securities 2,069,058 2,037,739 2,110,195 2,207,935 2,211,931
Loans and leases, net of unearned income 10,513,732 10,372,925 10,321,299 10,110,995 9,868,318
Total deposits 11,437,422 11,431,480 11,182,750 11,140,542 11,148,246
Long-term debt 219,434 67,750 69,775 71,868 73,962
Total shareholders' equity 1,690,906 1,668,465 1,650,924 1,680,123 1,659,991
Nonperforming Assets:
Non-accrual loans and leases $68,638 $81,926 $83,028 $70,237 $67,766
Loans and leases 90+ days past due, still accruing 1,875 4,567 2,013 1,436 1,568
Restructured loans and leases, still accruing 9,687 7,753 9,876 18,578 10,109
Non-performing loans (NPLs) 80,200 94,246 94,917 90,251 79,443
------ ------ ------ ------ ------
Other real estate owned 14,658 12,685 14,759 23,696 24,299
------ ------ ------ ------ ------
Non-performing assets (NPAs) $94,858 $106,931 $109,676 $113,947 $103,742
======= ======== ======== ======== ========
Financial Ratios and Other Data:
Return on average assets 0.99% 0.65% 0.61% 1.00% 1.18%
Operating return on average assets-excluding MSR* 1.07% 1.07% 0.86% 1.09% 1.10%
Return on average shareholders' equity 8.25% 5.44% 5.09% 8.11% 9.60%
Operating return on average shareholders' equity-excluding MSR* 8.84% 8.89% 7.12% 8.88% 8.94%
Return on tangible equity* 9.99% 6.63% 6.25% 10.23% 11.66%
Operating return on tangible equity-excluding MSR* 10.70% 10.84% 8.75% 11.21% 10.87%
Noninterest income to average assets 2.00% 1.90% 1.95% 1.83% 2.21%
Noninterest expense to average assets 3.69% 4.13% 4.29% 3.68% 3.80%
Net interest margin-fully taxable equivalent 3.56% 3.56% 3.58% 3.59% 3.54%
Net interest rate spread 3.47% 3.47% 3.48% 3.49% 3.44%
Efficiency ratio (tax equivalent)* 69.77% 79.39% 81.86% 71.56% 69.52%
Operating efficiency ratio-excluding MSR (tax equivalent)* 68.21% 68.66% 73.89% 69.45% 71.16%
Loan/deposit ratio 93.06% 90.93% 91.54% 91.72% 89.88%
Price to earnings multiple (avg) 19.07 17.33 18.17 16.98 18.80
Market value to book value 125.23% 119.81% 136.46% 135.80% 148.34%
Market value to book value (avg) 124.62% 116.78% 142.53% 140.68% 142.10%
Market value to tangible book value 153.53% 147.04% 168.15% 167.71% 182.42%
Market value to tangible book value (avg) 152.78% 143.33% 175.64% 173.74% 174.75%
Headcount FTE 4,028 3,966 3,970 3,903 3,935
*Denotes non-GAAP financial measure. Refer to related disclosure and reconciliation on pages 19 and 20.
BancorpSouth, Inc.
Selected Financial Information
(Dollars in thousands, except per share data)
(Unaudited)
Quarter Ended Quarter Ended Quarter Ended Quarter Ended Quarter Ended
6/30/2016 3/31/2016 12/31/2015 9/30/2015 6/30/2015
--------- --------- ---------- --------- ---------
Credit Quality Ratios:
Net (recoveries) charge-offs to average loans and leases (annualized) 0.06% 0.04% 0.25% 0.09% (0.27%)
Provision for credit losses to average loans and leases (annualized) 0.08% 0.04% 0.00% (0.12%) (0.20%)
Allowance for credit losses to net loans and leases 1.20% 1.21% 1.22% 1.30% 1.38%
Allowance for credit losses to non-performing loans and leases 158.27% 134.23% 133.23% 147.38% 174.10%
Allowance for credit losses to non-performing assets 133.82% 118.31% 115.30% 116.73% 133.32%
Non-performing loans and leases to net loans and leases 0.76% 0.90% 0.92% 0.88% 0.79%
Non-performing assets to net loans and leases 0.90% 1.02% 1.06% 1.11% 1.04%
Equity Ratios:
Total shareholders' equity to total assets 12.12% 12.06% 12.00% 11.93% 12.32%
Tangible shareholders' equity to tangible assets* 10.11% 10.05% 9.96% 9.88% 10.26%
Capital Adequacy:
Common Equity Tier 1 capital 12.17% 12.14% 12.07% 12.08% 12.60%
Tier 1 capital 12.37% 12.34% 12.27% 12.29% 12.81%
Total capital 13.45% 13.43% 13.37% 13.45% 14.04%
Tier 1 leverage capital 10.66% 10.61% 10.61% 10.56% 10.96%
Estimated for current quarter
Common Share Data:
Basic earnings per share $0.37 $0.24 $0.22 $0.36 $0.41
Diluted earnings per share 0.37 0.24 0.22 0.36 0.41
Operating earnings per share* 0.37 0.34 0.33 0.36 0.41
Operating earnings per share- excluding MSR* 0.39 0.39 0.31 0.39 0.39
Cash dividends per share 0.10 0.10 0.10 0.10 0.08
Book value per share 18.12 17.79 17.58 17.50 17.37
Tangible book value per share* 14.78 14.49 14.27 14.17 14.12
Market value per share (last) 22.69 21.31 23.99 23.77 25.76
Market value per share (high) 24.18 23.64 27.23 26.54 26.68
