BANCORPSOUTH, INC. TUPELO, Miss., Oct. 19, 2016 /PRNewswire/ -- BancorpSouth, Inc. (NYSE: BXS) today announced financial results for the quarter ended September 30, 2016.
Highlights for the third quarter of 2016 included:
-- Net income of $37.8 million, or $0.40 per diluted share.
-- Generated deposit growth of $225.7 million, or 7.9 percent on an
annualized basis, and net loan growth of $82.8 million, or 3.1 percent
on an annualized basis.
-- Earnings benefitted from a positive mortgage servicing rights ("MSR")
valuation adjustment of $1.8 million.
-- Net operating income - excluding MSR - of $36.7 million, or $0.39 per
diluted share.
-- Credit quality remained stable; no recorded provision for credit losses
for the quarter.
-- Total non-interest expense of $129.5 million essentially flat compared
to the second quarter; operating efficiency ratio - excluding MSR -
remained below 70 percent for the third consecutive quarter.
-- Repurchased 551,519 shares of outstanding common stock at a weighted
average price of $23.80.
-- On October 14, 2016, the Company announced an extension of its merger
agreements with Central Community Corporation and Ouachita Bancshares
Corp. until December 31, 2017.
The Company reported net income of $37.8 million, or $0.40 per diluted share, for the third quarter of 2016 compared with net income of $34.3 million, or $0.36 per diluted share, for the third quarter of 2015 and net income of $34.7 million, or $0.37 per diluted share, for the second quarter of 2016.
The Company reported net operating income - excluding MSR - of $36.7 million, or $0.39 per diluted share, for the third quarter of 2016 compared to $37.6 million, or $0.39 per diluted share, for the third quarter of 2015 and $37.2 million, or $0.39 per diluted share, for the second quarter of 2016.
"The recent merger agreement extensions with Central Community Corporation and Ouachita Bancshares Corp. were a positive step for our Company," remarked Dan Rollins, BancorpSouth Chairman and Chief Executive Officer. "While we are disappointed in the length of time taken to close these transactions, we are pleased with the continued commitment of these two organizations to being a part of our team.
"Our core financial results continue to improve quarter after quarter. We are extremely pleased with our front line efforts in producing deposit growth. We reported deposit growth of $225.7 million, or 7.9 percent annualized for the quarter. We have consistently communicated to our teammates the importance of leading our sales efforts with deposits. Our balance sheet growth contributed to meaningful growth in net interest income during the quarter. While we did see some slight compression in net interest margin, our loan yields and deposit costs were stable compared to the second quarter. The compression in the margin was driven primarily by balance sheet mix, as additional borrowings added to the balance sheet for liquidity purposes were deployed primarily in our securities portfolio.
"Otherwise, our story is very consistent with the last several quarters. Our mortgage team continues to grow and perform at a high level while our insurance team continues to battle pricing headwinds impacting the entire industry. There was no recorded provision for credit losses for the quarter as credit quality remains stable. Finally, total non-interest expense was essentially flat for the quarter, resulting in our efficiency ratio remaining below 70 percent."
Net Interest Revenue
Net interest revenue was $114.6 million for the third quarter of 2016, an increase of 3.2 percent from $111.1 million for the third quarter of 2015 and an increase of 2.0 percent from $112.3 million for the second quarter of 2016. The fully taxable equivalent net interest margin was 3.51 percent for the third quarter of 2016 compared to 3.59 percent for the third quarter of 2015 and 3.56 percent for the second quarter of 2016. Yields on loans and leases were 4.20 percent for the third quarter of 2016 compared with 4.22 percent for the third quarter of 2015 and 4.20 percent for the second quarter of 2016, while yields on total interest earning assets were 3.74 percent for the third quarter of 2016 compared with 3.82 percent for the third quarter of 2015 and 3.78 percent for the second quarter of 2016. The average cost of deposits was 0.22 percent for the third quarter of 2016 compared to 0.22 percent for the third quarter of 2015 and 0.21 percent for the second quarter of 2016.
Asset, Deposit and Loan Activity
Total assets were $14.6 billion at September 30, 2016 compared with $13.8 billion at September 30, 2015. Loans and leases, net of unearned income, were $10.7 billion at September 30, 2016 compared with $10.2 billion at September 30, 2015.
Total deposits were $11.6 billion at September 30, 2016 compared with $11.1 billion at September 30, 2015. Time deposits were essentially flat at September 30, 2016 compared to September 30, 2015, declining $13.2 million, or 0.7 percent. Over the same time period, interest bearing demand deposits increased $82.8 million or 1.7 percent while noninterest bearing demand deposits increased $254.9 million, or 8.4 percent and savings deposits increased $123.5 million, or 8.8 percent.
Provision for Credit Losses and Allowance for Credit Losses
Earnings for the quarter reflect no recorded provision for credit losses, compared to a negative provision of $3.0 million for the third quarter of 2015 and a provision of $2.0 million for the second quarter of 2016. Total non-performing assets ("NPAs") were $102.3 million, or 0.96 percent of net loans and leases, at September 30, 2016 compared with $113.9 million, or 1.11 percent of net loans and leases, at September 30, 2015, and $94.9 million, or 0.90 percent of net loans and leases, at June 30, 2016.
Net charge-offs for the third quarter of 2016 were $1.0 million, compared with net charge-offs of $2.3 million for the third quarter of 2015 and net charge-offs of $1.6 million for the second quarter of 2016. Gross charge-offs were $3.8 million for the third quarter of 2016, compared with $7.4 million for the third quarter of 2015 and $4.3 million for the second quarter of 2016. Gross recoveries of previously charged-off loans were $2.7 million for the third quarter of 2016, compared with $5.1 million for the third quarter of 2015 and $2.7 million for the second quarter of 2016. Annualized net charge-offs were 0.04 percent of average loans and leases for the third quarter of 2016, compared with annualized net charge-offs of 0.09 percent for the third quarter of 2015 and annualized net charge-offs of 0.06 percent for the second quarter of 2016.
Non-performing loans ("NPLs") were $90.9 million, or 0.85 percent of net loans and leases, at September 30, 2016, compared with $90.3 million, or 0.88 percent of net loans and leases, at September 30, 2015, and $80.2 million, or 0.76 percent of net loans and leases, at June 30, 2016. The allowance for credit losses was $125.9 million, or 1.18 percent of net loans and leases, at September 30, 2016, compared with $133.0 million, or 1.30 percent of net loans and leases, at September 30, 2015 and $126.9 million, or 1.20 percent of net loans and leases, at June 30, 2016.
NPLs at September 30, 2016 consisted primarily of $70.7 million of nonaccrual loans, compared with $68.6 million of nonaccrual loans at June 30, 2016. NPLs at September 30, 2016 also included $2.3 million of loans 90 days or more past due and still accruing, compared with $1.9 million of such loans at June 30, 2016, and included restructured loans still accruing of $17.9 million at September 30, 2016, compared with $9.7 million of such loans at June 30, 2016. Early stage past due loans, representing loans 30-89 days past due, totaled $46.7 million at September 30, 2016 compared to $31.9 million at June 30, 2016. Other real estate owned decreased $3.3 million to $11.4 million during the third quarter of 2016 from $14.7 million at June 30, 2016.
