BXS
$30.70
Bancorpsouth
$.20
.66%
Earnings Details
2nd Quarter June 2017
Wednesday, July 19, 2017 4:30:00 PM
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Summary

Bancorpsouth Beats

Bancorpsouth (BXS) reported 2nd Quarter June 2017 earnings of $0.42 per share on revenue of $195.0 million. The consensus earnings estimate was $0.40 per share on revenue of $187.9 million. The Earnings Whisper number was $0.41 per share. Revenue grew 3.1% on a year-over-year basis.

BancorpSouth Inc., is a financial holding company. The Company through its subsidiary conducts banking and financial services operations. It provides financial services to individuals and small-to-medium size businesses.

Results
Reported Earnings
$0.42
Earnings Whisper
$0.41
Consensus Estimate
$0.40
Reported Revenue
$195.0 Mil
Revenue Estimate
$187.9 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

BancorpSouth Announces Second Quarter 2017 Financial Results

BancorpSouth, Inc. (BXS) today announced financial results for the quarter ended June 30, 2017.

Highlights for the second quarter of 2017 included:

-- Net income of $37.9 million, or $0.41 per diluted share.

-- Generated net loan growth of $216.8 million, or 8.1 percent on an annualized basis.

-- Net interest margin increased to 3.52 percent.

Earnings were negatively impacted by a pre-tax mortgage servicing rights ("MSR") valuation adjustment of $1.5 million.

-- Net operating income - excluding MSR - of $38.8 million, or $0.42 per diluted share.

Credit quality remained stable; recorded provision for credit losses of $1.0 million for the quarter.

Total operating expense remained flat compared to the first quarter of 2017 and the second quarter of 2016 and operating efficiency ratio - excluding MSR - declined to 67.3 percent.

Repurchased 1,381,634 shares of outstanding common stock at a weighted average price of $29.64 per share.

The Company reported net income of $37.9 million, or $0.41 per diluted share, for the second quarter of 2017 compared with net income of $34.7 million, or $0.37 per diluted share, for the second quarter of 2016 and net income of $38.1 million, or $0.41 per diluted share, for the first quarter of 2017.

The Company reported net operating income - excluding MSR - of $38.8 million, or $0.42 per diluted share, for the second quarter of 2017 compared to $37.2 million, or $0.39 per diluted share, for the second quarter of 2016 and $36.9 million, or $0.39 per diluted share, for the first 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, MSR valuation adjustments, restructuring charges, merger-related expenses, industry-related legal settlements, and other one-time charges.

"We are pleased our second quarter results reflect continued earnings growth and improvement in many of our operating metrics," remarked Dan Rollins, Chairman and Chief Executive Officer. "While our second quarter deposit balances reflect an expected seasonal decline, our loan growth rebounded nicely after a slower first quarter. We reported net loan growth of $216.8 million, or 8.1 percent on an annualized basis, which resulted in loans and leases surpassing $11 billion for the first time in our Company’s history. Total operating expenses continue to remain flat, which resulted in a decline in the operating efficiency ratio - excluding MSR - to 67.3 percent, the lowest level we have achieved since 2010. Finally, we continue to be active in our share repurchase program, as we repurchased approximately 1.4 million shares during the quarter at a weighted average price of $29.64 per share."

"Additionally, our net interest margin increased to 3.52 percent from 3.46 percent for the first quarter of this year. The margin benefited primarily from increases in yields on our loan portfolio. We expect recent rate increases to continue to provide some benefit to our loan yields as our variable rate loans reach repricing dates over time."

Net Interest Revenue

Net interest revenue was $117.5 million for the second quarter of 2017, an increase of 4.6 percent from $112.3 million for the second quarter of 2016 and an increase of 2.5 percent from $114.6 million for the first quarter of 2017. The fully taxable equivalent net interest margin was 3.52 percent for the second quarter of 2017 compared to 3.56 percent for the second quarter of 2016 and 3.46 percent for the first quarter of 2017. Yields on loans and leases were 4.27 percent for the second quarter of 2017 compared with 4.20 percent for both the second quarter of 2016 and the first quarter of 2017, while yields on total interest earning assets were 3.80 percent for the second quarter of 2017 compared with 3.78 percent for the second quarter of 2016 and 3.70 percent for the first quarter of 2017. The average cost of deposits was 0.25 percent for the second quarter of 2017 compared to 0.21 percent for the second quarter of 2016 and 0.23 percent for the first quarter of 2017.