Market value per share (low) 20.19 18.69 22.44 22.09 22.83
Market value per share (avg) 22.58 20.77 25.06 24.62 24.68
Dividend payout ratio 22.58% 41.85% 44.46% 28.01% 18.25%
Total shares outstanding 94,546,091 94,438,626 94,162,728 93,969,994 96,755,530
Average shares outstanding - basic 94,461,025 94,369,211 94,111,408 96,202,871 96,625,794
Average shares outstanding - diluted 94,694,795 94,593,540 94,384,443 96,467,728 96,957,441
Yield/Rate:
(Taxable equivalent basis)
Loans, loans held for sale, and leases net of unearned income 4.20% 4.21% 4.15% 4.22% 4.23%
Available-for-sale securities:
Taxable 1.40% 1.40% 1.48% 1.40% 1.40%
Tax-exempt 5.36% 5.36% 5.32% 5.32% 5.44%
Short-term investments 0.39% 0.33% 0.22% 0.20% 0.24%
Total interest earning assets and revenue 3.78% 3.78% 3.79% 3.82% 3.78%
Deposits 0.21% 0.21% 0.21% 0.22% 0.23%
Demand - interest bearing 0.18% 0.17% 0.18% 0.18% 0.19%
Savings 0.12% 0.12% 0.12% 0.12% 0.12%
Other time 0.75% 0.73% 0.71% 0.76% 0.79%
Short-term borrowings 0.15% 0.14% 0.12% 0.12% 0.11%
Total interest bearing deposits & short-term borrowings 0.29% 0.28% 0.28% 0.30% 0.31%
Junior subordinated debt 3.23% 3.18% 2.93% 2.87% 2.86%
Long-term debt 1.21% 3.08% 2.95% 2.91% 2.90%
Total interest bearing liabilities and expense 0.32% 0.31% 0.31% 0.32% 0.34%
Interest bearing liabilities to interest earning assets 69.47% 69.75% 69.23% 69.68% 70.36%
Net interest tax equivalent adjustment $2,493 $2,558 $2,601 $2,558 $2,628
*Denotes non-GAAP financial measure. Refer to related disclosure and reconciliation on pages 19 and 20.
BancorpSouth, Inc.
Consolidated Balance Sheets
(Unaudited)
Jun-16 Mar-16 Dec-15 Sep-15 Jun-15
------ ------ ------ ------ ------
(Dollars in thousands)
Assets
------
Cash and due from banks $186,381 $197,538 $154,192 $159,923 $183,541
Interest bearing deposits with other banks 86,472 148,915 43,777 113,068 34,438
Available-for-sale securities, at fair value 2,103,883 2,016,373 2,082,329 2,161,125 2,251,153
Loans and leases 10,604,547 10,475,528 10,404,326 10,254,013 10,041,455
Less: Unearned income 28,569 30,831 31,548 34,437 33,884
Allowance for credit losses 126,935 126,506 126,458 133,009 138,312
Net loans and leases 10,449,043 10,318,191 10,246,320 10,086,567 9,869,259
Loans held for sale 210,698 150,046 157,907 170,175 199,370
Premises and equipment, net 305,694 306,765 308,125 304,317 303,837
Accrued interest receivable 39,645 41,401 40,901 41,599 41,065
Goodwill 294,901 291,498 291,498 291,498 291,498
Other identifiable intangibles 20,831 19,664 20,545 21,466 22,415
Bank owned life insurance 255,240 253,427 251,534 249,825 247,983
Other real estate owned 14,658 12,685 14,759 23,696 24,299
Other assets 169,714 169,895 186,775 164,165 166,073
Total Assets $14,137,160 $13,926,398 $13,798,662 $13,787,424 $13,634,931
=========== =========== =========== =========== ===========
Liabilities
-----------
Deposits:
Demand: Noninterest bearing $3,133,460 $3,103,321 $3,031,528 $3,053,439 $2,911,972
Interest bearing 4,838,704 5,033,565 5,003,806 4,794,656 4,881,469
Savings 1,512,694 1,506,942 1,442,336 1,409,856 1,407,616
Other time 1,879,509 1,842,869 1,853,491 1,883,995 1,933,904
Total deposits 11,364,367 11,486,697 11,331,161 11,141,946 11,134,961
Federal funds purchased and
securities sold under agreement
to repurchase 415,949 431,089 405,937 425,203 375,980
Short-term Federal Home Loan Bank borrowings
and other short-term borrowing - - 62,000 224,500 92,500
Accrued interest payable 3,727 3,305 3,071 3,353 3,494
Junior subordinated debt securities 23,198 23,198 23,198 23,198 23,198
Long-term debt 365,588 67,681 69,775 71,868 73,962
Other liabilities 251,288 234,635 248,076 252,536 250,640
Total Liabilities 12,424,117 12,246,605 12,143,218 12,142,604 11,954,735
Shareholders' Equity
--------------------
Common stock 236,365 236,097 235,407 234,925 241,889
Capital surplus 286,994 283,800 282,934 278,998 337,272
Accumulated other comprehensive loss (27,587) (32,144) (41,825) (36,355) (41,288)
Retained earnings 1,217,271 1,192,040 1,178,928 1,167,252 1,142,323
Total Shareholders' Equity 1,713,043 1,679,793 1,655,444 1,644,820 1,680,196
Total Liabilities & Shareholders' Equity $14,137,160 $13,926,398 $13,798,662 $13,787,424 $13,634,931
=========== =========== =========== =========== ===========
BancorpSouth, Inc.