Noninterest Revenue
Noninterest revenue was $70.9 million for the third quarter of 2016, compared with $63.0 million for the third quarter of 2015 and $69.7 million for the second quarter of 2016. These results included a positive MSR valuation adjustment of $1.8 million for the third quarter of 2016 compared with a negative MSR valuation adjustment of $5.3 million for the third quarter of 2015 and a negative MSR valuation adjustment of $4.1 million for the second 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 $10.5 million for the third quarter of 2016, compared with $7.6 million for the third quarter of 2015 and $13.1 million for the second quarter of 2016. Mortgage origination volume for the third quarter of 2016 was $478.2 million, compared with $402.2 million for the third quarter of 2015 and $462.6 million for the second quarter of 2016.
Credit and debit card fee revenue was $9.3 million for the third quarter of 2016, compared with $9.3 million for the third quarter of 2015 and $9.5 million for the second quarter of 2016. Deposit service charge revenue was $11.3 million for the third quarter of 2016, compared with $12.2 million for the third quarter of 2015 and $11.0 million for the second quarter of 2016. Insurance commission revenue was $28.2 million for the third quarter of 2016, compared with $28.6 million for the third quarter of 2015 and $28.8 million for the second quarter of 2016. Wealth management revenue was $5.3 million for the third quarter of 2016, compared with $5.6 million for the third quarter of 2015 and $5.3 million for the second quarter of 2016.
Noninterest Expense
Noninterest expense for the third quarter of 2016 was $129.5 million, compared with $126.5 million for the third quarter of 2015 and $128.7 million for the second quarter of 2016. Salaries and employee benefits expense was $82.1 million for the third quarter of 2016 compared to $81.4 million for the third quarter of 2015 and $81.8 million for the second quarter of 2016. Occupancy expense was $10.4 million for the third quarter of 2016, compared with $10.8 million for the third quarter of 2015 and $10.1 million for the second quarter of 2016. Other noninterest expense was $30.4 million for the third quarter of 2016, compared to $28.3 million for the third quarter of 2015 and $30.9 million for the second quarter of 2016.
Capital Management
The Company's equity capitalization is comprised entirely of common stock. BancorpSouth's ratio of shareholders' equity to assets was 11.80 percent at September 30, 2016, compared with 11.93 percent at September 30, 2015 and 12.12 percent at June 30, 2016. The ratio of tangible shareholders' equity to tangible assets was 9.86 percent at September 30, 2016, compared with 9.88 percent at September 30, 2015 and 10.11 percent at June 30, 2016.
Estimated regulatory capital ratios at September 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 12.32 percent at September 30, 2016 and total risk based capital of 13.37 percent, compared with required minimum levels of 8 percent and 10 percent, respectively, in order to qualify 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. agreed to be merged with and into the Company. OIB operates 11 full-service banking offices along the I-20 corridor and has a loan production office in Madison, Mississippi. As of September 30, 2016, OIB, on a consolidated basis, reported total assets of $688.1 million, total loans of $494.8 million and total deposits of $574.7 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 Ouachita Bancshares Corp. shareholders on April 8, 2014. The most recent previous extension of the merger agreement expired on December 31, 2015; however, the Company and Ouachita Bancshares Corp. entered into a new extension effective on October 13, 2016, extending the merger agreement through December 31, 2017 to allow for additional time to obtain the necessary regulatory approvals and to satisfy all closing conditions. The merger agreement remains in effect until terminated by the Board of Directors of the Company or Ouachita Bancshares Corp. The terms of the agreement provide for a minimum total deal value of $111.1 million but also allow Ouachita Bancshares Corp. to terminate the agreement if the average closing price of the Company's common stock declines below a certain threshold prior to closing. The transaction is expected to close shortly after receiving all required regulatory approvals, although the Company can provide no assurance that the merger will close timely or at all.
On January 21, 2014, the Company announced the signing of a definitive merger agreement with Central Community Corporation, headquartered in Temple, Texas, pursuant to which Central Community Corporation agreed to be merged with and into the Company. Central Community Corporation is the parent company of First State Bank Central Texas ("First State Bank"), which is headquartered in Austin, Texas. First State Bank operates 31 full-service banking offices in central Texas. As of September 30, 2016, Central Community Corporation, on a consolidated basis, reported total assets of $1.4 billion, total loans of $619.3 million and total deposits of $1.1 billion. Under the terms of the definitive agreement, the Company will issue approximately 7,250,000 shares of the Company's common stock plus $28.5 million in cash for all outstanding shares of Central Community Corporation's capital stock, subject to certain conditions and potential adjustments. The merger has been unanimously approved by the Board of Directors of each company and was approved by Central Community Corporation shareholders on April 24, 2014. The most recent previous extension of the merger agreement expired on December 31, 2015; however, the Company and Central Community Corporation entered into a new extension effective on October 13, 2016, extending the merger agreement through December 31, 2017 to allow for additional time to obtain the necessary regulatory approvals and to satisfy all closing conditions. The merger agreement remains in effect until terminated by the Board of Directors of the Company or Central Community Corporation. The terms of the agreement provide for a minimum total deal value of $202.5 million but also allow Central Community Corporation to terminate the agreement if the average closing price of the Company's common stock declines below a certain threshold prior to closing. The transaction is expected to close shortly after receiving all required regulatory approvals, although the Company can provide no assurance that the merger will close timely or at all.
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 Form 8-K that was previously filed with the SEC on October 14, 2016.
Summary
Rollins concluded, "Our teammates have positioned our Company where I believe we can continue on the same path we have been on for several quarters. We are growing our Company while holding expenses relatively flat. This approach should allow us to continue to show improved operating metrics as we move forward. I'm also pleased that we were able to utilize our share repurchase program during the quarter. We are committed to continuing to manage and deploy capital in a manner that maximizes value for our shareholders. Finally, I'm happy that our merger partners, Ouachita Bancshares Corp. and Central Community Corporation, further demonstrated their commitment to our proposed mergers through the extension of the merger agreements until the end of next year. I'm hopeful that we can resolve remaining regulatory concerns in a timely manner and move forward with those transactions."