Asset, Deposit and Loan Activity

Total assets were $14.8 billion at June 30, 2017 compared with $14.1 billion at June 30, 2016. Loans and leases, net of unearned income, were $11.0 billion at June 30, 2017 compared with $10.6 billion at June 30, 2016.

Total deposits were $11.9 billion at June 30, 2017 compared with $11.4 billion at June 30, 2016. Time deposits decreased $57.3 million, or 3.1 percent, at June 30, 2017 compared to June 30, 2016. Over the same time period, interest bearing demand deposits increased $256.9 million, or 5.3 percent, while noninterest bearing demand deposits increased $257.0 million, or 8.2 percent, and savings deposits increased $117.4 million, or 7.8 percent.

Provision for Credit Losses and Allowance for Credit Losses

Earnings for the second quarter reflect a provision for credit losses of $1.0 million, compared to a provision of $2.0 million for the second quarter of 2016 and a provision of $1.0 million for the first quarter of 2017. Net charge-offs for the second quarter of 2017 were $4.6 million, compared with net charge-offs of $1.6 million for the second quarter of 2016 and net recoveries of $0.5 million for the first quarter of 2017. The allowance for credit losses was $121.6 million, or 1.10 percent of net loans and leases, at June 30, 2017, compared with $126.9 million, or 1.20 percent of net loans and leases, at June 30, 2016 and $125.2 million, or 1.16 percent of net loans and leases, at March 31, 2017. The increase in net charge-offs and the decline in the allowance for credit losses for the second quarter of 2017 were primarily the result of charge-offs associated with loans for which a specific reserve was recorded in previous quarters.

Total non-performing assets ("NPAs") were $79.4 million, or 0.72 percent of net loans and leases, at June 30, 2017 compared with $94.9 million, or 0.90 percent of net loans and leases, at June 30, 2016, and $90.0 million, or 0.83 percent of net loans and leases, at March 31, 2017. Other real estate owned was $7.7 million at June 30, 2017 compared with $14.7 million at June 30, 2016 and $8.5 million at March 31, 2017.

Noninterest Revenue

Noninterest revenue was $68.1 million for the second quarter of 2017, compared with $68.5 million for the second quarter of 2016 and $70.9 million for the first quarter of 2017. These results included a negative MSR valuation adjustment of $1.5 million for the second quarter of 2017 compared with a negative MSR valuation adjustment of $4.1 million for the second quarter of 2016 and a positive MSR valuation adjustment of $0.9 million for the first 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 $7.6 million for the second quarter of 2017, compared with $12.0 million for the second quarter of 2016 and $8.1 million for the first quarter of 2017. Mortgage origination volume for the second quarter of 2017 was $385.9 million, compared with $462.6 million for the second quarter of 2016 and $287.8 million for the first quarter of 2017.

Credit and debit card fee revenue was $9.6 million for the second quarter of 2017, compared with $9.5 million for the second quarter of 2016 and $8.9 million for the first quarter of 2017. Deposit service charge revenue was $9.7 million for the second quarter of 2017, compared with $11.0 million for the second quarter of 2016 and $9.7 million for the first quarter of 2017. Insurance commission revenue was $31.1 million for the second quarter of 2017, compared with $28.8 million for the second quarter of 2016 and $32.9 million for the first quarter of 2017. Wealth management revenue was $5.3 million for the second quarter of 2017, compared with $5.3 million for the second quarter of 2016 and $5.2 million for the first quarter of 2017.

Noninterest Expense

Noninterest expense for the second quarter of 2017 was $127.6 million, compared with $127.6 million for the second quarter of 2016 and $127.1 million for the first quarter of 2017. Salaries and employee benefits expense was $81.6 million for the second quarter of 2017 compared to $80.7 million for the second quarter of 2016 and $81.4 million for the first quarter of 2017. Occupancy expense was $10.5 million for the second quarter of 2017, compared with $10.1 million for the second quarter of 2016 and $10.3 million for the first quarter of 2017. Other noninterest expense was $29.8 million for the second quarter of 2017, compared to $30.9 million for the second quarter of 2016 and $29.4 million for the first 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 11.40 percent at June 30, 2017, compared with 12.12 percent at June 30, 2016 and 11.45 percent at March 31, 2017. The ratio of tangible shareholders’ equity to tangible assets was 9.44 percent at June 30, 2017, compared with 10.11 percent at June 30, 2016 and 9.49 percent at March 31, 2017.

