BANCORPSOUTH, INC. TUPELO, Miss., Oct. 18, 2017 /PRNewswire/ -- BancorpSouth, Inc. (NYSE: BXS) today announced financial results for the quarter ended September 30, 2017.
Highlights for the third quarter of 2017 included:
-- Net income of $39.5 million, or $0.43 per diluted share.
-- Net operating income - excluding MSR - of $39.6 million, or $0.43 per
diluted share.
-- Net interest margin increased to 3.58 percent.
-- Credit quality remained strong; recorded provision for credit losses of
$0.5 million for the quarter.
-- Total operating expense declined compared to the second quarter of 2017
and the third quarter of 2016 and operating efficiency ratio - excluding
MSR - improved to 67.2 percent.
-- Repurchased 699,888 shares of outstanding common stock at a weighted
average price of $28.99 per share.
-- Announced a corporate entity restructuring, whereby the holding company
structure will be eliminated through the merger of BancorpSouth, Inc.
with and into its wholly owned subsidiary, BancorpSouth Bank (the
"Bank") with the Bank continuing as the surviving entity (the
"Reorganization").
-- On October 6, 2017, the Bank received results from the Federal Deposit
Insurance Corporation (the "FDIC") 2017 Community Reinvestment Act
("CRA") examination, which reflected an overall CRA rating of
"Satisfactory".
The Company reported net income of $39.5 million, or $0.43 per diluted share, for the third quarter of 2017 compared with net income of $37.8 million, or $0.40 per diluted share, for the third quarter of 2016 and net income of $37.9 million, or $0.41 per diluted share, for the second quarter of 2017.
The Company reported net operating income - excluding MSR - of $39.6 million, or $0.43 per diluted share, for the third quarter of 2017 compared to $36.7 million, or $0.39 per diluted share, for the third quarter of 2016 and $38.8 million, or $0.42 per diluted share, for the second quarter of 2017. Net operating income - excluding MSR - is a non-GAAP financial measure used by management to assess the core operating performance of the Company. This measure excludes items such as securities gains and losses, mortgage servicing rights ("MSR") valuation adjustments, restructuring charges, merger-related expenses, industry-related legal settlements, and other one-time charges.
"First and foremost, we are pleased to have recently received positive results regarding our CRA examination," remarked Dan Rollins, Chairman and Chief Executive Officer. "We have consistently communicated our teammates' commitment to the communities we serve as well as our priority to meet or exceed all regulatory requirements and expectations. We are excited to have this examination behind us as we look to continue to execute our strategic plan."
"Further, our third quarter results reflect yet another quarter of continued steady improvement in our profitability and performance metrics. Our net interest margin increased to 3.58 percent for the quarter, which is the result of continued loan yield pickup from recent rate increases combined with our stable core deposit base. Total operating expenses declined for the quarter, which resulted in a decline in the operating efficiency ratio - excluding MSR - to 67.2 percent. These successes contributed to improvement in our quarterly return on assets to 1.07 percent. Finally, we continue to diligently manage our capital levels, as we repurchased approximately 0.7 million shares during the quarter at a weighted average price of $28.99 per share."
Net Interest Revenue
Net interest revenue was $120.6 million for the third quarter of 2017, an increase of 5.2 percent from $114.6 million for the third quarter of 2016 and an increase of 2.6 percent from $117.5 million for the second quarter of 2017. The fully taxable equivalent net interest margin was 3.58 percent for the third quarter of 2017 compared to 3.51 percent for the third quarter of 2016 and 3.52 percent for the second quarter of 2017. Yields on loans and leases were 4.33 percent for the third quarter of 2017 compared with 4.20 percent for the third quarter of 2016 and 4.27 percent for the second quarter of 2017, while yields on total interest earning assets were 3.89 percent for the third quarter of 2017 compared with 3.74 percent for the third quarter of 2016 and 3.80 percent for the second quarter of 2017. The average cost of deposits was 0.26 percent for the third quarter of 2017 compared to 0.22 percent for the third quarter of 2016 and 0.25 percent for the second quarter of 2017.
Asset, Deposit and Loan Activity
Total assets were $14.8 billion at September 30, 2017 compared with $14.6 billion at September 30, 2016. Loans and leases, net of unearned income, were $11.1 billion at September 30, 2017 compared with $10.7 billion at September 30, 2016.
Total deposits were $11.8 billion at September 30, 2017 compared with $11.6 billion at September 30, 2016. Time deposits decreased $72.4 million, or 3.9 percent, at September 30, 2017 compared to September 30, 2016. Over the same time period, interest bearing demand deposits increased $47.6 million, or 1.0 percent, while noninterest bearing demand deposits increased $106.0 million, or 3.2 percent, and savings deposits increased $104.6 million, or 6.8 percent.
Provision for Credit Losses and Allowance for Credit Losses
Earnings for the third quarter reflect a provision for credit losses of $0.5 million, compared to no provision for the third quarter of 2016 and a provision of $1.0 million for the second quarter of 2017. Net charge-offs for the third quarter of 2017 were $2.6 million, compared with net charge-offs of $1.0 million for the third quarter of 2016 and net charge-offs of $4.6 million for the second quarter of 2017. The allowance for credit losses was $119.5 million, or 1.08 percent of net loans and leases, at September 30, 2017, compared with $125.9 million, or 1.18 percent of net loans and leases, at September 30, 2016 and $121.6 million, or 1.10 percent of net loans and leases, at June 30, 2017.
Total non-performing assets were $71.0 million, or 0.64 percent of net loans and leases, at September 30, 2017 compared with $102.3 million, or 0.96 percent of net loans and leases, at September 30, 2016, and $79.4 million, or 0.72 percent of net loans and leases, at June 30, 2017. Other real estate owned was $6.0 million at September 30, 2017 compared with $11.4 million at September 30, 2016 and $7.7 million at June 30, 2017.
Noninterest Revenue
Noninterest revenue was $66.0 million for the third quarter of 2017, compared with $69.7 million for the third quarter of 2016 and $68.1 million for the second quarter of 2017. These results included the MSR valuation adjustment, which was essentially flat for the third quarter of 2017, compared with a positive MSR valuation adjustment of $1.8 million for the third quarter of 2016 and a negative MSR valuation adjustment of $1.5 million for the second quarter of 2017. Valuation adjustments in the MSR asset are driven primarily by fluctuations in interest rates period over period.
Excluding the MSR valuation adjustments, mortgage banking revenue was $7.0 million for the third quarter of 2017, compared with $9.3 million for the third quarter of 2016 and $7.6 million for the second quarter of 2017. Mortgage origination volume for the third quarter of 2017 was $342.4 million, compared with $478.2 million for the third quarter of 2016 and $385.9 million for the second quarter of 2017.
Credit and debit card fee revenue was $9.3 million for the third quarter of 2017, compared with $9.3 million for the third quarter of 2016 and $9.6 million for the second quarter of 2017. Deposit service charge revenue was $10.4 million for the third quarter of 2017, compared with $11.3 million for the third quarter of 2016 and $9.7 million for the second quarter of 2017. Insurance commission revenue was $28.6 million for the third quarter of 2017, compared with $28.2 million for the third quarter of 2016 and $31.1 million for the second quarter of 2017. Wealth management revenue was $5.4 million for the third quarter of 2017, compared with $5.3 million for both the third quarter of 2016 and the second quarter of 2017.
Noninterest Expense
Noninterest expense for the third quarter of 2017 was $126.9 million, compared with $128.3 million for the third quarter of 2016 and $127.6 million for the second quarter of 2017. Salaries and employee benefits expense was $81.4 million for the third quarter of 2017 compared to $80.9 million for the third quarter of 2016 and $81.6 million for the second quarter of 2017. Occupancy expense was $10.3 million for the third quarter of 2017, compared with $10.4 million for the third quarter of 2016 and $10.5 million for the second quarter of 2017. Other noninterest expense was $29.3 million for the third quarter of 2017, compared to $30.4 million for the third quarter of 2016 and $29.8 million for the second quarter of 2017.
Capital Management
The Company's equity capitalization is comprised entirely of common stock. BancorpSouth's ratio of shareholders' equity to assets was 11.52 percent at September 30, 2017, compared with 11.80 percent at September 30, 2016 and 11.40 percent at June 30, 2017. The ratio of tangible shareholders' equity to tangible assets was 9.56 percent at September 30, 2017, compared with 9.86 percent at September 30, 2016 and 9.44 percent at June 30, 2017.
During the third quarter of 2017, the Company repurchased 699,888 shares of its outstanding common stock at a weighted average price of $28.99 per share pursuant to its share repurchase program which is intended to comply with Rules 10b-18 and 10b5-1 promulgated under the Securities and Exchange Act of 1934, as amended. During the second quarter of 2017, the Company repurchased 1,381,634 shares at a weighted average price of $29.64 per share. As of September 30, 2017, the Company had 2,316,727 remaining shares available for repurchase under its current share repurchase authorization, which expires on December 29, 2017.