Conference Call
BancorpSouth will conduct a conference call to discuss its third quarter 2016 results on October 20, 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 $14.6 billion in assets. BancorpSouth Bank, a wholly-owned subsidiary of BancorpSouth, Inc., operates 236 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, credit quality, credit losses, liquidity, off-balance sheet commitments and arrangements, valuation of mortgage servicing rights, allowance and provision for credit losses, early identification and resolution of credit issues, utilization of non-GAAP financial measures, the ability of the Company to collect all amounts due according to the contractual terms of loan agreements, the Company's reserve for losses from representation and warranty obligations, the Company's foreclosure process related to mortgage loans, the resolution of non-performing loans that are collaterally dependent, real estate values, fully-indexed interest rates, interest rate risk, interest rate sensitivity, calculation of economic value of equity, impaired loan charge-offs, 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, the potential impact upon the Company of the delay in the closings of these proposed mergers, the impact of any ongoing, pending or threatened litigation, administrative and investigatory matters involving the Company, conditions in the financial markets and economic conditions generally, the adequacy of the Company's provision and allowance for credit losses to cover actual credit losses, the credit risk associated with real estate construction, acquisition and development loans, limitations on the Company's ability to declare and pay dividends, the availability of capital on favorable terms if and when needed, liquidity risk, governmental regulation, including the Dodd-Frank Act, and supervision of the Company's operations, the short-term and long-term impact of changes to banking capital standards on the Company's regulatory capital and liquidity, the impact of regulations on service charges on the Company's core deposit accounts, the susceptibility of the Company's business to local economic and environmental conditions, the soundness of other financial institutions, changes in interest rates, the impact of monetary policies and economic factors on the Company's ability to attract deposits or make loans, volatility in capital and credit markets, reputational risk, the impact of the loss of any key Company personnel, the impact of hurricanes or other adverse weather events, any requirement that the Company write down goodwill or other intangible assets, diversification in the types of financial services the Company offers, the 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
9/30/2016 6/30/2016 3/31/2016 12/31/2015 9/30/2015
--------- --------- --------- ---------- ---------
Earnings Summary:
Interest revenue $122,340 $119,423 $117,972 $118,050 $118,201
Interest expense 7,750 7,107 6,813 6,820 7,131
----- ----- ----- ----- -----
Net interest revenue 114,590 112,316 111,159 111,230 111,070
Provision for credit losses - 2,000 1,000 - (3,000)
--- ----- ----- --- ------
Net interest revenue, after provision
for credit losses 114,590 110,316 110,159 111,230 114,070
Noninterest revenue 70,868 69,683 65,515 67,386 62,953
Noninterest expense 129,512 128,718 142,300 148,351 126,450
------- ------- ------- ------- -------
Income before income taxes 55,946 51,281 33,374 30,265 50,573
Income tax expense 18,129 16,589 10,825 9,096 16,230
------ ------ ------ ----- ------
Net income $37,817 $34,692 $22,549 $21,169 $34,343
======= ======= ======= ======= =======
Balance Sheet - Period End Balances
Total assets $14,611,483 $14,137,160 $13,926,398 $13,798,662 $13,787,424
Total earning assets 13,483,345 12,977,030 12,760,031 12,656,791 12,663,944
Total securities 2,468,199 2,103,883 2,016,373 2,082,329 2,161,125
Loans and leases, net of unearned income 10,658,761 10,575,978 10,444,697 10,372,778 10,219,576
Allowance for credit losses 125,887 126,935 126,506 126,458 133,009
Total deposits 11,590,059 11,364,367 11,486,697 11,331,161 11,141,946
Long-term debt 563,495 365,588 67,681 69,775 71,868
Total shareholders' equity 1,724,104 1,713,043 1,679,793 1,655,444 1,644,820
Balance Sheet - Average Balances
Total assets $14,366,759 $14,027,786 $13,851,661 $13,724,595 $13,632,581
Total earning assets 13,265,266 12,963,056 12,830,000 12,628,685 12,548,967
Total securities 2,186,889 2,069,058 2,037,739 2,110,195 2,207,935
Loans and leases, net of unearned income 10,601,481 10,513,732 10,372,925 10,321,299 10,110,995
Total deposits 11,509,764 11,437,422 11,431,480 11,182,750 11,140,542
Long-term debt 430,886 219,434 67,750 69,775 71,868
Total shareholders' equity 1,719,503 1,690,906 1,668,465 1,650,924 1,680,123
Nonperforming Assets:
Non-accrual loans and leases $70,725 $68,638 $81,926 $83,028 $70,237
Loans and leases 90+ days past due, still accruing 2,255 1,875 4,567 2,013 1,436
Restructured loans and leases, still accruing 17,936 9,687 7,753 9,876 18,578
Non-performing loans (NPLs) 90,916 80,200 94,246 94,917 90,251
------ ------ ------ ------ ------
Other real estate owned 11,391 14,658 12,685 14,759 23,696
------ ------ ------ ------ ------
Non-performing assets (NPAs) $102,307 $94,858 $106,931 $109,676 $113,947
======== ======= ======== ======== ========
Financial Ratios and Other Data:
Return on average assets 1.05% 0.99% 0.65% 0.61% 1.00%
Operating return on average assets-excluding MSR* 1.02% 1.07% 1.07% 0.86% 1.09%
Return on average shareholders' equity 8.75% 8.25% 5.44% 5.09% 8.11%
Operating return on average shareholders' equity-excluding MSR* 8.49% 8.84% 8.89% 7.12% 8.88%
Return on tangible equity* 10.68% 9.99% 6.63% 6.25% 10.23%
Operating return on tangible equity-excluding MSR* 10.36% 10.70% 10.84% 8.75% 11.21%
Noninterest income to average assets 1.96% 2.00% 1.90% 1.95% 1.83%
Noninterest expense to average assets 3.59% 3.69% 4.13% 4.29% 3.68%
Net interest margin-fully taxable equivalent 3.51% 3.56% 3.56% 3.58% 3.59%
Net interest rate spread 3.41% 3.47% 3.47% 3.48% 3.49%
Efficiency ratio (tax equivalent)* 68.92% 69.77% 79.39% 81.86% 71.56%
Operating efficiency ratio-excluding MSR (tax equivalent)* 69.59% 68.21% 68.66% 73.89% 69.45%
Loan/deposit ratio 91.96% 93.06% 90.93% 91.54% 91.72%
Price to earnings multiple (avg) 18.86 19.07 17.33 18.17 16.98
Market value to book value 126.59% 125.23% 119.81% 136.46% 135.80%
Market value to book value (avg) 129.73% 124.62% 116.78% 142.53% 140.68%
Market value to tangible book value 154.87% 153.53% 147.04% 168.15% 167.71%
Market value to tangible book value (avg) 158.71% 152.78% 143.33% 175.64% 173.74%
Headcount FTE 3,981 4,028 3,966 3,970 3,903
*Denotes non-GAAP financial measure. Refer to related disclosure and reconciliation on pages 19 and 20.