Consolidated Average Balance Sheets
(Unaudited)
Jun-16 Mar-16 Dec-15 Sep-15 Jun-15
------ ------ ------ ------ ------
(Dollars in thousands)
Assets
------
Cash and due from banks $117,193 $71,528 $159,696 $159,569 $152,792
Interest bearing deposits with other banks 237,635 316,108 69,552 72,438 212,634
Available-for-sale securities, at fair value 2,069,058 2,037,739 2,110,195 2,207,935 2,211,931
Loans and leases 10,543,795 10,405,063 10,353,913 10,144,874 9,903,034
Less: Unearned income 30,063 32,138 32,614 33,879 34,716
Allowance for credit losses 126,103 126,567 132,375 137,547 140,483
Net loans and leases 10,387,629 10,246,358 10,188,924 9,973,448 9,727,835
Loans held for sale 142,632 103,227 127,638 157,598 151,077
Premises and equipment, net 307,600 308,065 306,881 304,948 305,335
Accrued interest receivable 36,887 38,306 38,142 38,847 38,268
Goodwill 292,620 291,498 291,498 291,498 291,498
Other identifiable intangibles 19,796 19,987 20,880 21,812 22,780
Bank owned life insurance 254,191 252,422 250,577 248,798 246,872
Other real estate owned 15,666 14,523 21,049 24,008 27,190
Other assets 146,879 151,900 139,563 131,682 128,334
Total Assets $14,027,786 $13,851,661 $13,724,595 $13,632,581 $13,516,546
=========== =========== =========== =========== ===========
Liabilities
-----------
Deposits:
Demand: Noninterest bearing $3,122,153 $3,014,896 $3,106,947 $2,992,903 $2,895,451
Interest bearing 4,957,827 5,102,648 4,782,234 4,822,567 4,899,467
Savings 1,510,250 1,468,262 1,421,361 1,413,187 1,404,336
Other time 1,847,192 1,845,674 1,872,208 1,911,885 1,948,992
Total deposits 11,437,422 11,431,480 11,182,750 11,140,542 11,148,246
Federal funds purchased and
securities sold under agreement
to repurchase 443,340 431,260 466,865 439,503 399,447
Short-term Federal Home Loan Bank borrowings
and other short-term borrowing 4,275 10,484 107,408 62,136 6,555
Accrued interest payable 3,509 3,248 3,340 3,600 3,457
Junior subordinated debt securities 23,198 23,198 23,198 23,198 23,198
Long-term debt 219,434 67,750 69,775 71,868 73,962
Other liabilities 205,702 215,776 220,335 211,611 201,690
Total Liabilities 12,336,880 12,183,196 12,073,671 11,952,458 11,856,555
Shareholders' Equity
--------------------
Common stock 236,176 235,946 235,227 240,473 241,540
Capital surplus 284,818 282,796 282,076 325,118 332,993
Accumulated other comprehensive loss (32,820) (36,184) (38,618) (40,476) (38,534)
Retained earnings 1,202,732 1,185,907 1,172,239 1,155,008 1,123,992
Total Shareholders' Equity 1,690,906 1,668,465 1,650,924 1,680,123 1,659,991
Total Liabilities & Shareholders' Equity $14,027,786 $13,851,661 $13,724,595 $13,632,581 $13,516,546
=========== =========== =========== =========== ===========
BancorpSouth, Inc.
Consolidated Condensed Statements of Income
(Dollars in thousands, except per share data)
(Unaudited)
Quarter Ended YTD
------------- ---
Jun-16 Mar-16 Dec-15 Sep-15 Jun-15 Jun-16 Jun-15
------ ------ ------ ------ ------ ------ ------
INTEREST REVENUE:
Loans and leases $109,078 $107,805 $107,164 $107,086 $103,428 $216,883 $205,563
Deposits with other banks 229 263 40 36 126 492 362
Available-for-sale securities:
Taxable 6,009 5,888 6,550 6,490 6,424 11,897 13,268
Tax-exempt 2,924 3,032 3,137 3,226 3,335 5,956 6,712
Loans held for sale 1,183 984 1,159 1,363 1,317 2,167 2,222
----- --- ----- ----- ----- ----- -----
Total interest revenue 119,423 117,972 118,050 118,201 114,630 237,395 228,127
------- ------- ------- ------- ------- ------- -------
INTEREST EXPENSE:
Interest bearing demand 2,208 2,163 2,166 2,209 2,262 4,371 4,445
Savings 451 443 434 431 426 894 838
Other time 3,436 3,354 3,356 3,646 3,827 6,790 7,835
Federal funds purchased and securities sold
under agreement to repurchase 159 140 112 104 85 299 167
Long-term debt 665 530 581 571 556 1,195 1,133
Junior subordinated debt 187 183 171 168 165 370 328
Other 1 - - 2 - 1 (1)
--- --- --- --- --- --- ---
Total interest expense 7,107 6,813 6,820 7,131 7,321 13,920 14,745
----- ----- ----- ----- ----- ------ ------
Net interest revenue 112,316 111,159 111,230 111,070 107,309 223,475 213,382
Provision for credit losses 2,000 1,000 - (3,000) (5,000) 3,000 (10,000)
----- ----- --- ------ ------ ----- -------
Net interest revenue, after provision for
credit losses 110,316 110,159 111,230 114,070 112,309 220,475 223,382
------- ------- ------- ------- ------- ------- -------
NONINTEREST REVENUE:
Mortgage banking 9,043 2,618 10,522 2,339 14,102 11,661 22,669
Credit card, debit card and merchant fees 9,495 8,961 9,414 9,282 9,298 18,456 17,837
Deposit service charges 11,018 11,014 11,836 12,150 11,527 22,032 22,779
Security gains, net 86 2 48 33 41 88 55
Insurance commissions 28,803 33,249 25,348 28,584 29,319 62,052 62,812
Wealth Management 5,347 5,109 5,375 5,567 5,508 10,456 11,718
Other 5,891 4,562 4,843 4,998 4,519 10,453 9,759
----- ----- ----- ----- ----- ------ -----
Total noninterest revenue 69,683 65,515 67,386 62,953 74,314 135,198 147,629
------ ------ ------ ------ ------ ------- -------
NONINTEREST EXPENSE:
Salaries and employee benefits 81,832 82,467 80,177 81,354 79,759 164,299 160,938
Occupancy, net of rental income 10,109 10,273 10,434 10,819 10,419 20,382 20,613
Equipment 3,295 3,765 3,569 3,742 4,024 7,060 7,998
Deposit insurance assessments 2,582 2,288 2,630 2,191 2,377 4,870 4,688
Regulatory settlement - 10,277 - - - 10,277 -
Other 30,900 33,230 51,541 28,344 31,598 64,130 70,873
------ ------ ------ ------ ------ ------ ------
Total noninterest expense 128,718 142,300 148,351 126,450 128,177 271,018 265,110
------- ------- ------- ------- ------- ------- -------
Income before income taxes 51,281 33,374 30,265 50,573 58,446 84,655 105,901
Income tax expense 16,589 10,825 9,096 16,230 18,733 27,414 33,922
------ ------ ----- ------ ------ ------ ------
Net income $34,692 $22,549 $21,169 $34,343 $39,713 $57,241 $71,979
======= ======= ======= ======= ======= ======= =======
Net income per share: Basic $0.37 $0.24 $0.22 $0.36 $0.41 $0.61 $0.75
===== ===== ===== ===== ===== ===== =====
Diluted $0.37 $0.24 $0.22 $0.36 $0.41 $0.60 $0.74
===== ===== ===== ===== ===== ===== =====
BancorpSouth, Inc.
Selected Loan Data
(Dollars in thousands)
(Unaudited)
Quarter Ended
-------------
Jun-16 Mar-16 Dec-15 Sep-15 Jun-15
------ ------ ------ ------ ------
LOAN AND LEASE PORTFOLIO:
Commercial and industrial $1,698,089 $1,716,477 $1,747,774 $1,710,497 $1,730,142
Real estate
Consumer mortgages 2,549,989 2,480,828 2,472,202 2,447,132 2,374,122
Home equity 614,686 605,228 589,752 573,566 558,460
Agricultural 251,566 239,422 259,360 252,381 239,884
Commercial and industrial-owner occupied 1,644,618 1,654,577 1,617,429 1,605,811 1,596,244
Construction, acquisition and development 1,021,218 966,362 945,045 900,875 860,407
Commercial real estate 2,254,653 2,233,742 2,188,048 2,141,398 2,081,394
Credit cards 108,101 106,714 112,165 109,576 110,552
All other 433,058 441,347 441,003 478,340 456,366
------- ------- ------- ------- -------
Total loans $10,575,978 $10,444,697 $10,372,778 $10,219,576 $10,007,571
----------- ----------- ----------- ----------- -----------
ALLOWANCE FOR CREDIT LOSSES:
Balance, beginning of period $126,506 $126,458 $133,009 $138,312 $136,660
Loans and leases charged-off:
Commercial and industrial (748) (140) (6,193) (2,010) (1,436)
Real estate
Consumer mortgages (477) (710) (1,146) (1,382) (575)
Home equity (224) (550) (147) (314) (245)
Agricultural (10) (11) (16) (9) -
Commercial and industrial-owner occupied (660) (154) (357) (645) (404)
Construction, acquisition and development (280) (226) (221) (203) (272)
Commercial real estate (870) (245) (122) (1,477) (1,117)
Credit cards (614) (720) (723) (706) (527)
All other (417) (487) (623) (628) (441)
Total loans charged-off (4,300) (3,243) (9,548) (7,374) (5,017)
------ ------ ------ ------ ------
Recoveries:
Commercial and industrial 339 212 354 897 282
Real estate
Consumer mortgages 499 455 596 461 1,024
Home equity 246 80 123 90 185
Agricultural 96 36 20 59 36
Commercial and industrial-owner occupied 101 125 307 1,831 146
Construction, acquisition and development 524 272 1,061 1,084 8,978
Commercial real estate 509 683 149 187 600
Credit cards 199 181 152 170 183
All other 216 247 235 292 235
Total recoveries 2,729 2,291 2,997 5,071 11,669
----- ----- ----- ----- ------
Net (charge-offs) recoveries (1,571) (952) (6,551) (2,303) 6,652
Provision charged to operating expense 2,000 1,000 - (3,000) (5,000)
Balance, end of period $126,935 $126,506 $126,458 $133,009 $138,312
-------- -------- -------- -------- --------
Average loans for period $10,513,732 $10,372,925 $10,321,299 $10,110,995 $9,868,318
=========== =========== =========== =========== ==========
Ratio:
Net (charge-offs) recoveries to average
loans (annualized) 0.06% 0.04% 0.25% 0.09% (0.27%)
==== ==== ==== ==== ======
BancorpSouth, Inc.