During the second quarter of 2017, the Company repurchased 1,381,634 shares of its outstanding common stock at a weighted average price of $29.64 per share. During the first quarter of 2017, the Company repurchased 1,613,691 shares at a weighted average price of $30.62 per share. As of June 30, 2017, the Company had 3,016,615 remaining shares available for repurchase under its current share repurchase authorization, which expires on December 29, 2017.

Estimated regulatory capital ratios at June 30, 2017 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 11.90 percent at June 30, 2017 and total risk-based capital of 12.91 percent, compared with required minimum levels of 8 percent and 10 percent, respectively, in order to qualify for "well capitalized" classification.

Transactions

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.

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 June 30, 2017, Central Community Corporation, on a consolidated basis, reported total assets of $1.4 billion, total loans of $705.8 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 Company and Central Community Corporation entered into an extension of the merger 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.

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 June 30, 2017, OIB, on a consolidated basis, reported total assets of $734.6 million, total loans of $496.1 million and total deposits of $614.2 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 Company and Ouachita Bancshares Corp. entered into an extension of the merger 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.

For the most recent information regarding the status of the merger with Central Community Corporation and the status of the merger with Ouachita Bancshares Corp. in our periodic and current reports, please refer to the Form 8-K that was previously filed with the SEC on October 14, 2016.

Summary

Rollins concluded, "We continue to see steady improvement quarter after quarter as we grow our Company while keeping expenses flat. We are pleased with the success of several of our business development teams during the second quarter. We reported meaningful net loan growth, our mortgage team originated over $385 million in mortgage loans during the quarter, and our insurance team reported growth in property and casualty commissions and life and health commissions despite continued industry headwinds. While our story has seemed repetitive for some time now, I’m excited about our opportunity to continue to improve performance and enhance shareholder value going forward."

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 second quarter 2017 results on July 20, 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, Inc.