Credit Quality Ratios:
Net (recoveries) charge-offs to average loans and leases (annualized) 0.04% 0.06% 0.04% 0.25% 0.09%
Provision for credit losses to average loans and leases (annualized) 0.00% 0.08% 0.04% 0.00% (0.12%)
Allowance for credit losses to net loans and leases 1.18% 1.20% 1.21% 1.22% 1.30%
Allowance for credit losses to non-performing loans and leases 138.47% 158.27% 134.23% 133.23% 147.38%
Allowance for credit losses to non-performing assets 123.05% 133.82% 118.31% 115.30% 116.73%
Non-performing loans and leases to net loans and leases 0.85% 0.76% 0.90% 0.92% 0.88%
Non-performing assets to net loans and leases 0.96% 0.90% 1.02% 1.06% 1.11%
Equity Ratios:
Total shareholders' equity to total assets 11.80% 12.12% 12.06% 12.00% 11.93%
Tangible shareholders' equity to tangible assets* 9.86% 10.11% 10.05% 9.96% 9.88%
Capital Adequacy:
Common Equity Tier 1 capital 12.13% 12.17% 12.14% 12.07% 12.08%
Tier 1 capital 12.32% 12.37% 12.34% 12.27% 12.29%
Total capital 13.37% 13.45% 13.43% 13.37% 13.45%
Tier 1 leverage capital 10.53% 10.66% 10.61% 10.61% 10.56%
Estimated for current quarter
Common Share Data:
Basic earnings per share $0.40 $0.37 $0.24 $0.22 $0.36
Diluted earnings per share 0.40 0.37 0.24 0.22 0.36
Operating earnings per share* 0.40 0.37 0.34 0.33 0.36
Operating earnings per share- excluding MSR* 0.39 0.39 0.39 0.31 0.39
Cash dividends per share 0.13 0.10 0.10 0.10 0.10
Book value per share 18.33 18.12 17.79 17.58 17.50
Tangible book value per share* 14.98 14.78 14.49 14.27 14.17
Market value per share (last) 23.20 22.69 21.31 23.99 23.77
Market value per share (high) 25.09 24.18 23.64 27.23 26.54
Market value per share (low) 20.98 20.19 18.69 22.44 22.09
Market value per share (avg) 23.78 22.58 20.77 25.06 24.62
Dividend payout ratio 31.17% 22.58% 41.85% 44.46% 28.01%
Total shares outstanding 94,074,740 94,546,091 94,438,626 94,162,728 93,969,994
Average shares outstanding - basic 94,303,916 94,461,025 94,369,211 94,111,408 96,202,871
Average shares outstanding - diluted 94,563,833 94,694,795 94,593,540 94,384,443 96,467,728
Yield/Rate:
(Taxable equivalent basis)
Loans, loans held for sale, and leases net of unearned income 4.20% 4.20% 4.21% 4.15% 4.22%
Available-for-sale securities:
Taxable 1.33% 1.40% 1.40% 1.48% 1.40%
Tax-exempt 5.32% 5.36% 5.36% 5.32% 5.32%
Short-term investments 0.52% 0.39% 0.33% 0.22% 0.20%
Total interest earning assets and revenue 3.74% 3.78% 3.78% 3.79% 3.82%
Deposits 0.22% 0.21% 0.21% 0.21% 0.22%
Demand - interest bearing 0.19% 0.18% 0.17% 0.18% 0.18%
Savings 0.12% 0.12% 0.12% 0.12% 0.12%
Other time 0.78% 0.75% 0.73% 0.71% 0.76%
Short-term borrowings 0.15% 0.15% 0.14% 0.12% 0.12%
Total interest bearing deposits & short-term borrowings 0.30% 0.29% 0.28% 0.28% 0.30%
Junior subordinated debt 3.27% 3.23% 3.18% 2.93% 2.87%
Long-term debt 0.83% 1.21% 3.08% 2.95% 2.91%
Total interest bearing liabilities and expense 0.34% 0.32% 0.31% 0.31% 0.32%
Interest bearing liabilities to interest earning assets 69.33% 69.47% 69.75% 69.23% 69.68%
Net interest tax equivalent adjustment $2,462 $2,493 $2,558 $2,601 $2,558
*Denotes non-GAAP financial measure. Refer to related disclosure and reconciliation on pages 19 and 20.
BancorpSouth, Inc.
Consolidated Balance Sheets
(Unaudited)
Sep-16 Jun-16 Mar-16 Dec-15 Sep-15
------ ------ ------ ------ ------
(Dollars in thousands)
Assets
------
Cash and due from banks $172,782 $186,381 $197,538 $154,192 $159,923
Interest bearing deposits with other banks 151,944 86,472 148,915 43,777 113,068
Available-for-sale securities, at fair value 2,468,199 2,103,883 2,016,373 2,082,329 2,161,125
Loans and leases 10,685,166 10,604,547 10,475,528 10,404,326 10,254,013
Less: Unearned income 26,405 28,569 30,831 31,548 34,437
Allowance for credit losses 125,887 126,935 126,506 126,458 133,009
Net loans and leases 10,532,874 10,449,043 10,318,191 10,246,320 10,086,567
Loans held for sale 204,441 210,698 150,046 157,907 170,175
Premises and equipment, net 305,245 305,694 306,765 308,125 304,317
Accrued interest receivable 41,583 39,645 41,401 40,901 41,599
Goodwill 294,901 294,901 291,498 291,498 291,498
Other identifiable intangibles 19,908 20,831 19,664 20,545 21,466
Bank owned life insurance 257,015 255,240 253,427 251,534 249,825
Other real estate owned 11,391 14,658 12,685 14,759 23,696
Other assets 151,200 169,714 169,895 186,775 164,165
Total Assets $14,611,483 $14,137,160 $13,926,398 $13,798,662 $13,787,424
=========== =========== =========== =========== ===========
Liabilities
-----------
Deposits:
Demand: Noninterest bearing $3,308,361 $3,133,460 $3,103,321 $3,031,528 $3,053,439
Interest bearing 4,877,482 4,838,704 5,033,565 5,003,806 4,794,656
Savings 1,533,401 1,512,694 1,506,942 1,442,336 1,409,856
Other time 1,870,815 1,879,509 1,842,869 1,853,491 1,883,995
Total deposits 11,590,059 11,364,367 11,486,697 11,331,161 11,141,946
Federal funds purchased and
securities sold under agreement
to repurchase 468,969 415,949 431,089 405,937 425,203
Short-term Federal Home Loan Bank borrowings
and other short-term borrowing - - - 62,000 224,500
Accrued interest payable 4,107 3,727 3,305 3,071 3,353
Junior subordinated debt securities 23,198 23,198 23,198 23,198 23,198
Long-term debt 563,495 365,588 67,681 69,775 71,868
Other liabilities 237,551 251,288 234,635 248,076 252,536
Total Liabilities 12,887,379 12,424,117 12,246,605 12,143,218 12,142,604
Shareholders' Equity
--------------------
Common stock 235,187 236,365 236,097 235,407 234,925
Capital surplus 278,973 286,994 283,800 282,934 278,998
Accumulated other comprehensive loss (33,549) (27,587) (32,144) (41,825) (36,355)
Retained earnings 1,243,493 1,217,271 1,192,040 1,178,928 1,167,252
Total Shareholders' Equity 1,724,104 1,713,043 1,679,793 1,655,444 1,644,820
Total Liabilities & Shareholders' Equity $14,611,483 $14,137,160 $13,926,398 $13,798,662 $13,787,424
=========== =========== =========== =========== ===========
BancorpSouth, Inc.