Selected Loan Data
(Dollars in thousands)
(Unaudited)
Quarter Ended
-------------
Jun-16 Mar-16 Dec-15 Sep-15 Jun-15
------ ------ ------ ------ ------
NON-PERFORMING ASSETS
NON-PERFORMING LOANS AND LEASES:
Nonaccrual Loans and Leases
Commercial and industrial $8,675 $10,248 $8,493 $15,697 $9,740
Real estate
Consumer mortgages 19,309 22,968 21,637 21,959 21,636
Home equity 2,734 3,564 4,021 3,664 3,550
Agricultural 1,107 932 921 484 259
Commercial and industrial-owner occupied 16,021 16,633 16,512 12,690 14,007
Construction, acquisition and development 6,086 7,720 9,130 4,240 5,411
Commercial real estate 14,197 19,417 21,741 10,730 12,397
Credit cards 159 188 188 215 157
All other 350 256 385 558 609
--- --- --- --- ---
Total nonaccrual loans and leases $68,638 $81,926 $83,028 $70,237 $67,766
------- ------- ------- ------- -------
Loans and Leases 90+ Days Past Due, Still Accruing: 1,875 4,567 2,013 1,436 1,568
Restructured Loans and Leases, Still Accruing 9,687 7,753 9,876 18,578 10,109
Total non-performing loans and leases 80,200 94,246 94,917 90,251 79,443
------ ------ ------ ------ ------
OTHER REAL ESTATE OWNED: 14,658 12,685 14,759 23,696 24,299
------ ------ ------ ------ ------
Total Non-performing Assets $94,858 $106,931 $109,676 $113,947 $103,742
======= ======== ======== ======== ========
Additions to Nonaccrual Loans and Leases During the Quarter $10,553 $15,933 $34,050 $22,271 $35,315
======= ======= ======= ======= =======
Loans and Leases 30-89 Days Past Due, Still Accruing:
Commercial and industrial $3,748 $3,758 $2,409 $4,985 $3,081
Real estate
Consumer mortgages 15,784 11,985 15,128 10,789 10,622
Home equity 2,842 2,414 2,456 1,455 2,527
Agricultural 367 240 303 393 116
Commercial and industrial-owner occupied 2,854 669 1,018 3,888 2,643
Construction, acquisition and development 1,137 1,489 1,070 1,218 1,120
Commercial real estate 3,776 1,831 830 798 1,651
Credit cards 677 569 677 788 529
All other 712 606 744 1,334 1,481
--- --- --- ----- -----
Total Loans and Leases 30-89 days past due, still accruing $31,897 $23,561 $24,635 $25,648 $23,770
======= ======= ======= ======= =======
Credit Quality Ratios:
Provision for credit losses to average loans and leases (annualized) 0.08% 0.04% 0.00% (0.12%) (0.20%)
Allowance for credit losses to net loans and leases 1.20% 1.21% 1.22% 1.30% 1.38%
Allowance for credit losses to non-performing loans and leases 158.27% 134.23% 133.23% 147.38% 174.10%
Allowance for credit losses to non-performing assets 133.82% 118.31% 115.30% 116.73% 133.32%
Non-performing loans and leases to net loans and leases 0.76% 0.90% 0.92% 0.88% 0.79%
Non-performing assets to net loans and leases 0.90% 1.02% 1.06% 1.11% 1.04%
BancorpSouth, Inc.
Selected Loan Data
(Dollars in thousands)
(Unaudited)
June 30, 2016
-------------
Special
Pass Mention Substandard Doubtful Loss Impaired Total
---- ------- ----------- -------- ---- -------- -----
LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE:
Commercial and industrial $1,654,279 $ - $36,866 $91 $384 $6,469 $1,698,089
Real estate
Consumer mortgages 2,482,105 298 66,614 14 - 958 2,549,989
Home equity 603,039 - 10,163 - - 1,484 614,686
Agricultural 242,721 - 8,085 - - 760 251,566
Commercial and industrial-owner occupied 1,585,978 516 45,682 375 - 12,067 1,644,618
Construction, acquisition and development 1,003,045 - 12,809 - - 5,364 1,021,218
Commercial real estate 2,202,501 - 38,867 151 - 13,134 2,254,653
Credit cards 108,101 - - - - - 108,101
All other 424,932 - 8,027 99 - - 433,058
Total loans $10,306,701 $814 $227,113 $730 $384 $40,236 $10,575,978
=========== ==== ======== ==== ==== ======= ===========
March 31, 2016
--------------
Special
Pass Mention Substandard Doubtful Loss Impaired Total
---- ------- ----------- -------- ---- -------- -----
LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE:
Commercial and industrial $1,672,249 $ - $35,633 $394 $ - $8,201 $1,716,477
Real estate
Consumer mortgages 2,407,869 - 69,215 11 - 3,733 2,480,828
Home equity 593,500 - 9,938 - - 1,790 605,228
Agricultural 229,935 - 8,632 - - 855 239,422
Commercial and industrial-owner occupied 1,595,424 - 47,293 - - 11,860 1,654,577
Construction, acquisition and development 944,533 - 15,908 - - 5,921 966,362
Commercial real estate 2,166,616 - 49,440 400 - 17,286 2,233,742
Credit cards 106,714 - - - - - 106,714
All other 436,409 - 4,838 100 - - 441,347
Total loans $10,153,249 $ - $240,897 $905 $ - $49,646 $10,444,697
=========== ================== ======== ==== ================== ======= ===========
BancorpSouth, Inc.