Estimated regulatory capital ratios at September 30, 2017 were calculated in accordance with the Basel III capital framework. BancorpSouth is a "well capitalized" bank holding company, as defined by federal regulations, at September 30, 2017, with Tier 1 risk-based capital of 12.04 and total risk-based capital of 13.03 percent, compared with required minimum levels of 8 percent and 10 percent, respectively, in order to qualify for "well capitalized" classification.
TRANSACTIONS
The Reorganization
On July 26, 2017, the Company, as part of a plan to effect a corporate entity restructuring, entered into an Agreement and Plan of Reorganization with the Bank. Thereafter, on August 15, 2017, the Company and the Bank entered into an Amended and Restated Agreement and Plan of Reorganization (the "Amended Plan of Reorganization") which provides that the Company will be merged with and into the Bank with the Bank continuing as the surviving entity. Upon completion of the Reorganization, the separate existence of the Company will cease, and all of the rights, privileges, powers, franchises, properties, assets, liabilities and obligations of the Company will be vested in and assumed by the Bank.
The Reorganization and the Amended Plan of Reorganization are described in more detail in the Company's Definitive Proxy Statement on Schedule 14A that was filed with the Securities and Exchange Commission (the "SEC") on August 29, 2017. The Board of Directors of the Company and the Bank each unanimously adopted the Amended Plan of Reorganization, and the shareholders of the Company approved the Amended Plan of Reorganization on September 27, 2017. The Company currently expects to complete the Reorganization during the fourth quarter, assuming that all of the conditions to completion of the Reorganization have been satisfied. The Company, however, can provide no assurances that the Reorganization will close in a timely manner or at all.
Waguespack & Associates Insurance, Inc.
On December 19, 2016, BancorpSouth Insurance Services, Inc. announced and closed the acquisition of certain assets of Gonzales, Louisiana based Waguespack & Associates Insurance, Inc. The agency was formed in 1986 and is expected to produce annual revenues of approximately $3 million. Waguespack will continue to operate under current leadership in its current location in Gonzales.
Central Community Corporation
On January 21, 2014, the Company announced the signing of a definitive merger agreement (the "CCC Merger Agreement") with Central Community Corporation ("CCC"), headquartered in Temple, Texas, pursuant to which CCC agreed to be merged with and into the Company (the "CCC Merger"). CCC 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, 2017, CCC, on a consolidated basis, reported total assets of $1.4 billion, total loans of $706.8 million and total deposits of $1.2 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 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.
For more information regarding the CCC Merger and the CCC Merger Agreement, please refer to the Company's Proxy Statement/Prospectus that was filed with the SEC on March 24, 2014 and the Company's Current Reports on Form 8-K that were filed with the SEC on July 24, 2014, July 1, 2015, October 14, 2016 and August 16, 2017. As previously reported in the Company's Current Report on Form 8-K filed on August 16, 2017, the Company, CCC and the Bank entered into a fourth amendment to the CCC Merger Agreement that, among other things, provides for the substitution of the Bank for the Company as a party to the CCC Merger Agreement with the Bank assuming all obligations of the Company under the CCC Merger Agreement ("CCC Amendment No. 4"). CCC Amendment No. 4 will become effective simultaneously with the effectiveness of the Reorganization.
The CCC Merger was unanimously approved by the Board of Directors of the Company and CCC and was approved by CCC shareholders on April 24, 2014. The CCC Merger Agreement has been extended until December 31, 2017 to allow for additional time to obtain the necessary regulatory approvals and to satisfy all closing conditions. The Company expects the CCC Merger to close shortly after receiving all required regulatory approvals, although the Company can provide no assurance that the CCC Merger will close timely or at all.
Ouachita Bancshares Corp.
On January 8, 2014, the Company announced the signing of a definitive merger agreement (the "OIB 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 (the "OIB Merger"). 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, 2017, OIB, on a consolidated basis, reported total assets of $730.2 million, total loans of $497.7 million and total deposits of $607.0 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 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.
For more information regarding the OIB Merger and the OIB Merger Agreement, please refer to the Company's Proxy Statement/Prospectus that was filed with the SEC on March 10, 2014 and the Company's Current Reports on Form 8-K that were filed with the SEC on July 24, 2014, July 1, 2015, October 14, 2016 and August 16, 2017. As previously reported in the Company's Current Report on Form 8-K filed on August 16, 2017, the Company, OIB and the Bank entered into a fourth amendment to the OIB Merger Agreement that, among other things, provides for the substitution of the Bank for the Company as a party to the OIB Merger Agreement with the Bank assuming all obligations of the Company under the OIB Merger Agreement ("OIB Amendment No. 4"). OIB Amendment No. 4 will become effective simultaneously with the effectiveness of the Reorganization.
The OIB Merger was unanimously approved by the Board of Directors of the Company and OIB and was approved by OIB shareholders on April 8, 2014. The OIB Merger Agreement has been extended until December 31, 2017 to allow for additional time to obtain the necessary regulatory approvals and to satisfy all closing conditions. The Company expects the OIB Merger to close shortly after receiving all required regulatory approvals, although the Company can provide no assurance that the OIB Merger will close timely or at all.
Summary
Rollins concluded, "While our story seems repetitive quarter after quarter, we are extremely proud of the progress we are making as a company. We continue to take actions to simplify our business model and improve efficiency, as evidenced by the proposed elimination of our holding company structure. This transaction has been approved by our shareholders and is currently pending regulatory approval. As we look forward, our business development teams are focused on calling on customers and growing our company. I'm confident their efforts, combined with our focus on efficiency, will allow us to continue to deliver improved performance to our shareholders."
Non-GAAP Measures and Ratios
This news release presents certain financial measures and ratios that are not calculated in accordance with U.S. generally accepted accounting principles ("GAAP"). A discussion regarding these non-GAAP measures and ratios, including reconciliations of non-GAAP measures to the most directly comparable GAAP measures and definitions for non-GAAP ratios, appears under the caption "Reconciliation of Non-GAAP Measures and Other Non-GAAP Ratio Definitions" beginning on page 19 of this news release.
Conference Call and Webcast
BancorpSouth will conduct a conference call to discuss its third quarter 2017 results on October 19, 2017, at 10:00 a.m. (Central Time). This conference call will be an interactive session between management and analysts. Shareholders and other interested parties may listen to this live conference call via Internet webcast by accessing www.BancorpSouth.com/Webcast. The webcast will also be available in archived format at the same address.
About BancorpSouth
BancorpSouth (NYSE: BXS) is headquartered in Tupelo, Mississippi, with $14.8 billion in assets. BancorpSouth operates 234 full service branch locations as well as additional mortgage, insurance, and loan production offices in Alabama, Arkansas, Florida, Louisiana, Mississippi, Missouri, Tennessee and Texas, including an insurance location in Illinois. BancorpSouth is committed to a culture of respect, diversity, and inclusion in both its workplace and communities. To learn more, visit our Community Commitment page at www.bancorpsouth.com. Like us on Facebook; follow us on Twitter: @MyBXS; or connect with us through LinkedIn.
Forward-Looking Statements
Certain statements contained in this news release may not be based upon historical facts and are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements may be identified by their reference to a future period or periods or by the use of forward-looking terminology such as "anticipate," "believe," "could," "estimate," "expect," "foresee," "hope," "intend," "may," "might," "plan," "will," or "would" or future or conditional verb tenses and variations or negatives of such terms. These forward-looking statements include, without limitation, those relating to the terms, timing and closing of the Reorganization, the proposed impact of the Reorganization on the Bank, the ability of the Company and the Bank to close the Reorganization in a timely manner or at all, the terms, timing and closings of the proposed mergers with Ouachita Bancshares Corp. and Central Community Corporation, the acceptance by customers of Ouachita Bancshares Corp. and Central Community Corporation of the Company's products and services if the proposed mergers close, the Company's ability to operate its regulatory compliance programs consistent with federal, state and local laws, including its Bank Secrecy Act ("BSA") and anti-money laundering ("AML") compliance program and its fair lending compliance program, the Company's compliance with the consent order it entered into with the Consumer Financial Protection Bureau and the United States Department of Justice related to the Company's fair lending practices (the "Consent Order"), amortization expense for intangible assets, goodwill impairments, loan impairment, utilization of appraisals and inspections for real estate loans, maturity, renewal or extension of construction, acquisition and development loans, net interest revenue, fair value determinations, the amount of the Company's non-performing loans and leases, credit quality, credit losses, liquidity, off-balance sheet commitments and arrangements, valuation of mortgage servicing rights, allowance and provision for credit losses, early identification and resolution of credit issues, utilization of non-GAAP financial measures, the ability of the Company to collect all amounts due according to the contractual terms of loan agreements, the Company's reserve for losses from representation and warranty obligations, the Company's foreclosure process related to mortgage loans, the resolution of non-performing loans that are collaterally dependent, real estate values, fully-indexed interest rates, interest rate risk, interest rate sensitivity, the impact of interest rates on loan yields, calculation of economic value of equity, impaired loan charge-offs, diversification of the Company's revenue stream, the growth of the Company's insurance business and commission revenue, the growth of the Company's customer base and loan, deposit and fee revenue sources, liquidity needs and strategies, sources of funding, net interest margin, declaration and payment of dividends, the utilization of the Company's share repurchase program, the implementation and execution of cost saving initiatives, improvement in the Company's efficiencies, operating expense trends, future acquisitions and consideration to be used therefor, and the impact of certain claims and ongoing, pending or threatened litigation, administrative and investigatory matters.