Consolidated Average Balance Sheets
(Unaudited)
Sep-16 Jun-16 Mar-16 Dec-15 Sep-15
------ ------ ------ ------ ------
(Dollars in thousands)
Assets
------
Cash and due from banks $157,233 $117,193 $71,528 $159,696 $159,569
Interest bearing deposits with other banks 311,545 237,635 316,108 69,552 72,438
Available-for-sale securities, at fair value 2,186,889 2,069,058 2,037,739 2,110,195 2,207,935
Loans and leases 10,629,522 10,543,795 10,405,063 10,353,913 10,144,874
Less: Unearned income 28,041 30,063 32,138 32,614 33,879
Allowance for credit losses 126,820 126,103 126,567 132,375 137,547
Net loans and leases 10,474,661 10,387,629 10,246,358 10,188,924 9,973,448
Loans held for sale 165,351 142,632 103,227 127,638 157,598
Premises and equipment, net 305,707 307,600 308,065 306,881 304,948
Accrued interest receivable 38,125 36,887 38,306 38,142 38,847
Goodwill 294,901 292,620 291,498 291,498 291,498
Other identifiable intangibles 20,248 19,796 19,987 20,880 21,812
Bank owned life insurance 255,967 254,191 252,422 250,577 248,798
Other real estate owned 13,664 15,666 14,523 21,049 24,008
Other assets 142,468 146,879 151,900 139,563 131,682
Total Assets $14,366,759 $14,027,786 $13,851,661 $13,724,595 $13,632,581
=========== =========== =========== =========== ===========
Liabilities
-----------
Deposits:
Demand: Noninterest bearing $3,221,539 $3,122,153 $3,014,896 $3,106,947 $2,992,903
Interest bearing 4,886,920 4,957,827 5,102,648 4,782,234 4,822,567
Savings 1,525,016 1,510,250 1,468,262 1,421,361 1,413,187
Other time 1,876,289 1,847,192 1,845,674 1,872,208 1,911,885
Total deposits 11,509,764 11,437,422 11,431,480 11,182,750 11,140,542
Federal funds purchased and
securities sold under agreement
to repurchase 454,826 443,340 431,260 466,865 439,503
Short-term Federal Home Loan Bank borrowings
and other short-term borrowing 11 4,275 10,484 107,408 62,136
Accrued interest payable 3,950 3,509 3,248 3,340 3,600
Junior subordinated debt securities 23,198 23,198 23,198 23,198 23,198
Long-term debt 430,886 219,434 67,750 69,775 71,868
Other liabilities 224,621 205,702 215,776 220,335 211,611
Total Liabilities 12,647,256 12,336,880 12,183,196 12,073,671 11,952,458
Shareholders' Equity
--------------------
Common stock 235,860 236,176 235,946 235,227 240,473
Capital surplus 283,437 284,818 282,796 282,076 325,118
Accumulated other comprehensive loss (29,743) (32,820) (36,184) (38,618) (40,476)
Retained earnings 1,229,949 1,202,732 1,185,907 1,172,239 1,155,008
Total Shareholders' Equity 1,719,503 1,690,906 1,668,465 1,650,924 1,680,123
Total Liabilities & Shareholders' Equity $14,366,759 $14,027,786 $13,851,661 $13,724,595 $13,632,581
=========== =========== =========== =========== ===========
BancorpSouth, Inc.
Consolidated Condensed Statements of Income
(Dollars in thousands, except per share data)
(Unaudited)
Quarter Ended YTD
------------- ---
Sep-16 Jun-16 Mar-16 Dec-15 Sep-15 Sep-16 Sep-15
------ ------ ------ ------ ------ ------ ------
INTEREST REVENUE:
Loans and leases $111,605 $109,078 $107,805 $107,164 $107,086 $328,488 $312,649
Deposits with other banks 409 229 263 40 36 901 398
Available-for-sale securities:
Taxable 6,189 6,009 5,888 6,550 6,490 18,086 19,758
Tax-exempt 2,898 2,924 3,032 3,137 3,226 8,854 9,938
Loans held for sale 1,239 1,183 984 1,159 1,363 3,406 3,585
Total interest revenue 122,340 119,423 117,972 118,050 118,201 359,735 346,328
------- ------- ------- ------- ------- ------- -------
INTEREST EXPENSE:
Interest bearing demand 2,361 2,208 2,163 2,166 2,209 6,732 6,654
Savings 462 451 443 434 431 1,356 1,269
Other time 3,661 3,436 3,354 3,356 3,646 10,451 11,481
Federal funds purchased and securities sold
under agreement to repurchase 173 159 140 112 104 472 271
Long-term debt 902 665 530 581 571 2,097 1,704
Junior subordinated debt 190 187 183 171 168 560 496
Other 1 1 - - 2 2 1
Total interest expense 7,750 7,107 6,813 6,820 7,131 21,670 21,876
----- ----- ----- ----- ----- ------ ------
Net interest revenue 114,590 112,316 111,159 111,230 111,070 338,065 324,452
Provision for credit losses - 2,000 1,000 - (3,000) 3,000 (13,000)
--- ----- ----- --- ------ ----- -------
Net interest revenue, after provision for
credit losses 114,590 110,316 110,159 111,230 114,070 335,065 337,452
------- ------- ------- ------- ------- ------- -------
NONINTEREST REVENUE:
Mortgage banking 12,282 9,043 2,618 10,522 2,339 23,943 25,008
Credit card, debit card and merchant fees 9,292 9,495 8,961 9,414 9,282 27,748 27,119
Deposit service charges 11,313 11,018 11,014 11,836 12,150 33,345 34,929
Security gains, net 1 86 2 48 33 89 88
Insurance commissions 28,194 28,803 33,249 25,348 28,584 90,246 91,396
Wealth Management 5,312 5,347 5,109 5,375 5,567 15,768 17,285
Other 4,474 5,891 4,562 4,843 4,998 14,927 14,757
----- ----- ----- ----- ----- ------ ------
Total noninterest revenue 70,868 69,683 65,515 67,386 62,953 206,066 210,582
------ ------ ------ ------ ------ ------- -------
NONINTEREST EXPENSE:
Salaries and employee benefits 82,079 81,832 82,467 80,177 81,354 246,378 242,292
Occupancy, net of rental income 10,412 10,109 10,273 10,434 10,819 30,794 31,432
Equipment 3,423 3,295 3,765 3,569 3,742 10,483 11,740
Deposit insurance assessments 3,227 2,582 2,288 2,630 2,191 8,097 6,879
Regulatory settlement - - 10,277 - - 10,277 -
Other 30,371 30,900 33,230 51,541 28,344 94,501 99,217
------ ------ ------ ------ ------ ------ ------
Total noninterest expense 129,512 128,718 142,300 148,351 126,450 400,530 391,560
------- ------- ------- ------- ------- ------- -------
Income before income taxes 55,946 51,281 33,374 30,265 50,573 140,601 156,474
Income tax expense 18,129 16,589 10,825 9,096 16,230 45,543 50,152
------ ------ ------ ----- ------ ------ ------
Net income $37,817 $34,692 $22,549 $21,169 $34,343 $95,058 $106,322
======= ======= ======= ======= ======= ======= ========
Net income per share: Basic $0.40 $0.37 $0.24 $0.22 $0.36 $1.01 $1.10
===== ===== ===== ===== ===== ===== =====
Diluted $0.40 $0.37 $0.24 $0.22 $0.36 $1.00 $1.10
===== ===== ===== ===== ===== ===== =====
BancorpSouth, Inc.