BancorpSouth, Inc. (BXS) is a financial holding company headquartered in Tupelo, Mississippi, with $14.8 billion in assets. BancorpSouth Bank, a wholly-owned subsidiary of BancorpSouth, Inc., 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 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 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
6/30/2017
3/31/2017
12/31/2016
9/30/2016
6/30/2016
6/30/2017
6/30/2016
Earnings Summary:
Interest revenue
$
126,855
$
122,926
$
123,444
$
122,340
$
119,423
$
249,781
$
237,395
Interest expense
9,377
8,315
8,057
7,750
7,107
17,692
13,920
Net interest revenue
117,478
114,611
115,387
114,590
112,316
232,089
223,475
Provision for credit losses
1,000
1,000
1,000
-
2,000
2,000
3,000
Net interest revenue, after provision
for credit losses
116,478
113,611
114,387
114,590
110,316
230,089
220,475
Noninterest revenue
68,130
70,869
71,975
69,673
68,526
138,999
133,253
Noninterest expense
127,553
127,109
130,519
128,317
127,561
254,662
269,073
Income before income taxes
57,055
57,371
55,843
55,946
51,281
114,426
84,655
Income tax expense
19,166
19,278
18,173
18,129
16,589
38,444
27,414
Net income
$
37,889
$
38,093
$
37,670
$
37,817
$
34,692
$
75,982
$
57,241
Balance Sheet - Period End Balances
Total assets
$
14,843,130
$
14,866,054
$
14,724,388
$
14,611,483
$
14,137,160
$
14,843,130
$
14,137,160
Total earning assets
13,674,436
13,757,920
13,549,407
13,483,345
12,977,030
13,674,436
12,977,030
Total securities
2,421,295
2,540,887
2,531,676
2,468,199
2,103,883
2,421,295
2,103,883
Loans and leases, net of unearned income
11,018,540
10,801,694
10,811,991
10,658,761
10,575,978
11,018,540
10,575,978
Allowance for credit losses
121,561
125,196
123,736
125,887
126,935
121,561
126,935
Total deposits
11,938,296
12,042,845
11,688,141
11,590,059
11,364,367
11,938,296
11,364,367
Long-term debt
230,000
530,000
530,000
563,495
365,588
230,000
365,588
Total shareholders’ equity
1,691,832
1,702,389
1,723,883
1,724,104
1,713,043
1,691,832
1,713,043
Balance Sheet - Average Balances
Total assets
$
14,741,811
$
14,832,260
$
14,655,360
$
14,366,759
$
14,027,786
$
14,786,784
$
13,939,723
Total earning assets
13,636,415
13,715,612
13,525,284
13,265,266
12,963,056
13,675,795
12,896,528
Total securities
2,497,108
2,507,701
2,479,008
2,186,889
2,069,058
2,502,375
2,053,399
Loans and leases, net of unearned income
10,883,102
10,820,486
10,737,802
10,601,481
10,513,732
10,851,967
10,443,328
Total deposits
11,902,415
11,941,851
11,700,213
11,509,764
11,437,422
11,922,024
11,434,451
Long-term debt
398,132
530,000
534,141
430,886
219,434
463,702
143,592
Total shareholders’ equity
1,680,053
1,731,931
1,724,871
1,719,503
1,690,906
1,705,849
1,679,686
Nonperforming Assets:
Non-accrual loans and leases
$
63,585
$
74,439
$
71,812
$
70,725
$
68,638
$
63,585
$
68,638
Loans and leases 90+ days past due, still accruing
1,793
3,063
3,983
2,255
1,875
1,793
1,875
Restructured loans and leases, still accruing
6,303
4,060
26,047
17,936
9,687
6,303
9,687
Non-performing loans (NPLs)
71,681
81,562
101,842
90,916
80,200
71,681
80,200
Other real estate owned
7,704
8,458
7,810
11,391
14,658
7,704
14,658
Non-performing assets (NPAs)
$
79,385
$
90,020
$
109,652
$
102,307
$
94,858
$
79,385
$
94,858
Financial Ratios and Other Data:
Return on average assets
1.03%
1.04%
1.02%
1.05%
0.99%
1.04%
0.83%
Operating return on average assets-excluding MSR*
1.06%
1.01%
0.83%
1.02%
1.07%
1.03%
1.07%
Return on average shareholders’ equity
9.05%
8.92%
8.69%
8.75%
8.25%
8.98%
6.85%