The Company cautions readers not to place undue reliance on the forward-looking statements contained in this news release, in that actual results could differ materially from those indicated in such forward-looking statements as a result of a variety of factors. These factors may include, but are not limited to, the Company's ability to operate its regulatory compliance programs consistent with federal, state and local laws, including its BSA/AML compliance program and its fair lending compliance program, the Company's ability to successfully implement and comply with the Consent Order, the ability of the Company, Ouachita Bancshares Corp. and Central Community Corporation to obtain regulatory approval of and close the proposed mergers, the willingness of Ouachita Bancshares Corp. and Central Community Corporation to proceed with the proposed mergers, the potential impact upon the Company of the delay in the closings of these proposed mergers, the ability of the Company and the Bank to complete the Reorganization, the ability of the Company and the Bank to satisfy the conditions to the completion of the Reorganization, including the receipt of regulatory approvals required for the Reorganization, the ability of the Company and the Bank to meet expectations regarding the timing, completion and accounting and tax treatments of the Reorganization, the possibility that any of the anticipated benefits of the Reorganization will not be realized or will not be realized as expected, the failure of the Reorganization to close for any other reason, the possibility that the Reorganization may be more expensive to complete than anticipated, including as a result of unexpected factors or events, the lack of availability of the Bank's filings mandated by the Exchange Act from the SEC's publicly available website after the closing of the Reorganization, the impact of any ongoing, pending or threatened litigation, administrative and investigatory matters involving the Company, conditions in the financial markets and economic conditions generally, the adequacy of the Company's provision and allowance for credit losses to cover actual credit losses, the credit risk associated with real estate construction, acquisition and development loans, limitations on the Company's ability to declare and pay dividends, the availability of capital on favorable terms if and when needed, liquidity risk, governmental regulation, including the Dodd-Frank Act, and supervision of the Company's operations, the short-term and long-term impact of changes to banking capital standards on the Company's regulatory capital and liquidity, the impact of regulations on service charges on the Company's core deposit accounts, the susceptibility of the Company's business to local economic and environmental conditions, the soundness of other financial institutions, changes in interest rates, the impact of monetary policies and economic factors on the Company's ability to attract deposits or make loans, volatility in capital and credit markets, reputational risk, the impact of the loss of any key Company personnel, the impact of hurricanes or other adverse weather events, any requirement that the Company write down goodwill or other intangible assets, diversification in the types of financial services the Company offers, the growth of the Company's insurance business and commission revenue, the growth of the Company's loan, deposit and fee revenue sources, the Company's ability to adapt its products and services to evolving industry standards and consumer preferences, competition with other financial services companies, risks in connection with completed or potential acquisitions, the Company's growth strategy, interruptions or breaches in the Company's information system security, the failure of certain third-party vendors to perform, unfavorable ratings by rating agencies, dilution caused by the Company's issuance of any additional shares of its common stock to raise capital or acquire other banks, bank holding companies, financial holding companies and insurance agencies, the utilization of the Company's share repurchase program, the implementation and execution of cost saving initiatives, other factors generally understood to affect the assets, business, cash flows, financial condition, liquidity, prospects and/or results of operations of financial services companies and other factors detailed from time to time in the Company's press and news releases, reports and other filings with the SEC. Forward-looking statements speak only as of the date that they were made, and, except as required by law, the Company does not undertake any obligation to update or revise forward-looking statements to reflect events or circumstances that occur after the date of this news release.
BancorpSouth, Inc.
Selected Financial Information
(Dollars in thousands, except per share data)
(Unaudited)
Quarter Ended Quarter Ended Quarter Ended Quarter Ended Quarter Ended Year to Date Year to Date
9/30/2017 6/30/2017 3/31/2017 12/31/2016 9/30/2016 9/30/2017 9/30/2016
--------- --------- --------- ---------- --------- --------- ---------
Earnings Summary:
Interest revenue $130,934 $126,855 $122,926 $123,444 $122,340 $380,715 $359,735
Interest expense 10,373 9,377 8,315 8,057 7,750 28,065 21,670
------ ----- ----- ----- ----- ------ ------
Net interest revenue 120,561 117,478 114,611 115,387 114,590 352,650 338,065
Provision for credit losses 500 1,000 1,000 1,000 - 2,500 3,000
--- ----- ----- ----- --- ----- -----
Net interest revenue, after provision
for credit losses 120,061 116,478 113,611 114,387 114,590 350,150 335,065
Noninterest revenue 65,960 68,130 70,869 71,975 69,673 204,959 202,926
Noninterest expense 126,903 127,553 127,109 130,519 128,317 381,565 397,390
------- ------- ------- ------- ------- ------- -------
Income before income taxes 59,118 57,055 57,371 55,843 55,946 173,544 140,601
Income tax expense 19,590 19,166 19,278 18,173 18,129 58,034 45,543
------ ------ ------ ------ ------ ------ ------
Net income $39,528 $37,889 $38,093 $37,670 $37,817 $115,510 $95,058
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Balance Sheet - Period End Balances
Total assets $14,760,394 $14,843,130 $14,866,054 $14,724,388 $14,611,483 $14,760,394 $14,611,483
Total earning assets 13,606,145 13,674,436 13,757,920 13,549,407 13,483,345 13,606,145 13,483,345
Total securities 2,359,967 2,421,295 2,540,887 2,531,676 2,468,199 2,359,967 2,468,199
Loans and leases, net of unearned income 11,055,509 11,018,540 10,801,694 10,811,991 10,658,761 11,055,509 10,658,761
Allowance for credit losses 119,496 121,561 125,196 123,736 125,887 119,496 125,887
Total deposits 11,775,988 11,938,296 12,042,845 11,688,141 11,590,059 11,775,988 11,590,059
Long-term debt 30,000 230,000 530,000 530,000 563,495 30,000 563,495
Total shareholders' equity 1,700,502 1,691,832 1,702,389 1,723,883 1,724,104 1,700,502 1,724,104
Balance Sheet - Average Balances
Total assets $14,710,245 $14,741,811 $14,832,260 $14,655,360 $14,366,759 $14,760,991 $14,083,108
Total earning assets 13,591,124 13,636,415 13,715,612 13,525,284 13,265,266 13,647,261 13,020,338
Total securities 2,367,633 2,497,108 2,507,701 2,479,008 2,186,889 2,456,967 2,098,220
Loans and leases, net of unearned income 11,013,270 10,883,102 10,820,486 10,737,802 10,601,481 10,906,326 10,496,431
Total deposits 11,802,682 11,902,415 11,941,851 11,700,213 11,509,764 11,881,806 11,459,739
Long-term debt 162,609 398,132 530,000 534,141 430,886 362,234 240,056
Total shareholders' equity 1,695,899 1,680,053 1,731,931 1,724,871 1,719,503 1,702,496 1,693,055
Nonperforming Assets:
Non-accrual loans and leases $55,796 $63,585 $74,439 $71,812 $70,725 $55,796 $70,725
Loans and leases 90+ days past due, still accruing 1,855 1,793 3,063 3,983 2,255 1,855 2,255
Restructured loans and leases, still accruing 7,366 6,303 4,060 26,047 17,936 7,366 17,936
Non-performing loans (NPLs) 65,017 71,681 81,562 101,842 90,916 65,017 90,916
------ ------ ------ ------- ------ ------ ------
Other real estate owned 5,956 7,704 8,458 7,810 11,391 5,956 11,391
----- ----- ----- ----- ------ ----- ------
Non-performing assets (NPAs) $70,973 $79,385 $90,020 $109,652 $102,307 $70,973 $102,307
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Financial Ratios and Other Data:
Return on average assets 1.07% 1.03% 1.04% 1.02% 1.05% 1.05% 0.90%
Operating return on average assets-excluding MSR* 1.07% 1.06% 1.01% 0.83% 1.02% 1.04% 1.05%
Return on average shareholders' equity 9.25% 9.05% 8.92% 8.69% 8.75% 9.07% 7.50%
Operating return on average shareholders' equity-excluding MSR* 9.25% 9.27% 8.63% 7.08% 8.49% 9.05% 8.74%
Return on tangible equity* 11.36% 11.08% 11.19% 10.70% 10.68% 11.18% 9.01%
Operating return on tangible equity-excluding MSR* 11.36% 11.35% 10.82% 8.71% 10.36% 11.16% 10.50%
Noninterest income to average assets 1.78% 1.85% 1.94% 1.95% 1.93% 1.86% 1.92%
Noninterest expense to average assets 3.42% 3.47% 3.48% 3.54% 3.55% 3.46% 3.77%
Net interest margin-fully taxable equivalent 3.58% 3.52% 3.46% 3.46% 3.51% 3.52% 3.55%
Net interest rate spread 3.45% 3.40% 3.35% 3.36% 3.41% 3.40% 3.45%
Efficiency ratio (tax equivalent)* 67.23% 67.90% 67.71% 68.79% 68.72% 67.61% 72.45%
Operating efficiency ratio-excluding MSR (tax equivalent)* 67.24% 67.33% 68.43% 73.14% 69.39% 67.66% 68.67%
Loan/deposit ratio 93.88% 92.30% 89.69% 92.50% 91.96% 93.88% 91.96%
Price to earnings multiple (avg) 19.42 18.83 19.15 22.02 18.86 19.42 18.86
Market value to book value 170.25% 164.07% 164.09% 168.76% 126.59% 170.25% 126.59%
Market value to book value (avg) 158.92% 161.24% 166.39% 145.61% 129.73% 160.35% 122.22%
Market value to tangible book value 209.66% 202.52% 202.32% 207.63% 154.87% 209.66% 154.87%
Market value to tangible book value (avg) 195.70% 199.07% 205.16% 179.14% 158.71% 197.47% 149.53%
Headcount FTE 3,950 3,989 3,973 3,998 3,981 3,950 3,981
*Denotes non-GAAP financial measure. Refer to related disclosure and reconciliation on pages 20 and 21.