Selected Loan Data
(Dollars in thousands)
(Unaudited)
Quarter Ended
-------------
Sep-16 Jun-16 Mar-16 Dec-15 Sep-15
------ ------ ------ ------ ------
LOAN AND LEASE PORTFOLIO:
Commercial and industrial $1,616,152 $1,698,089 $1,716,477 $1,747,774 $1,710,497
Real estate
Consumer mortgages 2,611,387 2,549,989 2,480,828 2,472,202 2,447,132
Home equity 622,566 614,686 605,228 589,752 573,566
Agricultural 242,171 251,566 239,422 259,360 252,381
Commercial and industrial-owner occupied 1,668,477 1,644,618 1,654,577 1,617,429 1,605,811
Construction, acquisition and development 1,121,386 1,021,218 966,362 945,045 900,875
Commercial real estate 2,240,717 2,254,653 2,233,742 2,188,048 2,141,398
Credit cards 107,447 108,101 106,714 112,165 109,576
All other 428,458 433,058 441,347 441,003 478,340
------- ------- ------- ------- -------
Total loans $10,658,761 $10,575,978 $10,444,697 $10,372,778 $10,219,576
----------- ----------- ----------- ----------- -----------
ALLOWANCE FOR CREDIT LOSSES:
Balance, beginning of period $126,935 $126,506 $126,458 $133,009 $138,312
Loans and leases charged-off:
Commercial and industrial (1,180) (748) (140) (6,193) (2,010)
Real estate
Consumer mortgages (595) (477) (710) (1,146) (1,382)
Home equity (237) (224) (550) (147) (314)
Agricultural (89) (10) (11) (16) (9)
Commercial and industrial-owner occupied (261) (660) (154) (357) (645)
Construction, acquisition and development (5) (280) (226) (221) (203)
Commercial real estate (14) (870) (245) (122) (1,477)
Credit cards (696) (614) (720) (723) (706)
All other (713) (417) (487) (623) (628)
Total loans charged-off (3,790) (4,300) (3,243) (9,548) (7,374)
------ ------ ------ ------ ------
Recoveries:
Commercial and industrial 263 339 212 354 897
Real estate
Consumer mortgages 327 499 455 596 461
Home equity 109 246 80 123 90
Agricultural 28 96 36 20 59
Commercial and industrial-owner occupied 117 101 125 307 1,831
Construction, acquisition and development 382 524 272 1,061 1,084
Commercial real estate 1,043 509 683 149 187
Credit cards 262 199 181 152 170
All other 211 216 247 235 292
Total recoveries 2,742 2,729 2,291 2,997 5,071
----- ----- ----- ----- -----
Net charge-offs (1,048) (1,571) (952) (6,551) (2,303)
Provision charged to operating expense - 2,000 1,000 - (3,000)
Balance, end of period $125,887 $126,935 $126,506 $126,458 $133,009
-------- -------- -------- -------- --------
Average loans for period $10,601,481 $10,513,732 $10,372,925 $10,321,299 $10,110,995
=========== =========== =========== =========== ===========
Ratio:
Net charge-offs to average loans (annualized) 0.04% 0.06% 0.04% 0.25% 0.09%
==== ==== ==== ==== ====
BancorpSouth, Inc.
Selected Loan Data
(Dollars in thousands)
(Unaudited)
Quarter Ended
-------------
Sep-16 Jun-16 Mar-16 Dec-15 Sep-15
------ ------ ------ ------ ------
NON-PERFORMING ASSETS
NON-PERFORMING LOANS AND LEASES:
Nonaccrual Loans and Leases
Commercial and industrial $11,659 $8,675 $10,248 $8,493 $15,697
Real estate
Consumer mortgages 20,196 19,309 22,968 21,637 21,959
Home equity 3,721 2,734 3,564 4,021 3,664
Agricultural 1,194 1,107 932 921 484
Commercial and industrial-owner occupied 11,983 16,021 16,633 16,512 12,690
Construction, acquisition and development 6,939 6,086 7,720 9,130 4,240
Commercial real estate 14,793 14,197 19,417 21,741 10,730
Credit cards 121 159 188 188 215
All other 119 350 256 385 558
--- --- --- --- ---
Total nonaccrual loans and leases $70,725 $68,638 $81,926 $83,028 $70,237
------- ------- ------- ------- -------
Loans and Leases 90+ Days Past Due, Still Accruing: 2,255 1,875 4,567 2,013 1,436
Restructured Loans and Leases, Still Accruing 17,936 9,687 7,753 9,876 18,578
Total non-performing loans and leases 90,916 80,200 94,246 94,917 90,251
------ ------ ------ ------ ------
OTHER REAL ESTATE OWNED: 11,391 14,658 12,685 14,759 23,696
------ ------ ------ ------ ------
Total Non-performing Assets $102,307 $94,858 $106,931 $109,676 $113,947
======== ======= ======== ======== ========
Additions to Nonaccrual Loans and Leases During the Quarter $17,319 $10,553 $15,933 $34,050 $22,271
======= ======= ======= ======= =======
Loans and Leases 30-89 Days Past Due, Still Accruing:
Commercial and industrial $6,736 $3,748 $3,758 $2,409 $4,985
Real estate
Consumer mortgages 15,443 15,784 11,985 15,128 10,789
Home equity 3,854 2,842 2,414 2,456 1,455
Agricultural 616 367 240 303 393
Commercial and industrial-owner occupied 1,712 2,854 669 1,018 3,888
Construction, acquisition and development 1,272 1,137 1,489 1,070 1,218
Commercial real estate 15,221 3,776 1,831 830 798
Credit cards 774 677 569 677 788
All other 1,089 712 606 744 1,334
----- --- --- --- -----
Total Loans and Leases 30-89 days past due, still accruing $46,717 $31,897 $23,561 $24,635 $25,648
======= ======= ======= ======= =======
Credit Quality Ratios:
Provision for credit losses to average loans and leases (annualized) 0.00% 0.08% 0.04% 0.00% (0.12%)
Allowance for credit losses to net loans and leases 1.18% 1.20% 1.21% 1.22% 1.30%
Allowance for credit losses to non-performing loans and leases 138.47% 158.27% 134.23% 133.23% 147.38%
Allowance for credit losses to non-performing assets 123.05% 133.82% 118.31% 115.30% 116.73%
Non-performing loans and leases to net loans and leases 0.85% 0.76% 0.90% 0.92% 0.88%
Non-performing assets to net loans and leases 0.96% 0.90% 1.02% 1.06% 1.11%
BancorpSouth, Inc.