Operating return on average shareholders’ equity-excluding MSR*
9.27%
8.63%
7.08%
8.49%
8.84%
8.94%
8.87%
Return on tangible equity*
11.08%
11.19%
10.70%
10.68%
9.99%
11.17%
8.24%
Operating return on tangible equity-excluding MSR*
11.35%
10.82%
8.71%
10.36%
10.70%
11.13%
10.66%
Noninterest income to average assets
1.85%
1.94%
1.95%
1.93%
1.96%
1.90%
1.92%
Noninterest expense to average assets
3.47%
3.48%
3.54%
3.55%
3.66%
3.47%
3.88%
Net interest margin-fully taxable equivalent
3.52%
3.46%
3.46%
3.51%
3.56%
3.49%
3.55%
Net interest rate spread
3.40%
3.35%
3.36%
3.41%
3.47%
3.38%
3.46%
Efficiency ratio (tax equivalent)*
67.90%
67.71%
68.79%
68.72%
69.58%
67.80%
74.37%
Operating efficiency ratio-excluding MSR (tax equivalent)*
67.33%
68.43%
73.14%
69.39%
68.01%
67.87%
68.31%
Loan/deposit ratio
92.30%
89.69%
92.50%
91.96%
93.06%
92.30%
93.06%
Price to earnings multiple (avg)
18.83
19.15
22.02
18.86
19.07
18.83
19.07
Market value to book value
164.07%
164.09%
168.76%
126.59%
125.23%
164.07%
125.23%
Market value to book value (avg)
161.24%
166.39%
145.61%
129.73%
124.62%
163.14%
120.37%
Market value to tangible book value
202.52%
202.32%
207.63%
154.87%
153.53%
202.52%
153.53%
Market value to tangible book value (avg)
199.07%
205.16%
179.14%
158.71%
152.78%
201.29%
147.57%
Headcount FTE
3,989
3,973
3,998
3,981
4,028
3,989
4,028
*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) 0.17%
(0.02%)
0.12%
0.04%
0.06%
0.08%
0.05%
Provision for credit losses to average loans and leases (annualized)
0.04%
0.04%
0.04%
0.00%
0.08%
0.04%
0.06%
Allowance for credit losses to net loans and leases
1.10%
1.16%
1.14%
1.18%
1.20%
1.10%
1.20%
Allowance for credit losses to non-performing loans and leases
169.59%
153.50%
121.50%
138.47%
158.27%
169.59%
158.27%
Allowance for credit losses to non-performing assets
153.13%
139.08%
112.84%
123.05%
133.82%
153.13%
133.82%
Non-performing loans and leases to net loans and leases
0.65%
0.76%
0.94%
0.85%
0.76%
0.65%
0.76%
Non-performing assets to net loans and leases
0.72%
0.83%
1.01%
0.96%
0.90%
0.72%
0.90%
Equity Ratios:
Total shareholders’ equity to total assets
11.40%
11.45%
11.71%
11.80%
12.12%
11.40%
12.12%
Tangible shareholders’ equity to tangible assets*
9.44%
9.49%
9.73%
9.86%
10.11%
9.44%
10.11%
Capital Adequacy:
Common
Equity Tier 1 capital
11.90%
12.16%
12.23%
12.13%
12.17%
11.90%
12.17%
Tier 1 capital
11.90%
12.16%
12.34%
12.32%
12.37%
11.90%
12.37%
Total capital
12.91%
13.21%
13.38%
13.37%
13.45%
12.91%
13.45%
Tier 1 leverage capital
9.93%
9.95%
10.32%
10.53%
10.66%
9.93%
10.66%
Estimated for current quarter
Common Share Data:
Basic earnings per share
$
0.41 $
0.41 $
0.40 $
0.40 $
0.37 $
0.82 $
0.61
Diluted earnings per share
0.41
0.41
0.40
0.40
0.37
0.82
0.60
Operating earnings per share*
0.41
0.40
0.40
0.40
0.37
0.81
0.70
Operating earnings per share- excluding MSR*
0.42
0.39
0.33
0.39
0.39
0.82
0.78
Cash dividends per share
0.13
0.13
0.13
0.13
0.10
0.25
0.20
Book value per share
18.59
18.44
18.40
18.33
18.12
18.59
18.12
Tangible book value per share*
15.06
14.95
14.95
14.98
14.78
15.06
14.78
Market value per share (last)
30.50
30.25
31.05
23.20
22.69
30.50
22.69
Market value per share (high)
31.85
32.40
31.75
25.09
24.18
32.40
24.18
Market value per share (low)
28.20
28.10
22.23
20.98
20.19
28.10
18.69
Market value per share (avg)
29.98
30.68
26.79
23.78
22.58
30.32
21.81
Dividend payout ratio
30.48%
30.73%
31.11%
31.17%
22.58%
30.44%
32.99%
Total shares outstanding
91,022,729
92,344,409
93,696,687
94,074,740
94,546,091
91,022,729