Credit Quality Ratios:
Net charge-offs (recoveries) to average loans and leases (annualized) 0.09% 0.17% (0.02%) 0.12% 0.04% 0.08% 0.05%
Provision for credit losses to average loans and leases (annualized) 0.02% 0.04% 0.04% 0.04% 0.00% 0.03% 0.04%
Allowance for credit losses to net loans and leases 1.08% 1.10% 1.16% 1.14% 1.18% 1.08% 1.18%
Allowance for credit losses to non-performing loans and leases 183.79% 169.59% 153.50% 121.50% 138.47% 183.79% 138.47%
Allowance for credit losses to non-performing assets 168.37% 153.13% 139.08% 112.84% 123.05% 168.37% 123.05%
Non-performing loans and leases to net loans and leases 0.59% 0.65% 0.76% 0.94% 0.85% 0.59% 0.85%
Non-performing assets to net loans and leases 0.64% 0.72% 0.83% 1.01% 0.96% 0.64% 0.96%
Equity Ratios:
Total shareholders' equity to total assets 11.52% 11.40% 11.45% 11.71% 11.80% 11.52% 11.80%
Tangible shareholders' equity to tangible assets* 9.56% 9.44% 9.49% 9.73% 9.86% 9.56% 9.86%
Capital Adequacy:
Common Equity Tier 1 capital 12.04% 11.90% 12.16% 12.23% 12.13% 12.04% 12.13%
Tier 1 capital 12.04% 11.90% 12.16% 12.34% 12.32% 12.04% 12.32%
Total capital 13.03% 12.91% 13.21% 13.38% 13.37% 13.03% 13.37%
Tier 1 leverage capital 10.02% 9.93% 9.95% 10.32% 10.53% 10.02% 10.53%
Estimated for current quarter
Common Share Data:
Basic earnings per share $0.43 $0.41 $0.41 $0.40 $0.40 $1.26 $1.01
Diluted earnings per share 0.43 0.41 0.41 0.40 0.40 1.25 1.00
Operating earnings per share* 0.43 0.41 0.40 0.40 0.40 1.25 1.10
Operating earnings per share- excluding MSR* 0.43 0.42 0.39 0.33 0.39 1.25 1.57
Cash dividends per share 0.14 0.13 0.13 0.13 0.13 0.39 0.33
Book value per share 18.83 18.59 18.44 18.40 18.33 18.83 18.33
Tangible book value per share* 15.29 15.06 14.95 14.95 14.98 15.29 14.98
Market value per share (last) 32.05 30.50 30.25 31.05 23.20 32.05 23.30
Market value per share (high) 32.70 31.85 32.40 31.75 25.09 32.70 25.09
Market value per share (low) 27.20 28.20 28.10 22.23 20.98 27.20 18.69
Market value per share (avg) 29.92 29.98 30.68 26.79 23.78 30.19 22.40
Dividend payout ratio 32.20% 30.48% 30.73% 31.11% 31.17% 31.05% 32.27%
Total shares outstanding 90,329,896 91,022,729 92,344,409 93,696,687 94,074,740 90,329,896 94,074,740
Average shares outstanding - basic 90,911,702 91,366,309 93,642,848 93,740,626 94,303,916 91,973,620 94,378,050
Average shares outstanding - diluted 91,099,770 91,530,552 93,829,400 93,966,392 94,563,833 92,157,392 94,617,389
Yield/Rate:
(Taxable equivalent basis)
Loans, loans held for sale, and leases net of unearned income 4.33% 4.27% 4.20% 4.18% 4.20% 4.27% 4.20%
Available-for-sale securities:
Taxable 1.41% 1.37% 1.35% 1.31% 1.33% 1.38% 1.37%
Tax-exempt 5.25% 5.26% 5.29% 5.29% 5.32% 5.26% 5.35%
Short-term investments 1.02% 0.88% 0.76% 0.41% 0.52% 0.84% 0.42%
Total interest earning assets and revenue 3.89% 3.80% 3.70% 3.70% 3.74% 3.80% 3.77%
Deposits 0.26% 0.25% 0.23% 0.23% 0.22% 0.25% 0.22%
Demand - interest bearing 0.28% 0.25% 0.22% 0.20% 0.19% 0.25% 0.18%
Savings 0.12% 0.12% 0.12% 0.12% 0.12% 0.12% 0.12%
Other time 0.84% 0.81% 0.79% 0.79% 0.78% 0.81% 0.75%
Short-term borrowings 0.85% 0.69% 0.31% 0.16% 0.15% 0.68% 0.15%
Total interest bearing deposits & short-term borrowings 0.41% 0.37% 0.32% 0.31% 0.30% 0.37% 0.29%
Junior subordinated debt N/A N/A 3.29% 3.53% 3.27% 3.29% 3.23%
Long-term debt 1.79% 1.01% 0.87% 0.73% 0.83% 1.06% 1.16%
Total interest bearing liabilities and expense 0.44% 0.40% 0.35% 0.34% 0.34% 0.39% 0.32%
Interest bearing liabilities to interest earning assets 69.55% 69.68% 70.24% 69.43% 69.33% 69.82% 69.52%
Net interest tax equivalent adjustment $2,237 $2,248 $2,261 $2,371 $2,462 $6,742 $7,516
*Denotes non-GAAP financial measure. Refer to related disclosure and reconciliation on pages 19 and 20.
BancorpSouth, Inc.
Consolidated Balance Sheets
(Unaudited)
Sep-17 Jun-17 Mar-17 Dec-16 Sep-16
------ ------ ------ ------ ------
(Dollars in thousands)
Assets
------
Cash and due from banks $167,871 $178,376 $147,684 $184,152 $172,782
Interest bearing deposits with other banks 52,316 49,680 253,738 38,813 151,944
Available-for-sale securities, at fair value 2,359,967 2,421,295 2,540,887 2,531,676 2,468,199
Loans and leases 11,073,306 11,037,808 10,822,568 10,835,512 10,685,166
Less: Unearned income 17,797 19,268 20,874 23,521 26,405
Allowance for credit losses 119,496 121,561 125,196 123,736 125,887
Net loans and leases 10,936,013 10,896,979 10,676,498 10,688,255 10,532,874
Loans held for sale 138,353 184,921 161,600 166,927 204,441
Premises and equipment, net 311,530 306,863 305,250 305,561 305,245
Accrued interest receivable 44,454 40,716 42,329 42,005 41,583
Goodwill 300,798 300,798 300,798 300,798 294,901
Other identifiable intangibles 18,860 19,854 20,865 21,894 19,908
Bank owned life insurance 259,361 260,228 258,518 258,648 257,015
Other real estate owned 5,956 7,704 8,458 7,810 11,391
Other assets 164,915 175,716 149,429 177,849 151,200
Total Assets $14,760,394 $14,843,130 $14,866,054 $14,724,388 $14,611,483
=========== =========== =========== =========== ===========
Liabilities
-----------
Deposits:
Demand: Noninterest bearing $3,414,397 $3,390,428 $3,401,348 $3,250,537 $3,308,361
Interest bearing 4,925,127 5,095,570 5,182,011 5,034,470 4,877,482
Savings 1,638,033 1,630,123 1,627,621 1,561,819 1,533,401
Other time 1,798,431 1,822,175 1,831,865 1,841,315 1,870,815
Total deposits 11,775,988 11,938,296 12,042,845 11,688,141 11,590,059
Securities sold under agreement to repurchase 421,044 399,815 375,832 454,002 468,969
Federal funds purchased
and other short-term borrowing 625,000 365,000 - 92,000 -
Accrued interest payable 4,826 4,259 4,109 3,975 4,107
Junior subordinated debt securities - - - 12,888 23,198
Long-term debt 30,000 230,000 530,000 530,000 563,495
Other liabilities 203,034 213,928 210,879 219,499 237,551
Total Liabilities 13,059,892 13,151,298 13,163,665 13,000,505 12,887,379
Shareholders' Equity
--------------------
Common stock 225,825 227,557 230,861 234,242 235,187
Capital surplus 175,837 191,940 226,204 271,292 278,973
Accumulated other comprehensive loss (50,203) (49,861) (50,360) (50,937) (33,549)
Retained earnings 1,349,043 1,322,196 1,295,684 1,269,286 1,243,493
Total Shareholders' Equity 1,700,502 1,691,832 1,702,389 1,723,883 1,724,104
Total Liabilities & Shareholders' Equity $14,760,394 $14,843,130 $14,866,054 $14,724,388 $14,611,483
=========== =========== =========== =========== ===========
BancorpSouth, Inc.