Geographical Information
(Dollars in thousands)
(Unaudited)
June 30, 2016
-------------
Alabama
and Florida
Panhandle Arkansas Louisiana Mississippi Missouri Tennessee Texas Other Total
--------- -------- --------- ----------- -------- --------- ----- ----- -----
LOAN AND LEASE PORTFOLIO:
Commercial and industrial $146,268 $198,348 $196,156 $680,183 $93,190 $117,291 $221,574 $45,079 $1,698,089
Real estate
Consumer mortgages 318,323 326,634 225,181 815,895 80,713 286,004 472,988 24,251 2,549,989
Home equity 93,400 43,484 67,923 226,158 23,427 145,122 13,701 1,471 614,686
Agricultural 7,684 79,186 27,600 67,078 3,571 13,942 52,505 - 251,566
Commercial and industrial-owner occupied 199,074 174,811 198,307 668,400 49,294 140,535 214,197 - 1,644,618
Construction, acquisition and development 121,768 102,732 55,618 322,841 22,212 148,243 247,804 - 1,021,218
Commercial real estate 346,711 359,930 227,451 613,773 198,254 176,006 330,778 1,750 2,254,653
Credit cards - - - - - - - 108,101 108,101
All other 71,387 47,848 29,070 172,686 4,189 34,789 53,328 19,761 433,058
Total loans $1,304,615 $1,332,973 $1,027,306 $3,567,014 $474,850 $1,061,932 $1,606,875 $200,413 $10,575,978
========== ========== ========== ========== ======== ========== ========== ======== ===========
NON-PERFORMING LOANS AND LEASES:
Commercial and industrial $124 $519 $2,933 $5,620 $ - $181 $1,547 $1,002 $11,926
Real estate
Consumer mortgages 731 3,037 2,003 6,532 1,117 695 1,541 6,239 21,895
Home equity 390 1,302 224 428 - 392 - 2 2,738
Agricultural - - - 1,192 - - - - 1,192
Commercial and industrial-owner occupied 1,842 2,099 1,794 9,107 1,808 47 630 - 17,327
Construction, acquisition and development 54 569 21 5,559 1,180 - 48 - 7,431
Commercial real estate 904 1,093 1,564 11,593 - - 160 - 15,314
Credit cards - - - - - - - 1,261 1,261
All other 99 688 70 184 - 37 - 38 1,116
--- --- --- --- --- --- --- ---
Total loans $4,144 $9,307 $8,609 $40,215 $4,105 $1,352 $3,926 $8,542 $80,200
====== ====== ====== ======= ====== ====== ====== ====== =======
NON-PERFORMING LOANS AND LEASES
AS A PERCENTAGE OF OUTSTANDING:
Commercial and industrial 0.08% 0.26% 1.50% 0.83% 0.00% 0.15% 0.70% 2.22% 0.70%
Real estate
Consumer mortgages 0.23% 0.93% 0.89% 0.80% 1.38% 0.24% 0.33% 25.73% 0.86%
Home equity 0.42% 2.99% 0.33% 0.19% 0.00% 0.27% 0.00% 0.14% 0.45%
Agricultural 0.00% 0.00% 0.00% 1.78% 0.00% 0.00% 0.00% N/A 0.47%
Commercial and industrial-owner occupied 0.93% 1.20% 0.90% 1.36% 3.67% 0.03% 0.29% N/A 1.05%
Construction, acquisition and development 0.04% 0.55% 0.04% 1.72% 5.31% 0.00% 0.02% N/A 0.73%
Commercial real estate 0.26% 0.30% 0.69% 1.89% 0.00% 0.00% 0.05% N/A 0.68%
Credit cards N/A N/A N/A N/A N/A N/A N/A 1.17% 1.17%
All other 0.14% 1.44% 0.24% 0.11% 0.00% 0.11% 0.00% 0.19% 0.26%
Total loans 0.32% 0.70% 0.84% 1.13% 0.86% 0.13% 0.24% 4.26% 0.76%
==== ==== ==== ==== ==== ==== ==== ==== ====
BancorpSouth, Inc.