94,546,091
Average shares outstanding - basic
91,366,309
93,642,848
93,740,626
94,303,916
94,461,025
92,504,580
94,415,118
Average shares outstanding - diluted
91,530,552
93,829,400
93,966,392
94,563,833
94,694,795
92,686,203
94,644,168
Yield/Rate:
(Taxable equivalent basis)
Loans, loans held for sale, and leases net of unearned income
4.27%
4.20%
4.18%
4.20%
4.20%
4.24%
4.19%
Available-for-sale securities:
Taxable
1.37%
1.35%
1.31%
1.33%
1.40%
1.36%
1.40%
Tax-exempt
5.26%
5.29%
5.29%
5.32%
5.36%
5.28%
5.34%
Short-term investments
0.88%
0.76%
0.41%
0.52%
0.39%
0.80%
0.36%
Total interest earning assets and revenue
3.80%
3.70%
3.70%
3.74%
3.78%
3.75%
3.77%
Deposits
0.25%
0.23%
0.23%
0.22%
0.21%
0.24%
0.23%
Demand - interest bearing
0.25%
0.22%
0.20%
0.19%
0.18%
0.23%
0.17%
Savings
0.12%
0.12%
0.12%
0.12%
0.12%
0.12%
0.12%
Other time
0.81%
0.79%
0.79%
0.78%
0.75%
0.80%
0.74%
Short-term borrowings
0.69%
0.31%
0.16%
0.15%
0.15%
0.53%
0.14%
Total interest bearing deposits & short-term borrowings
0.37%
0.32%
0.31%
0.30%
0.29%
0.34%
0.28%
Junior subordinated debt
N/A
3.29%
3.53%
3.27%
3.23%
3.29%
3.20%
Long-term debt
1.01%
0.87%
0.73%
0.83%
1.21%
0.93%
1.64%
Total interest bearing liabilities and expense
0.40%
0.35%
0.34%
0.34%
0.32%
0.37%
0.31%
Interest bearing liabilities to interest earning assets
69.68%
70.24%
69.43%
69.33%
69.47%
69.96%
69.61%
Net interest tax equivalent adjustment
$
2,248
$
2,261
$
2,371
$
2,462
$
2,493
$
4,509
$
5,051
*Denotes non-GAAP financial measure.
Refer to related disclosure and reconciliation on pages 19 and 20.
BancorpSouth, Inc.
Consolidated Balance Sheets
(Unaudited)
Jun-17
Mar-17
Dec-16
Sep-16
Jun-16
(Dollars in thousands)
Assets
Cash and due from banks
$
178,376 $
147,684 $
184,152 $
172,782 $
186,381
Interest bearing deposits with other banks
49,680
253,738
38,813
151,944
86,472
Available-for-sale securities, at fair value
2,421,295
2,540,887
2,531,676
2,468,199
2,103,883
Loans and leases
11,037,808
10,822,568
10,835,512
10,685,166
10,604,547
Less:
Unearned income
19,268
20,874
23,521
26,405
28,569
Allowance for credit losses
121,561
125,196
123,736
125,887
126,935
Net loans and leases
10,896,979
10,676,498
10,688,255
10,532,874
10,449,043
Loans held for sale
184,921
161,600
166,927
204,441
210,698
Premises and equipment, net
306,863
305,250
305,561
305,245
305,694
Accrued interest receivable
40,716
42,329
42,005
41,583
39,645
Goodwill
300,798
300,798
300,798
294,901
294,901
Other identifiable intangibles
19,854
20,865
21,894
19,908
20,831
Bank owned life insurance
260,228
258,518
258,648
257,015
255,240
Other real estate owned
7,704
8,458
7,810
11,391
14,658
Other assets
175,716
149,429
177,849
151,200
169,714
Total Assets
$
14,843,130
$
14,866,054
$
14,724,388
$
14,611,483
$
14,137,160
Liabilities
Deposits:
Demand:
Noninterest bearing
$
3,390,428
$
3,401,348
$
3,250,537
$
3,308,361
$
3,133,460
Interest bearing
5,095,570
5,182,011
5,034,470
4,877,482
4,838,704
Savings
1,630,123
1,627,621
1,561,819
1,533,401
1,512,694
Other time
1,822,175
1,831,865
1,841,315
1,870,815
1,879,509
Total deposits
11,938,296
12,042,845
11,688,141
11,590,059
11,364,367
Securities sold under agreement to repurchase 399,815
375,832
454,002
468,969
415,949
Federal funds purchased
and other short-term borrowing
365,000
-
92,000
-
-
Accrued interest payable
4,259
4,109
3,975
4,107
3,727
Junior subordinated debt securities
-
-
12,888
23,198
23,198
Long-term debt
230,000
530,000
530,000
563,495
365,588
Other liabilities
213,928
210,879
219,499
237,551
251,288