Consolidated Average Balance Sheets
(Unaudited)
Sep-17 Jun-17 Mar-17 Dec-16 Sep-16
------ ------ ------ ------ ------
(Dollars in thousands)
Assets
------
Cash and due from banks $153,797 $156,387 $162,696 $171,791 $157,233
Interest bearing deposits with other banks 83,109 117,414 258,502 165,805 311,545
Available-for-sale securities, at fair value 2,367,633 2,497,108 2,507,701 2,479,008 2,186,889
Loans and leases 11,032,159 10,903,524 10,843,069 10,763,314 10,629,522
Less: Unearned income 18,889 20,422 22,583 25,512 28,041
Allowance for credit losses 121,501 125,578 124,662 125,526 126,820
Net loans and leases 10,891,769 10,757,524 10,695,824 10,612,276 10,474,661
Loans held for sale 127,112 138,792 128,923 142,669 165,351
Premises and equipment, net 309,592 306,483 305,637 305,994 305,707
Accrued interest receivable 40,100 38,702 38,774 38,648 38,125
Goodwill 300,798 300,798 300,798 296,888 294,901
Other identifiable intangibles 19,222 20,218 21,236 20,303 20,248
Bank owned life insurance 261,100 259,182 257,669 257,397 255,967
Other real estate owned 6,985 7,860 8,154 9,084 13,664
Other assets 149,028 141,343 146,346 155,497 142,468
Total Assets $14,710,245 $14,741,811 $14,832,260 $14,655,360 $14,366,759
=========== =========== =========== =========== ===========
Liabilities
-----------
Deposits:
Demand: Noninterest bearing $3,369,468 $3,362,801 $3,272,876 $3,344,632 $3,221,539
Interest bearing 4,985,113 5,079,388 5,244,069 4,951,906 4,886,920
Savings 1,634,577 1,626,996 1,587,725 1,543,542 1,525,016
Other time 1,813,524 1,833,230 1,837,181 1,860,133 1,876,289
Total deposits 11,802,682 11,902,415 11,941,851 11,700,213 11,509,764
Securities sold under agreement to repurchase 444,999 412,825 414,272 475,669 454,826
Federal funds purchased
and other short-term borrowing 411,815 151,352 19,545 3,924 11
Accrued interest payable 4,507 4,028 3,867 4,031 3,950
Junior subordinated debt securities - - 1,146 21,181 23,198
Long-term debt 162,609 398,132 530,000 534,141 430,886
Other liabilities 187,734 193,006 189,648 191,330 224,621
Total Liabilities 13,014,346 13,061,758 13,100,329 12,930,489 12,647,256
Shareholders' Equity
--------------------
Common stock 227,247 228,322 234,285 234,323 235,860
Capital surplus 189,545 199,115 265,685 271,900 283,437
Accumulated other comprehensive loss (48,591) (49,185) (50,616) (40,454) (29,743)
Retained earnings 1,327,698 1,301,801 1,282,577 1,259,102 1,229,949
Total Shareholders' Equity 1,695,899 1,680,053 1,731,931 1,724,871 1,719,503
Total Liabilities & Shareholders' Equity $14,710,245 $14,741,811 $14,832,260 $14,655,360 $14,366,759
=========== =========== =========== =========== ===========
BancorpSouth, Inc.
Consolidated Condensed Statements of Income
(Dollars in thousands, except per share data)
(Unaudited)
Quarter Ended Year to Date
------------- ------------
Sep-17 Jun-17 Mar-17 Dec-16 Sep-16 Sep-17 Sep-16
------ ------ ------ ------ ------ ------ ------
INTEREST REVENUE:
Loans and leases $119,599 $115,286 $111,498 $112,189 $111,605 $346,383 $328,488
Deposits with other banks 214 256 485 169 409 955 901
Available-for-sale securities:
Taxable 7,378 7,509 7,350 7,105 6,189 22,237 18,086
Tax-exempt 2,514 2,562 2,581 2,771 2,898 7,657 8,854
Loans held for sale 1,229 1,242 1,012 1,210 1,239 3,483 3,406
Total interest revenue 130,934 126,855 122,926 123,444 122,340 380,715 359,735
------- ------- ------- ------- ------- ------- -------
INTEREST EXPENSE:
Interest bearing demand 3,482 3,204 2,786 2,514 2,361 9,472 6,732
Savings 494 483 472 470 462 1,449 1,356
Other time 3,819 3,725 3,582 3,711 3,661 11,126 10,451
Federal funds purchased and securities sold
under agreement to repurchase 754 509 322 190 173 1,585 472
Short-term and long-term debt 1,824 1,456 1,142 985 902 4,422 2,097
Junior subordinated debt - - 9 187 190 9 560
Other - - 2 - 1 2 2
Total interest expense 10,373 9,377 8,315 8,057 7,750 28,065 21,670
------ ----- ----- ----- ----- ------ ------
Net interest revenue 120,561 117,478 114,611 115,387 114,590 352,650 338,065
Provision for credit losses 500 1,000 1,000 1,000 - 2,500 3,000
--- ----- ----- ----- --- ----- -----
Net interest revenue, after provision for
credit losses 120,061 116,478 113,611 114,387 114,590 350,150 335,065
------- ------- ------- ------- ------- ------- -------
NONINTEREST REVENUE:
Mortgage banking 6,909 6,134 8,990 16,803 11,087 22,033 20,803
Credit card, debit card and merchant fees 9,346 9,565 8,903 9,262 9,292 27,814 27,748
Deposit service charges 10,388 9,706 9,689 9,956 11,313 29,783 33,345
Security gains, net 5 23 1,071 39 1 1,099 89
Insurance commissions 28,616 31,126 32,940 25,709 28,194 92,682 90,246
Wealth management 5,386 5,275 5,174 5,401 5,312 15,835 15,768
Other 5,310 6,301 4,102 4,805 4,474 15,713 14,927
----- ----- ----- ----- ----- ------ ------
Total noninterest revenue 65,960 68,130 70,869 71,975 69,673 204,959 202,926
------ ------ ------ ------ ------ ------- -------
NONINTEREST EXPENSE:
Salaries and employee benefits 81,415 81,597 81,386 80,850 80,884 244,398 243,238
Occupancy, net of rental income 10,343 10,455 10,302 10,294 10,412 31,100 30,794
Equipment 3,352 3,438 3,568 3,563 3,423 10,358 10,483
Deposit insurance assessments 2,499 2,261 2,484 1,818 3,227 7,244 8,097
Regulatory settlement - - - - - - 10,277
Other 29,294 29,802 29,369 33,994 30,371 88,465 94,501
------ ------ ------ ------ ------ ------ ------
Total noninterest expense 126,903 127,553 127,109 130,519 128,317 381,565 397,390
------- ------- ------- ------- ------- ------- -------
Income before income taxes 59,118 57,055 57,371 55,843 55,946 173,544 140,601
Income tax expense 19,590 19,166 19,278 18,173 18,129 58,034 45,543
------ ------ ------ ------ ------ ------ ------
Net income $39,528 $37,889 $38,093 $37,670 $37,817 $115,510 $95,058
======= ======= ======= ======= ======= ======== =======
Net income per share: Basic $0.43 $0.41 $0.41 $0.40 $0.40 $1.26 $1.01
===== ===== ===== ===== ===== ===== =====
Diluted $0.43 $0.41 $0.41 $0.40 $0.40 $1.25 $1.00
===== ===== ===== ===== ===== ===== =====
BancorpSouth, Inc.