Selected Loan Data
(Dollars in thousands)
(Unaudited)
September 30, 2016
------------------
Special
Pass Mention Substandard Doubtful Loss Impaired Total
---- ------- ----------- -------- ---- -------- -----
LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE:
Commercial and industrial $1,567,073 $ - $42,117 $774 $ - $6,188 $1,616,152
Real estate
Consumer mortgages 2,549,780 528 59,727 89 - 1,263 2,611,387
Home equity 610,313 - 10,766 - - 1,487 622,566
Agricultural 230,891 - 10,639 - - 641 242,171
Commercial and industrial-owner occupied 1,619,545 512 39,135 - - 9,285 1,668,477
Construction, acquisition and development 1,103,739 - 11,308 - - 6,339 1,121,386
Commercial real estate 2,188,170 - 38,637 - - 13,910 2,240,717
Credit cards 107,447 - - - - - 107,447
All other 420,838 - 7,620 - - - 428,458
Total loans $10,397,796 $1,040 $219,949 $863 $ - $39,113 $10,658,761
=========== ====== ======== ==== ================== ======= ===========
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
=========== ==== ======== ==== ==== ======= ===========
BancorpSouth, Inc.
Geographical Information
(Dollars in thousands)
(Unaudited)
September 30, 2016
------------------
Alabama
and Florida
Panhandle Arkansas Louisiana Mississippi Missouri Tennessee Texas Other Total
--------- -------- --------- ----------- -------- --------- ----- ----- -----
LOAN AND LEASE PORTFOLIO:
Commercial and industrial $135,467 $205,833 $184,819 $639,204 $78,950 $116,203 $214,287 $41,389 $1,616,152
Real estate
Consumer mortgages 335,856 325,793 226,092 831,986 84,046 294,218 484,806 28,590 2,611,387
Home equity 96,539 43,963 69,255 227,952 23,328 144,835 14,836 1,858 622,566
Agricultural 7,734 81,798 27,160 67,213 5,032 12,864 40,052 318 242,171
Commercial and industrial-owner occupied 195,572 178,681 200,406 662,735 49,901 140,843 240,339 - 1,668,477
Construction, acquisition and development 127,828 101,148 58,844 353,188 24,535 163,247 292,596 - 1,121,386
Commercial real estate 284,543 356,121 223,016 608,483 199,928 196,105 372,521 - 2,240,717
Credit cards - - - - - - - 107,447 107,447
All other 70,487 45,925 28,675 174,356 3,562 30,749 55,727 18,977 428,458
Total loans $1,254,026 $1,339,262 $1,018,267 $3,565,117 $469,282 $1,099,064 $1,715,164 $198,579 $10,658,761
========== ========== ========== ========== ======== ========== ========== ======== ===========
NON-PERFORMING LOANS AND LEASES:
Commercial and industrial $167 $509 $3,191 $5,598 $402 $379 $1,586 $2,645 $14,477
Real estate
Consumer mortgages 1,197 3,749 2,950 10,148 614 1,840 2,593 187 23,278
Home equity 559 1,311 530 720 81 520 - 2 3,723
Agricultural - 30 50 1,191 - - - 1 1,272
Commercial and industrial-owner occupied 1,372 1,967 1,790 7,691 317 574 616 - 14,327
Construction, acquisition and development 77 631 19 6,359 50 - 43 - 7,179
Commercial real estate 705 1,146 1,411 18,134 - 15 155 - 21,566
Credit cards - - - - - - - 1,353 1,353
All other - 680 32 135 - 21 2,872 1 3,741
--- --- --- --- --- --- ----- ---
Total loans $4,077 $10,023 $9,973 $49,976 $1,464 $3,349 $7,865 $4,189 $90,916
====== ======= ====== ======= ====== ====== ====== ====== =======
NON-PERFORMING LOANS AND LEASES
AS A PERCENTAGE OF OUTSTANDING:
Commercial and industrial 0.12% 0.25% 1.73% 0.88% 0.51% 0.33% 0.74% 6.39% 0.90%
Real estate
Consumer mortgages 0.36% 1.15% 1.30% 1.22% 0.73% 0.63% 0.53% 0.65% 0.89%
Home equity 0.58% 2.98% 0.77% 0.32% 0.35% 0.36% 0.00% 0.11% 0.60%
Agricultural 0.00% 0.04% 0.18% 1.77% 0.00% 0.00% 0.00% N/A 0.53%
Commercial and industrial-owner occupied 0.70% 1.10% 0.89% 1.16% 0.64% 0.41% 0.26% N/A 0.86%
Construction, acquisition and development 0.06% 0.62% 0.03% 1.80% 0.20% 0.00% 0.01% N/A 0.64%
Commercial real estate 0.25% 0.32% 0.63% 2.98% 0.00% 0.01% 0.04% N/A 0.96%
Credit cards N/A N/A N/A N/A N/A N/A N/A 1.26% 1.26%
All other 0.00% 1.48% 0.11% 0.08% 0.00% 0.07% 5.15% 0.01% 0.87%
Total loans 0.33% 0.75% 0.98% 1.40% 0.31% 0.30% 0.46% 2.11% 0.85%
==== ==== ==== ==== ==== ==== ==== ==== ====
BancorpSouth, Inc.