Noninterest Revenue and Expense
(Dollars in thousands)
(Unaudited)
Quarter Ended YTD
------------- ---
Jun-16 Mar-16 Dec-15 Sep-15 Jun-15 Jun-16 Jun-15
------ ------ ------ ------ ------ ------ ------
NONINTEREST REVENUE:
Mortgage banking $9,043 $2,618 $10,522 $2,339 $14,102 $11,661 $22,669
Credit card, debit card and merchant
fees 9,495 8,961 9,414 9,282 9,298 18,456 17,837
Deposit service charges 11,018 11,014 11,836 12,150 11,527 22,032 22,779
Securities gains, net 86 2 48 33 41 88 55
Insurance commissions 28,803 33,249 25,348 28,584 29,319 62,052 62,812
Trust income 3,493 3,430 3,469 3,653 3,543 6,923 7,579
Annuity fees 465 477 449 539 470 942 1,028
Brokerage commissions and fees 1,389 1,202 1,457 1,375 1,495 2,591 3,111
Bank-owned life insurance 1,813 1,893 1,881 1,842 1,835 3,706 3,734
Other miscellaneous income 4,078 2,669 2,962 3,156 2,684 6,747 6,025
Total noninterest revenue $69,683 $65,515 $67,386 $62,953 $74,314 $135,198 $147,629
======= ======= ======= ======= ======= ======== ========
NONINTEREST EXPENSE:
Salaries and employee benefits $81,832 $82,467 $80,177 $81,354 $79,759 164,299 $160,938
Occupancy, net of rental income 10,109 10,273 10,434 10,819 10,419 20,382 20,613
Equipment 3,295 3,765 3,569 3,742 4,024 7,060 7,998
Deposit insurance assessments 2,582 2,288 2,630 2,191 2,377 4,870 4,688
Regulatory settlement - 10,277 - - - 10,277 -
Advertising 1,043 633 1,009 812 1,686 1,676 2,467
Foreclosed property expense 1,309 1,181 3,014 808 1,625 2,490 3,596
Telecommunications 1,259 1,295 1,322 1,267 1,323 2,554 2,637
Public relations 599 661 702 588 794 1,260 1,479
Data processing 6,685 6,391 6,092 6,156 5,898 13,076 11,900
Computer software 2,732 2,660 2,609 2,595 2,690 5,392 5,296
Amortization of intangibles 869 880 922 948 1,061 1,749 2,093
Legal 1,754 4,535 19,434 1,233 1,998 6,289 9,679
Merger expense 1 1 13 8 4 2 4
Postage and shipping 985 1,117 1,139 1,030 1,194 2,102 2,366
Other miscellaneous expense 13,664 13,876 15,285 12,899 13,325 27,540 29,356
Total noninterest expense $128,718 $142,300 $148,351 $126,450 $128,177 $271,018 $265,110
======== ======== ======== ======== ======== ======== ========
INSURANCE COMMISSIONS:
Property and casualty commissions $20,417 $19,877 $18,814 $21,155 $21,145 $40,294 $41,818
Life and health commissions 6,252 5,615 5,823 5,775 6,202 $11,867 11,614
Risk management income 592 623 672 709 637 $1,215 1,303
Other 1,542 7,134 39 945 1,335 $8,676 8,077
Total insurance commissions $28,803 $33,249 $25,348 $28,584 $29,319 $62,052 $62,812
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BancorpSouth, Inc.
Selected Additional Information
(Dollars in thousands)
(Unaudited)
Quarter Ended
-------------
Jun-16 Mar-16 Dec-15 Sep-15 Jun-15
------ ------ ------ ------ ------
MORTGAGE SERVICING RIGHTS:
Fair value, beginning of period $50,544 $57,268 $52,973 $55,924 $49,190
Additions to mortgage servicing rights:
Originations of servicing assets 3,723 2,612 3,065 4,231 4,344
Changes in fair value:
Due to payoffs/paydowns (2,066) (1,380) (1,633) (1,872) (1,930)
Due to change in valuation inputs or
assumptions used in the valuation model (4,092) (7,954) 2,865 (5,308) 4,321
Other changes in fair value (1) (2) (2) (2) (1)
Fair value, end of period $48,108 $50,544 $57,268 $52,973 $55,924
======= ======= ======= ======= =======
Production revenue:
Origination $10,523 $7,208 $4,909 $5,154 $7,395
Servicing 4,678 4,744 4,381 4,365 4,316
Payoffs/Paydowns (2,066) (1,380) (1,633) (1,872) (1,930)
------ ------ ------ ------ ------
Total production revenue 13,135 10,572 7,657 7,647 9,781
Market value adjustment (4,092) (7,954) 2,865 (5,308) 4,321
------ ------ ----- ------ -----
Total mortgage banking revenue $9,043 $2,618 $10,522 $2,339 $14,102
====== ====== ======= ====== =======
Mortgage loans serviced $6,156,258 $6,096,220 $6,011,236 $5,942,736 $5,802,407
MSR/mtg loans serviced 0.78% 0.83% 0.95% 0.89% 0.96%
AVAILABLE-FOR-SALE SECURITIES, at fair value
U.S. Government agencies $1,310,803 $1,196,167 $1,244,640 $1,255,717 $1,336,846
Government agency issued residential
mortgage-back securities 180,178 189,741 140,540 206,878 217,191
Government agency issued commercial
mortgage-back securities 193,475 207,908 260,693 229,922 224,450
Obligations of states and political subdivisions 399,391 408,537 417,499 451,600 458,322
Other 20,036 14,020 18,957 17,008 14,344
Total available-for-sale securities $2,103,883 $2,016,373 $2,082,329 $2,161,125 $2,251,153
========== ========== ========== ========== ==========
BancorpSouth, Inc.
Reconciliation of Non-GAAP Measures and Other Ratio Definitions
(Dollars in thousands, except per share amounts)
(Unaudited)
Management evaluates the Company's capital position and operating performance by utilizing certain financial measures not calculated in accordance with U.S. Generally Accepted Accounting Principles (GAAP), including net operating income, net operating income-excluding MSR,
tangible shareholders' equity to tangible assets, return on tangible equity, operating return on tangible equity-excluding MSR, operating return on average assets-excluding MSR, operating return on average shareholders' equity-excluding MSR, tangible book value per share,
operating earnings per share, operating earnings per share-excluding MSR, efficiency ratio (tax equivalent) and operating efficiency ratio-excluding MSR (tax equivalent). The Company has included these non-GAAP financial measures in this news release for the applicable
periods presented. Management believes that the presentation of these non-GAAP financial measures (i) provides important supplemental information that contributes to a proper understanding of the Company's capital position and operating performance, (ii) enables a more
complete understanding of factors and trends affecting the Company's business and (iii) allows investors to evaluate the Company's performance in a manner similar to management, the financial services industry, bank stock analysts and bank regulators. Reconciliations of these
non-GAAP financial measures to the most directly comparable GAAP financial measures are presented in the tables below. These non-GAAP financial measures should not be considered as substitutes for GAAP financial measures, and the Company strongly encourages investors to
review the GAAP financial measures included in this news release and not to place undue reliance upon any single financial measure. In addition, because non-GAAP financial measures are not standardized, it may not be possible to compare the non-GAAP financial measures
presented in this news release with other companies' non-GAAP financial measures having the same or similar names.