Selected Loan Data
(Dollars in thousands)
(Unaudited)
Quarter Ended
-------------
Sep-17 Jun-17 Mar-17 Dec-16 Sep-16
------ ------ ------ ------ ------
LOAN AND LEASE PORTFOLIO:
Commercial and industrial $1,506,352 $1,566,459 $1,536,527 $1,612,295 $1,616,152
Real estate
Consumer mortgages 2,826,333 2,776,213 2,675,672 2,643,966 2,611,387
Home equity 626,961 624,868 626,488 628,846 622,566
Agricultural 247,211 245,646 240,534 245,377 242,171
Commercial and industrial-owner occupied 1,835,430 1,795,321 1,801,613 1,764,265 1,668,477
Construction, acquisition and development 1,175,979 1,156,901 1,136,827 1,157,248 1,121,386
Commercial real estate 2,336,219 2,341,633 2,271,542 2,237,719 2,240,717
Credit cards 104,613 104,169 103,813 109,656 107,447
All other 396,411 407,330 408,678 412,619 428,458
------- ------- ------- ------- -------
Total loans $11,055,509 $11,018,540 $10,801,694 $10,811,991 $10,658,761
----------- ----------- ----------- ----------- -----------
ALLOWANCE FOR CREDIT LOSSES:
Balance, beginning of period $121,561 $125,196 $123,736 $125,887 $126,935
Loans and leases charged-off:
Commercial and industrial (1,963) (3,773) (384) (2,483) (1,180)
Real estate
Consumer mortgages (1,193) (522) (596) (905) (595)
Home equity (439) (125) (459) (873) (237)
Agricultural (54) (6) (44) - (89)
Commercial and industrial-owner occupied (20) (1,460) (404) (20) (261)
Construction, acquisition and development (29) (54) (30) (10) (5)
Commercial real estate (49) (1) (19) - (14)
Credit cards (745) (781) (838) (815) (696)
All other (711) (591) (559) (580) (713)
Total loans charged-off (5,203) (7,313) (3,333) (5,686) (3,790)
------ ------ ------ ------ ------
Recoveries:
Commercial and industrial 481 1,034 490 1,019 263
Real estate
Consumer mortgages 642 339 625 413 327
Home equity 378 110 356 71 109
Agricultural 77 34 41 15 28
Commercial and industrial-owner occupied 285 481 193 201 117
Construction, acquisition and development 260 208 1,324 195 382
Commercial real estate 151 75 69 176 1,043
Credit cards 177 205 249 208 262
All other 187 192 446 237 211
Total recoveries 2,638 2,678 3,793 2,535 2,742
----- ----- ----- ----- -----
Net (charge-offs) recoveries (2,565) (4,635) 460 (3,151) (1,048)
Provision charged to operating expense 500 1,000 1,000 1,000 -
Balance, end of period $119,496 $121,561 $125,196 $123,736 $125,887
-------- -------- -------- -------- --------
Average loans for period $11,013,270 $10,883,102 $10,820,486 $10,737,802 $10,601,481
=========== =========== =========== =========== ===========
Ratio:
Net charge-offs (recoveries) to average loans (annualized) 0.09% 0.17% (0.02%) 0.12% 0.04%
==== ==== ====== ==== ====
BancorpSouth, Inc.
Selected Loan Data
(Dollars in thousands)
(Unaudited)
Quarter Ended
-------------
Sep-17 Jun-17 Mar-17 Dec-16 Sep-16
------ ------ ------ ------ ------
NON-PERFORMING ASSETS
NON-PERFORMING LOANS AND LEASES:
Nonaccrual Loans and Leases
Commercial and industrial $8,776 $9,988 $13,959 $13,679 $11,659
Real estate
Consumer mortgages 23,635 24,690 21,543 21,084 20,196
Home equity 2,555 3,183 3,157 3,817 3,721
Agricultural 5,919 6,172 5,180 1,546 1,194
Commercial and industrial-owner occupied 7,558 10,215 15,135 10,791 11,983
Construction, acquisition and development 1,771 2,223 1,466 7,022 6,939
Commercial real estate 4,645 6,418 13,638 13,402 14,793
Credit cards 126 122 87 161 121
All other 811 574 274 310 119
--- --- --- --- ---
Total nonaccrual loans and leases $55,796 $63,585 $74,439 $71,812 $70,725
------- ------- ------- ------- -------
Loans and Leases 90+ Days Past Due, Still Accruing: 1,855 1,793 3,063 3,983 2,255
Restructured Loans and Leases, Still Accruing 7,366 6,303 4,060 26,047 17,936
Total non-performing loans and leases 65,017 71,681 81,562 101,842 90,916
------ ------ ------ ------- ------
OTHER REAL ESTATE OWNED: 5,956 7,704 8,458 7,810 11,391
----- ----- ----- ----- ------
Total Non-performing Assets $70,973 $79,385 $90,020 $109,652 $102,307
======= ======= ======= ======== ========
Additions to Nonaccrual Loans and Leases During the Quarter $16,975 $17,020 $23,348 $16,007 $17,319
======= ======= ======= ======= =======
Loans and Leases 30-89 Days Past Due, Still Accruing:
Commercial and industrial $3,791 $3,304 $4,083 $3,449 $6,736
Real estate
Consumer mortgages 18,603 12,395 10,149 14,490 15,443
Home equity 2,042 2,590 1,720 3,072 3,854
Agricultural 476 197 364 1,283 616
Commercial and industrial-owner occupied 4,453 2,228 1,949 2,120 1,712
Construction, acquisition and development 4,464 2,639 3,306 1,344 1,272
Commercial real estate 1,206 1,183 2,631 653 15,221
Credit cards 720 705 800 726 774
All other 699 1,203 776 673 1,089
--- ----- --- --- -----
Total Loans and Leases 30-89 days past due, still accruing $36,454 $26,444 $25,778 $27,810 $46,717
======= ======= ======= ======= =======
Credit Quality Ratios:
Provision for credit losses to average loans and leases (annualized) 0.02% 0.04% 0.04% 0.04% 0.00%
Allowance for credit losses to net loans and leases 1.08% 1.10% 1.16% 1.14% 1.18%
Allowance for credit losses to non-performing loans and leases 183.79% 169.59% 153.50% 121.50% 138.47%
Allowance for credit losses to non-performing assets 168.37% 153.13% 139.08% 112.84% 123.05%
Non-performing loans and leases to net loans and leases 0.59% 0.65% 0.76% 0.94% 0.85%
Non-performing assets to net loans and leases 0.64% 0.72% 0.83% 1.01% 0.96%
BancorpSouth, Inc.
Selected Loan Data
(Dollars in thousands)
(Unaudited)
September 30, 2017
------------------
Special
Pass Mention Substandard Doubtful Loss Impaired Total
---- ------- ----------- -------- ---- -------- -----
LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE:
Commercial and industrial $1,449,512 $762 $50,633 $290 $146 $5,009 $1,506,352
Real estate
Consumer mortgages 2,768,161 - 55,836 272 - 2,064 2,826,333
Home equity 617,463 - 8,731 - - 767 626,961
Agricultural 234,563 - 7,372 - - 5,276 247,211
Commercial and industrial-owner occupied 1,766,055 2,920 62,232 - - 4,223 1,835,430
Construction, acquisition and development 1,159,359 3,718 12,902 - - - 1,175,979
Commercial real estate 2,293,845 - 39,805 177 - 2,392 2,336,219
Credit cards 104,613 - - - - - 104,613
All other 392,100 - 4,211 100 - - 396,411
Total loans $10,785,671 $7,400 $241,722 $839 $146 $19,731 $11,055,509
=========== ====== ======== ==== ==== ======= ===========
June 30, 2017
-------------
Special
Pass Mention Substandard Doubtful Loss Impaired Total
---- ------- ----------- -------- ---- -------- -----
LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE:
Commercial and industrial $1,516,992 $ - $41,604 $301 $ - $7,562 $1,566,459
Real estate
Consumer mortgages 2,710,161 - 63,352 276 - 2,424 2,776,213
Home equity 613,216 - 10,802 - - 850 624,868
Agricultural 225,504 8,157 6,740 - - 5,245 245,646
Commercial and industrial-owner occupied 1,734,306 3,161 50,644 - - 7,210 1,795,321
Construction, acquisition and development 1,136,104 6,253 14,298 - - 246 1,156,901
Commercial real estate 2,299,529 - 37,214 169 - 4,721 2,341,633
Credit cards 104,169 - - - - - 104,169
All other 400,191 - 6,900 239 - - 407,330
Total loans $10,740,172 $17,571 $231,554 $985 $ - $28,258 $11,018,540
=========== ======= ======== ==== ================== ======= ===========
BancorpSouth, Inc.