Total Liabilities
13,151,298
13,163,665
13,000,505
12,887,379
12,424,117
Shareholders’ Equity
Common stock
227,557
230,861
234,242
235,187
236,365
Capital surplus
191,940
226,204
271,292
278,973
286,994
Accumulated other comprehensive loss
(49,861)
(50,360)
(50,937)
(33,549)
(27,587)
Retained earnings
1,322,196
1,295,684
1,269,286
1,243,493
1,217,271
Total Shareholders’ Equity
1,691,832
1,702,389
1,723,883
1,724,104
1,713,043
Total Liabilities & Shareholders’ Equity
$
14,843,130
$
14,866,054
$
14,724,388
$
14,611,483
$
14,137,160
BancorpSouth, Inc.
Consolidated Average Balance Sheets
(Unaudited)
Jun-17
Mar-17
Dec-16
Sep-16
Jun-16
(Dollars in thousands)
Assets
Cash and due from banks
$
156,387 $
162,696 $
171,791 $
157,233 $
117,193
Interest bearing deposits with other banks
117,414
258,502
165,805
311,545
237,635
Available-for-sale securities, at fair value
2,497,108
2,507,701
2,479,008
2,186,889
2,069,058
Loans and leases
10,903,524
10,843,069
10,763,314
10,629,522
10,543,795
Less:
Unearned income
20,422
22,583
25,512
28,041
30,063
Allowance for credit losses
125,578
124,662
125,526
126,820
126,103
Net loans and leases
10,757,524
10,695,824
10,612,276
10,474,661
10,387,629
Loans held for sale
138,792
128,923
142,669
165,351
142,632
Premises and equipment, net
306,483
305,637
305,994
305,707
307,600
Accrued interest receivable
38,702
38,774
38,648
38,125
36,887
Goodwill
300,798
300,798
296,888
294,901
292,620
Other identifiable intangibles
20,218
21,236
20,303
20,248
19,796
Bank owned life insurance
259,182
257,669
257,397
255,967
254,191
Other real estate owned
7,860
8,154
9,084
13,664
15,666
Other assets
141,343
146,346
155,497
142,468
146,879
Total Assets
$
14,741,811
$
14,832,260
$
14,655,360
$
14,366,759
$
14,027,786
Liabilities
Deposits:
Demand:
Noninterest bearing
$
3,362,801
$
3,272,876
$
3,344,632
$
3,221,539
$
3,122,153
Interest bearing
5,079,388
5,244,069
4,951,906
4,886,920
4,957,827
Savings
1,626,996
1,587,725
1,543,542
1,525,016
1,510,250
Other time
1,833,230
1,837,181
1,860,133
1,876,289
1,847,192
Total deposits
11,902,415
11,941,851
11,700,213
11,509,764
11,437,422
Securities sold under agreement to repurchase 412,825
414,272
475,669
454,826
443,340
Federal funds purchased
and other short-term borrowing
151,352
19,545
3,924
11
4,275
Accrued interest payable
4,028
3,867
4,031
3,950
3,509
Junior subordinated debt securities
-
1,146
21,181
23,198
23,198
Long-term debt
398,132
530,000
534,141
430,886
219,434
Other liabilities
193,006
189,648
191,330
224,621
205,702
Total Liabilities
13,061,758
13,100,329
12,930,489
12,647,256
12,336,880
Shareholders’ Equity
Common stock
228,322
234,285
234,323
235,860
236,176
Capital surplus
199,115
265,685
271,900
283,437
284,818
Accumulated other comprehensive loss
(49,185)
(50,616)
(40,454)
(29,743)
(32,820)
Retained earnings
1,301,801
1,282,577
1,259,102
1,229,949
1,202,732
Total Shareholders’ Equity
1,680,053
1,731,931
1,724,871
1,719,503
1,690,906
Total Liabilities & Shareholders’ Equity
$
14,741,811
$
14,832,260
$
14,655,360
$
14,366,759
$
14,027,786
BancorpSouth, Inc.
Consolidated Condensed Statements of Income
(Dollars in thousands, except per share data)
(Unaudited)
Quarter Ended
Year to Date
Jun-17
Mar-17
Dec-16
Sep-16
Jun-16
Jun-17
Jun-16
INTEREST REVENUE:
Loans and leases
$
115,286
$
111,498
$
112,189
$
111,605
$
109,078
$ 226,784
$ 216,883
Deposits with other banks
256
485
169
409
229
741
492
Available-for-sale securities:
Taxable
7,509
7,350
7,105
6,189
6,009
14,859
11,897
Tax-exempt
2,562
2,581