Reconciliation of Net Operating Income and Net Operating Income-Excluding MSR to Net Income:
Quarter ended
-------------
6/30/2016 3/31/2016 12/31/2015 9/30/2015 6/30/2015
--------- --------- ---------- --------- ---------
Net income $34,692 $22,549 $21,169 $34,343 $39,713
Plus: Merger expense, net of tax 1 1 8 5 3
Legal charge, net of tax - - 10,246 - -
Regulatory related charges, net of tax - 9,412 - - -
Less: Security gains, net of tax 53 2 30 20 26
Net operating income $34,640 $31,960 $31,393 $34,328 $39,690
======= ======= ======= ======= =======
Less: MSR market value adjustment, net of tax (2,537) (4,931) 1,776 (3,291) 2,679
Net operating income-excluding MSR $37,177 $36,891 $29,617 $37,619 $37,011
======= ======= ======= ======= =======
BancorpSouth, Inc.
Reconciliation of Non-GAAP Measures and Other 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
-------------
6/30/2016 3/31/2016 12/31/2015 9/30/2015 6/30/2015
--------- --------- ---------- --------- ---------
Tangible assets
Total assets $14,137,160 $13,926,398 $13,798,662 $13,787,424 $13,634,931
Less: Goodwill 294,901 291,498 291,498 291,498 291,498
Other identifiable intangible assets 20,831 19,664 20,545 21,466 22,415
Total tangible assets $13,821,428 $13,615,236 $13,486,619 $13,474,460 $13,321,018
Tangible shareholders' equity
Total shareholders' equity $1,713,043 $1,679,793 $1,655,444 $1,644,820 $1,680,196
Less: Goodwill 294,901 291,498 291,498 291,498 291,498
Other identifiable intangible assets 20,831 19,664 20,545 21,466 22,415
Total tangible shareholders' equity $1,397,311 $1,368,631 $1,343,401 $1,331,856 $1,366,283
Total average assets $14,027,786 $13,851,661 $13,724,595 $13,632,581 $13,516,546
Total common shares outstanding 94,546,091 94,438,626 94,162,728 93,969,994 96,755,530
Average shares outstanding-diluted 94,694,795 94,593,540 94,384,443 96,467,728 96,957,441
Tangible shareholders' equity to tangible assets (1) 10.11% 10.05% 9.96% 9.88% 10.26%
Return on tangible equity (2) 9.99% 6.63% 6.25% 10.23% 11.66%
Operating return on tangible equity-excluding MSR (3) 10.70% 10.84% 8.75% 11.21% 10.87%
Operating return on average assets-excluding MSR (4) 1.07% 1.07% 0.86% 1.09% 1.10%
Operating return on average shareholders' equity-excluding MSR (5) 8.84% 8.89% 7.12% 8.88% 8.94%
Tangible book value per share (6) $14.78 $14.49 $14.27 $14.17 $14.12
Operating earnings per share (7) $0.37 $0.34 $0.33 $0.36 $0.41
Operating earnings per share-excluding MSR (8) $0.39 $0.39 $0.31 $0.39 $0.39
(1) Tangible shareholders' equity to tangible assets is defined by the Company as total shareholders' equity less goodwill
and other identifiable intangible assets, divided by the difference of total assets less goodwill and other
identifiable intangible assets.
(2) Return on tangible equity is defined by the Company as annualized net income divided by tangible shareholders' equity.
(3) Operating return on tangible equity-excluding MSR is defined by the Company as annualized net operating income-
excluding MSR divided by tangible shareholders' equity.
(4) Operating return on average assets-excluding MSR is defined by the Company as annualized net operating income-
excluding MSR divided by total average assets.
(5) Operating return on average shareholders' equity-excluding MSR is defined by the Company as annualized net operating
income-excluding MSR divided by average shareholders' equity.
(6) Tangible book value per share is defined by the Company as tangible shareholders' equity divided by total common shares
outstanding.
(7) Operating earnings per share is defined by the Company as net operating income divided by average shares outstanding-
diluted.
(8) Operating earnings per share-excluding MSR is defined by the Company as net operating income-excluding MSR divided by
average shares outstanding-diluted.
Efficiency Ratio (tax equivalent) and Operating Efficiency Ratio-excluding MSR (tax equivalent) Definitions
The efficiency ratio (tax equivalent) and the operating efficiency ratio-excluding MSR (tax equivalent) are supplemental financial measures utilized in management's internal evaluation of the Company's use of resources and are not defined under GAAP. The efficiency ratio (tax equivalent) is calculated by
dividing total noninterest expense by total revenue, which includes net interest income plus noninterest income plus the tax equivalent adjustment. The operating efficiency ratio-excluding MSR (tax equivalent) excludes expense items otherwise disclosed as non-operating from total noninterest expense. In
addition, the MSR valuation adjustment as well as securities gains and losses are excluded from total revenue.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/bancorpsouth-announces-second-quarter-2016-financial-results-300301705.html
SOURCE BancorpSouth, Inc.