Geographical Information
(Dollars in thousands)
(Unaudited)
September 30, 2017
------------------
Alabama
and Florida
Panhandle Arkansas Louisiana Mississippi Missouri Tennessee Texas Other Total
--------- -------- --------- ----------- -------- --------- ----- ----- -----
LOAN AND LEASE PORTFOLIO:
Commercial and industrial $136,368 $195,461 $193,882 $551,391 $70,856 $108,389 $200,118 $49,887 $1,506,352
Real estate
Consumer mortgages 379,388 327,113 233,715 879,524 92,807 316,209 543,855 53,722 2,826,333
Home equity 96,418 47,361 70,916 230,493 21,531 139,521 19,348 1,373 626,961
Agricultural 8,298 83,830 25,290 66,829 7,205 13,019 42,722 18 247,211
Commercial and industrial-owner occupied 210,503 203,249 223,947 710,693 46,384 154,354 286,300 - 1,835,430
Construction, acquisition and development 126,581 75,400 57,445 355,559 20,391 164,014 376,589 - 1,175,979
Commercial real estate 300,226 357,712 236,589 574,667 209,097 212,296 445,632 - 2,336,219
Credit cards - - - - - - - 104,613 104,613
All other 52,154 40,023 22,141 210,898 2,969 22,066 39,332 6,828 396,411
Total loans $1,309,936 $1,330,149 $1,063,925 $3,580,054 $471,240 $1,129,868 $1,953,896 $216,441 $11,055,509
========== ========== ========== ========== ======== ========== ========== ======== ===========
NON-PERFORMING LOANS AND LEASES:
Commercial and industrial $652 $951 $405 $4,346 $689 $105 $2,104 $635 $9,887
Real estate
Consumer mortgages 1,309 4,600 1,785 11,863 262 1,805 3,644 399 25,667
Home equity 540 723 694 501 79 110 - 2 2,649
Agricultural - 237 204 5,512 - - 15 - 5,968
Commercial and industrial-owner occupied 855 2,519 1,098 3,927 1,019 1,011 694 - 11,123
Construction, acquisition and development 42 719 267 784 - - 99 - 1,911
Commercial real estate 984 1,004 328 2,932 - - 299 - 5,547
Credit cards - - - - - - - 1,398 1,398
All other 14 - 7 645 - 196 5 - 867
--- --- --- --- --- --- --- ---
Total loans $4,396 $10,753 $4,788 $30,510 $2,049 $3,227 $6,860 $2,434 $65,017
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NON-PERFORMING LOANS AND LEASES
AS A PERCENTAGE OF OUTSTANDING:
Commercial and industrial 0.48% 0.49% 0.21% 0.79% 0.97% 0.10% 1.05% 1.27% 0.66%
Real estate
Consumer mortgages 0.35% 1.41% 0.76% 1.35% 0.28% 0.57% 0.67% 0.74% 0.91%
Home equity 0.56% 1.53% 0.98% 0.22% 0.37% 0.08% 0.00% 0.15% 0.42%
Agricultural 0.00% 0.28% 0.81% 8.25% 0.00% 0.00% 0.04% 0.00% 2.41%
Commercial and industrial-owner occupied 0.41% 1.24% 0.49% 0.55% 2.20% 0.65% 0.24% N/A 0.61%
Construction, acquisition and development 0.03% 0.95% 0.46% 0.22% 0.00% 0.00% 0.03% N/A 0.16%
Commercial real estate 0.33% 0.28% 0.14% 0.51% 0.00% 0.00% 0.07% N/A 0.24%
Credit cards N/A N/A N/A N/A N/A N/A N/A 1.34% 1.34%
All other 0.03% 0.00% 0.03% 0.31% 0.00% 0.89% 0.01% 0.00% 0.22%
Total loans 0.34% 0.81% 0.45% 0.85% 0.43% 0.29% 0.35% 1.12% 0.59%
==== ==== ==== ==== ==== ==== ==== ==== ====
BancorpSouth, Inc.
Noninterest Revenue and Expense
(Dollars in thousands)
(Unaudited)
Quarter Ended Year to Date
------------- ------------
Sep-17 Jun-17 Mar-17 Dec-16 Sep-16 Sep-17 Sep-16
------ ------ ------ ------ ------ ------ ------
NONINTEREST REVENUE:
Mortgage banking excl. MSR and MSR Hedge market value adj $6,955 $7,643 $8,056 $5,561 $9,274 $22,654 $31,036
MSR and MSR Hedge market value adjustment (46) (1,509) 934 11,242 1,813 (621) (10,233)
Credit card, debit card and merchant fees 9,346 9,565 8,903 9,262 9,292 27,814 27,748
Deposit service charges 10,388 9,706 9,689 9,956 11,313 29,783 33,345
Securities gains, net 5 23 1,071 39 1 1,099 89
Insurance commissions 28,616 31,126 32,940 25,709 28,194 92,682 90,246
Trust income 3,803 3,679 3,561 3,874 3,641 11,043 10,564
Annuity fees 246 264 349 257 446 859 1,388
Brokerage commissions and fees 1,337 1,332 1,264 1,270 1,225 3,933 3,816
Bank-owned life insurance 2,700 1,710 1,669 2,104 1,775 6,079 5,481
Other miscellaneous income 2,610 4,591 2,433 2,701 2,699 9,634 9,446
Total noninterest revenue $65,960 $68,130 $70,869 $71,975 $69,673 $204,959 $202,926
======= ======= ======= ======= ======= ======== ========
NONINTEREST EXPENSE:
Salaries and employee benefits $81,415 $81,597 $81,386 $80,850 $80,884 $244,398 $243,238
Occupancy, net of rental income 10,343 10,455 10,302 10,294 10,412 31,100 30,794
Equipment 3,352 3,438 3,568 3,563 3,423 10,358 10,483
Deposit insurance assessments 2,499 2,261 2,484 1,818 3,227 7,244 8,097
Regulatory settlement - - - - - - 10,277
Advertising 1,185 1,037 663 2,443 925 2,885 2,601
Foreclosed property expense 447 960 1,050 1,005 859 2,457 3,349
Telecommunications 1,192 1,233 1,147 1,245 1,288 3,572 3,842
Public relations 675 654 720 716 718 2,049 1,978
Data processing 6,942 7,230 6,623 6,903 6,856 20,795 19,932
Computer software 3,074 2,913 2,981 3,013 2,976 8,968 8,368
Amortization of intangibles 994 1,010 1,030 963 923 3,034 2,672
Legal 1,016 1,330 1,229 1,190 1,064 3,575 7,353
Merger expense - - - - - - 2
Postage and shipping 1,050 1,080 1,175 1,075 1,059 3,305 3,161
Other miscellaneous expense 12,719 12,355 12,751 15,441 13,703 37,825 41,243
Total noninterest expense $126,903 $127,553 $127,109 $130,519 $128,317 $381,565 $397,390
======== ======== ======== ======== ======== ======== ========
INSURANCE COMMISSIONS:
Property and casualty commissions $21,086 $22,363 $19,755 $19,098 $20,927 63,204 $61,221
Life and health commissions 6,134 6,623 6,465 5,757 5,897 19,222 17,764
Risk management income 703 600 648 610 674 1,951 1,889
Other 693 1,540 6,072 244 696 8,305 9,372
Total insurance commissions $28,616 $31,126 $32,940 $25,709 $28,194 $92,682 $90,246
======= ======= ======= ======= ======= ======= =======
BancorpSouth, Inc.
Selected Additional Information
(Dollars in thousands)
(Unaudited)
Quarter Ended
-------------
Sep-17 Jun-17 Mar-17 Dec-16 Sep-16
------ ------ ------ ------ ------
MORTGAGE SERVICING RIGHTS:
Fair value, beginning of period $65,491 $67,161 $65,263 $51,930 $48,108
Additions to mortgage servicing rights:
Originations of servicing assets 3,393 2,772 2,866 4,022 4,349
Changes in fair value:
Due to payoffs/paydowns (2,502) (2,825) (1,876) (2,447) (2,338)
Due to change in valuation inputs or
assumptions used in the valuation model 36 (1,616) 909 11,759 1,813
Other changes in fair value (1) (1) (1) (1) (2)
Fair value, end of period $66,417 $65,491 $67,161 $65,263 $51,930
======= ======= ======= ======= =======
MORTGAGE BANKING REVENUE:
Production revenue:
Origination $4,809 $5,771 $5,117 $3,335 $6,973
Servicing 4,648 4,697 4,815 4,673 4,639
Payoffs/Paydowns (2,502) (2,825) (1,876) (2,447) (2,338)
------ ------ ------ ------ ------
Total production revenue 6,955 7,643 8,056 5,561 9,274
Market value adjustment on MSR 36 (1,616) 909 11,759 1,813
Market value adjustment on MSR Hedge (82) 107 25 (517) -
Total mortgage lending revenue $6,909 $6,134 $8,990 $16,803 $11,087
====== ====== ====== ======= =======
Mortgage loans serviced $6,506,550 $6,431,273 $6,429,617 $6,384,649 $6,285,027
MSR/mtg loans serviced 1.02% 1.02% 1.04% 1.01% 0.83%
AVAILABLE-FOR-SALE SECURITIES, at fair value
U.S. Government agencies $1,687,186 $1,713,374 $1,818,180 $1,789,427 $1,691,866
Government agency issued residential
mortgage-back securities 157,891 159,246 167,542 176,243 184,095
Government agency issued commercial
mortgage-back securities 153,509 170,642 170,082 172,279 178,826
Obligations of states and political subdivisions 328,314 345,130 352,324 360,005 384,996
Other 33,067 32,903 32,759 33,722 28,416
Total available-for-sale securities $2,359,967 $2,421,295 $2,540,887 $2,531,676 $2,468,199
========== ========== ========== ========== ==========
BancorpSouth, Inc.