Noninterest Revenue and Expense
(Dollars in thousands)
(Unaudited)
Quarter Ended YTD
------------- ---
Sep-16 Jun-16 Mar-16 Dec-15 Sep-15 Sep-16 Sep-15
------ ------ ------ ------ ------ ------ ------
NONINTEREST REVENUE:
Mortgage banking excl. MSR market value adjustment $10,469 $13,135 $10,572 $7,657 $7,647 $34,176 $29,034
MSR market value adjustment 1,813 (4,092) (7,954) 2,865 (5,308) (10,233) (4,026)
Credit card, debit card and merchant fees 9,292 9,495 8,961 9,414 9,282 27,748 27,119
Deposit service charges 11,313 11,018 11,014 11,836 12,150 33,345 34,929
Securities gains, net 1 86 2 48 33 89 88
Insurance commissions 28,194 28,803 33,249 25,348 28,584 90,246 91,396
Trust income 3,641 3,493 3,430 3,469 3,653 10,564 11,232
Annuity fees 446 465 477 449 539 1,388 1,567
Brokerage commissions and fees 1,225 1,389 1,202 1,457 1,375 3,816 4,486
Bank-owned life insurance 1,775 1,813 1,893 1,881 1,842 5,481 5,576
Other miscellaneous income 2,699 4,078 2,669 2,962 3,156 9,446 9,181
Total noninterest revenue $70,868 $69,683 $65,515 $67,386 $62,953 $206,066 $210,582
======= ======= ======= ======= ======= ======== ========
NONINTEREST EXPENSE:
Salaries and employee benefits $82,079 $81,832 $82,467 $80,177 $81,354 246,378 $242,292
Occupancy, net of rental income 10,412 10,109 10,273 10,434 10,819 30,794 31,432
Equipment 3,423 3,295 3,765 3,569 3,742 10,483 11,740
Deposit insurance assessments 3,227 2,582 2,288 2,630 2,191 8,097 6,879
Regulatory settlement - - 10,277 - - 10,277 -
Advertising 925 1,043 633 1,009 812 2,601 3,279
Foreclosed property expense 859 1,309 1,181 3,014 808 3,349 4,404
Telecommunications 1,288 1,259 1,295 1,322 1,267 3,842 3,904
Public relations 718 599 661 702 588 1,978 2,067
Data processing 6,856 6,685 6,391 6,092 6,156 19,932 18,056
Computer software 2,976 2,732 2,660 2,609 2,595 8,368 7,891
Amortization of intangibles 923 869 880 922 948 2,672 3,041
Legal 1,064 1,754 4,535 19,434 1,233 7,353 10,912
Merger expense - 1 1 13 8 2 12
Postage and shipping 1,059 985 1,117 1,139 1,030 3,161 3,396
Other miscellaneous expense 13,703 13,664 13,876 15,285 12,899 41,243 42,255
Total noninterest expense $129,512 $128,718 $142,300 $148,351 $126,450 $400,530 $391,560
======== ======== ======== ======== ======== ======== ========
INSURANCE COMMISSIONS:
Property and casualty commissions $20,927 $20,417 $19,877 $18,814 $21,155 61,221 $62,973
Life and health commissions 5,897 6,252 5,615 5,823 5,775 17,764 17,389
Risk management income 674 592 623 672 709 1,889 2,012
Other 696 1,542 7,134 39 945 9,372 9,022
Total insurance commissions $28,194 $28,803 $33,249 $25,348 $28,584 $90,246 $91,396
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BancorpSouth, Inc.
Selected Additional Information
(Dollars in thousands)
(Unaudited)
Quarter Ended
-------------
Sep-16 Jun-16 Mar-16 Dec-15 Sep-15
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MORTGAGE SERVICING RIGHTS:
Fair value, beginning of period $48,108 $50,544 $57,268 $52,973 $55,924
Additions to mortgage servicing rights:
Originations of servicing assets 4,349 3,723 2,612 3,065 4,231
Changes in fair value:
Due to payoffs/paydowns (2,338) (2,066) (1,380) (1,633) (1,872)
Due to change in valuation inputs or
assumptions used in the valuation model 1,813 (4,092) (7,954) 2,865 (5,308)
Other changes in fair value (2) (1) (2) (2) (2)
Fair value, end of period $51,930 $48,108 $50,544 $57,268 $52,973
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Production revenue:
Origination $8,168 $10,523 $7,208 $4,909 $5,154
Servicing 4,639 4,678 4,744 4,381 4,365
Payoffs/Paydowns (2,338) (2,066) (1,380) (1,633) (1,872)
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Total production revenue 10,469 13,135 10,572 7,657 7,647
Market value adjustment 1,813 (4,092) (7,954) 2,865 (5,308)
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Total mortgage banking revenue $12,282 $9,043 $2,618 $10,522 $2,339
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Mortgage loans serviced $6,285,027 $6,156,258 $6,096,220 $6,011,236 $5,942,736
MSR/mtg loans serviced 0.83% 0.78% 0.83% 0.95% 0.89%
AVAILABLE-FOR-SALE SECURITIES, at fair value
U.S. Government agencies $1,691,866 $1,310,803 $1,196,167 $1,244,640 $1,255,717
Government agency issued residential
mortgage-back securities 184,095 180,178 189,741 140,540 206,878
Government agency issued commercial
mortgage-back securities 178,827 193,475 207,908 260,693 229,922
Obligations of states and political subdivisions 384,995 399,391 408,537 417,499 451,600
Other 28,416 20,036 14,020 18,957 17,008
Total available-for-sale securities $2,468,199 $2,103,883 $2,016,373 $2,082,329 $2,161,125
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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
-------------
9/30/2016 6/30/2016 3/31/2016 12/31/2015 9/30/2015
--------- --------- --------- ---------- ---------
Net income $37,817 $34,692 $22,549 $21,169 $34,343
Plus: Merger expense, net of tax - 1 1 8 5
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
Net operating income $37,817 $34,640 $31,960 $31,393 $34,328
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Less: MSR market value adjustment, net of tax 1,124 (2,537) (4,931) 1,776 (3,291)
Net operating income-excluding MSR $36,693 $37,177 $36,891 $29,617 $37,619
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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
-------------
9/30/2016 6/30/2016 3/31/2016 12/31/2015 9/30/2015
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Tangible assets
Total assets $14,611,483 $14,137,160 $13,926,398 $13,798,662 $13,787,424
Less: Goodwill 294,901 294,901 291,498 291,498 291,498
Other identifiable intangible assets 19,908 20,831 19,664 20,545 21,466
Total tangible assets $14,296,674 $13,821,428 $13,615,236 $13,486,619 $13,474,460
Tangible shareholders' equity
Total shareholders' equity $1,724,104 $1,713,043 $1,679,793 $1,655,444 $1,644,820
Less: Goodwill 294,901 294,901 291,498 291,498 291,498
Other identifiable intangible assets 19,908 20,831 19,664 20,545 21,466
Total tangible shareholders' equity $1,409,295 $1,397,311 $1,368,631 $1,343,401 $1,331,856
Total average assets $14,366,759 $14,027,786 $13,851,661 $13,724,595 $13,632,581
Total common shares outstanding 94,074,740 94,546,091 94,438,626 94,162,728 93,969,994
Average shares outstanding-diluted 94,563,833 94,694,795 94,593,540 94,384,443 96,467,728
Tangible shareholders' equity to tangible assets (1) 9.86% 10.11% 10.05% 9.96% 9.88%
Return on tangible equity (2) 10.68% 9.99% 6.63% 6.25% 10.23%
Operating return on tangible equity-excluding MSR (3) 10.36% 10.70% 10.84% 8.75% 11.21%
Operating return on average assets-excluding MSR (4) 1.02% 1.07% 1.07% 0.86% 1.09%
Operating return on average shareholders' equity-excluding MSR (5) 8.49% 8.84% 8.89% 7.12% 8.88%
Tangible book value per share (6) $14.98 $14.78 $14.49 $14.27 $14.17
Operating earnings per share (7) $0.40 $0.37 $0.34 $0.33 $0.36
Operating earnings per share-excluding MSR (8) $0.39 $0.39 $0.39 $0.31 $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-third-quarter-2016-financial-results-300347902.html
SOURCE BancorpSouth, Inc.