Reconciliation of Non-GAAP Measures and Other Non-GAAP Ratio Definitions
(Dollars in thousands, except per share amounts)
(Unaudited)
Management evaluates the Company's capital position and operating performance by utilizing certain financial measures not calculated in accordance with U.S. Generally Accepted Accounting Principles (GAAP), including net operating income, net operating income-excluding MSR, total operating expense, tangible shareholders' equity to tangible assets, return on tangible equity, operating
return on tangible equity-excluding MSR, operating return on average assets-excluding MSR, operating return on average shareholders' equity-excluding MSR, tangible book value per share, operating earnings per share, operating earnings per share-excluding MSR, efficiency ratio (tax equivalent) and operating efficiency ratio-excluding MSR (tax equivalent). The Company has included
these non-GAAP financial measures in this news release for the applicable periods presented. Management believes that the presentation of these non-GAAP financial measures (i) provides important supplemental information that contributes to a proper understanding of the Company's capital position and operating performance, (ii) enables a more complete understanding of factors and
trends affecting the Company's business and (iii) allows investors to evaluate the Company's performance in a manner similar to management, the financial services industry, bank stock analysts and bank regulators. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are presented in the tables below. These non-GAAP financial
measures should not be considered as substitutes for GAAP financial measures, and the Company strongly encourages investors to review the GAAP financial measures included in this news release and not to place undue reliance upon any single financial measure. In addition, because non-GAAP financial measures are not standardized, it may not be possible to compare the non-GAAP financial
measures presented in this news release with other companies' non-GAAP financial measures having the same or similar names.
Reconciliation of Net Operating Income and Net Operating Income-Excluding MSR to Net Income:
Quarter ended Year to Date
------------- ------------
9/30/2017 6/30/2017 3/31/2017 12/31/2016 9/30/2016 9/30/2017 9/30/2016
--------- --------- --------- ---------- --------- --------- ---------
Net income $39,528 $37,889 $38,093 $37,670 $37,817 $115,510 $95,058
Plus: Merger expense, net of tax - - - - - - 2
Regulatory related charges, net of tax - - - - - - 9,412
Less: Security gains, net of tax 3 14 664 25 - 681 55
Net operating income $39,525 $37,875 $37,429 $37,645 $37,817 $114,829 $104,417
======= ======= ======= ======= ======= ======== ========
Less: MSR market value adjustment, net of
tax (28) (936) 579 6,970 1,124 (385) (6,344)
Net operating income-excluding MSR $39,553 $38,811 $36,850 $30,675 $36,693 $115,214 $110,761
======= ======= ======= ======= ======= ======== ========
Reconciliation of Total Operating Expense to Total Noninterest Expense:
Total noninterest expense $126,903 $127,553 $127,109 $130,519 $128,317 $381,565 $397,390
Less: Merger expense - - - - - - 2
Regulatory related charges - - - - - - 13,777
Total operating expense $126,903 $127,553 $127,109 $130,519 $128,317 $381,565 $383,611
======== ======== ======== ======== ======== ======== ========
BancorpSouth, Inc.
Reconciliation of Non-GAAP Measures and Other Non-GAAP Ratio Definitions
(Dollars in thousands, except per share amounts)
(Unaudited)
Reconciliation of Tangible Assets and Tangible Shareholders' Equity to
Total Assets and Total Shareholders' Equity:
Quarter ended Year to Date
------------- ------------
9/30/2017 6/30/2017 3/31/2017 12/31/2016 9/30/2016 9/30/017 9/30/2016
--------- --------- --------- ---------- --------- -------- ---------
Tangible assets
Total assets $14,760,394 $14,843,130 $14,866,054 $14,724,388 $14,611,483 $14,760,394 $14,611,483
Less: Goodwill 300,798 300,798 300,798 300,798 294,901 300,798 294,901
Other identifiable intangible assets 18,860 19,854 20,865 21,894 19,908 18,860 19,908
Total tangible assets $14,440,736 $14,522,478 $14,544,391 $14,401,696 $14,296,674 $14,440,736 $14,296,674
Tangible shareholders' equity
Total shareholders' equity $1,700,502 $1,691,832 $1,702,389 $1,723,883 $1,724,104 $1,700,502 $1,724,104
Less: Goodwill 300,798 300,798 300,798 300,798 294,901 300,798 294,901
Other identifiable intangible assets 18,860 19,854 20,865 21,894 19,908 18,860 19,908
Total tangible shareholders' equity $1,380,844 $1,371,180 $1,380,726 $1,401,191 $1,409,295 $1,380,844 $1,409,295
Total average assets $14,710,245 $14,741,811 $14,832,260 $14,655,360 $14,366,759 $14,760,991 $14,083,108
Total shares of common stock outstanding 90,329,896 91,022,729 92,344,409 93,696,687 94,074,740 90,329,896 94,074,740
Average shares outstanding-diluted 91,099,770 91,530,552 93,829,400 93,966,392 94,563,833 92,157,392 94,617,389
Tangible shareholders' equity to tangible assets (1) 9.56% 9.44% 9.49% 9.73% 9.86% 9.56% 9.86%
Return on tangible equity (2) 11.36% 11.08% 11.19% 10.70% 10.68% 11.18% 9.01%
Operating return on tangible equity-excluding MSR (3) 11.36% 11.35% 10.82% 8.71% 10.36% 11.16% 10.50%
Operating return on average assets-excluding MSR (4) 1.07% 1.06% 1.01% 0.83% 1.02% 1.04% 1.05%
Operating return on average shareholders' equity-excluding MSR (5) 9.25% 9.27% 8.63% 7.08% 8.49% 9.05% 8.74%
Tangible book value per share (6) $15.29 $15.06 $14.95 $14.95 $14.98 $15.29 $14.98
Operating earnings per share (7) $0.43 $0.41 $0.40 $0.40 $0.40 $1.25 $1.10
Operating earnings per share-excluding MSR (8) $0.43 $0.42 $0.39 $0.33 $0.39 $1.25 $1.17
(1) Tangible shareholders' equity to tangible assets is defined by the Company as total shareholders' equity less goodwill and other identifiable intangible
assets, divided by the difference of total assets less goodwill and other identifiable intangible assets.
(2) Return on tangible equity is defined by the Company as annualized net income divided by tangible shareholders' equity.
(3) Operating return on tangible equity-excluding MSR is defined by the Company as annualized net operating income-excluding MSR divided by tangible
shareholders' equity.
(4) Operating return on average assets-excluding MSR is defined by the Company as annualized net operating income-excluding MSR divided by total average
assets.
(5) Operating return on average shareholders' equity-excluding MSR is defined by the Company as annualized net operating income-excluding MSR divided by
average shareholders' equity.
(6) Tangible book value per share is defined by the Company as tangible shareholders' equity divided by total shares of common stock outstanding.
(7) Operating earnings per share is defined by the Company as net operating income divided by average shares outstanding-diluted.
(8) Operating earnings per share-excluding MSR is defined by the Company as net operating income-excluding MSR divided by average shares outstanding-diluted.
Efficiency Ratio (tax equivalent) and Operating Efficiency Ratio-excluding MSR (tax equivalent) Definitions
The efficiency ratio (tax equivalent) and the operating efficiency ratio-excluding MSR (tax equivalent) are supplemental financial measures utilized in management's internal evaluation of the Company's use of resources and are not defined under GAAP. The efficiency ratio (tax equivalent) is calculated by dividing total noninterest expense by total revenue, which includes net
interest income plus noninterest income plus the tax equivalent adjustment. The operating efficiency ratio-excluding MSR (tax equivalent) excludes expense items otherwise disclosed as non-operating from total noninterest expense. In addition, the MSR valuation adjustment as well as securities gains and losses are excluded from total revenue.
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SOURCE BancorpSouth, Inc.