2,771
2,898
2,924
5,143
5,956
Loans held for sale
1,242
1,012
1,210
1,239
1,183
2,254
2,167
Total interest revenue
126,855
122,926
123,444
122,340
119,423
249,781
237,395
INTEREST EXPENSE:
Interest bearing demand
3,204
2,786
2,514
2,361
2,208
5,990
4,371
Savings
483
472
470
462
451
955
894
Other time
3,725
3,582
3,711
3,661
3,436
7,307
6,790
Federal funds purchased and securities sold
under agreement to repurchase
509
322
190
173
159
831
299
Short-term and long-term debt
1,456
1,142
985
902
665
2,598
1,195
Junior subordinated debt
-
9
187
190
187
9
370
Other
-
2
-
1
1
2
1
Total interest expense
9,377
8,315
8,057
7,750
7,107
17,692
13,920
Net interest revenue
117,478
114,611
115,387
114,590
112,316
232,089
223,475
Provision for credit losses
1,000
1,000
1,000
-
2,000
2,000
3,000
Net interest revenue, after provision for
credit losses
116,478
113,611
114,387
114,590
110,316
230,089
220,475
NONINTEREST REVENUE:
Mortgage banking
6,134
8,990
16,803
11,087
7,886
15,124
9,716
Credit card, debit card and merchant fees
9,565
8,903
9,262
9,292
9,495
18,468
18,456
Deposit service charges
9,706
9,689
9,956
11,313
11,018
19,395
22,032
Security gains, net
23
1,071
39
1
86
1,094
88
Insurance commissions
31,126
32,940
25,709
28,194
28,803
64,066
62,052
Wealth management
5,275
5,174
5,401
5,312
5,347
10,449
10,456
Other
6,301
4,102
4,805
4,474
5,891
10,403
10,453
Total noninterest revenue
68,130
70,869
71,975
69,673
68,526
138,999
133,253
NONINTEREST EXPENSE:
Salaries and employee benefits
81,597
81,386
80,850
80,884
80,675
162,983
162,354
Occupancy, net of rental income
10,455
10,302
10,294
10,412
10,109
20,757
20,382
Equipment
3,438
3,568
3,563
3,423
3,295
7,006
7,060
Deposit insurance assessments
2,261
2,484
1,818
3,227
2,582
4,745
4,870
Regulatory settlement
-
-
-
-
-
-
10,277
Other
29,802
29,369
33,994
30,371
30,900
59,171
64,130
Total noninterest expense
127,553
127,109
130,519
128,317
127,561
254,662
269,073
Income before income taxes
57,055
57,371
55,843
55,946
51,281
114,426
84,655
Income tax expense
19,166
19,278
18,173
18,129
16,589
38,444
27,414
Net income
$
37,889
$
38,093
$
37,670
$
37,817
$
34,692
$
75,982
$
57,241
Net income per share: Basic
$
0.41
$
0.41
$
0.40
$
0.40
$
0.37
$
0.82
$
0.61
Diluted
$
0.41
$
0.41
$
0.40
$
0.40
$
0.37
$
0.82
$
0.60
BancorpSouth, Inc.
Selected Loan Data
(Dollars in thousands)
(Unaudited)
Quarter Ended
Jun-17
Mar-17
Dec-16
Sep-16
Jun-16
LOAN AND LEASE PORTFOLIO:
Commercial and industrial
$
1,566,459
$
1,536,527
$
1,612,295
$
1,616,152
$
1,698,089
Real estate
Consumer mortgages
2,776,213
2,675,672
2,643,966
2,611,387
2,549,989
Home equity
624,868
626,488
628,846
622,566
614,686
Agricultural
245,646
240,534
245,377
242,171
251,566
Commercial and industrial-owner occupied
1,795,321
1,801,613
1,764,265
1,668,477
1,644,618
Construction, acquisition and development
1,156,901
1,136,827
1,157,248
1,121,386
1,021,218
Commercial real estate
2,341,633
2,271,542
2,237,719
2,240,717
2,254,653
Credit cards
104,169
103,813
109,656
107,447
108,101
All other
407,330
408,678
412,619
428,458
433,058
Total loans
$ 11,018,540
$ 10,801,694
$ 10,811,991
$
10,658,761
$ 10,575,978
ALLOWANCE FOR CREDIT LOSSES:
Balance, beginning of period
$
125,196
$
123,736
$
125,887
$
126,935
$
126,506
Loans and leases charged-off:
Commercial and industrial
(3,773)
(384)
(2,483)
(1,180)
(748)
Real estate
Consumer mortgages
(522)
(596)
(905)
(595)
(477)
Home equity
(125)
(459)
(873)
(237)
(224)
Agricultural
(6)
(44)
-
(89)
(10)
Commercial and industrial-owner occupied
(1,460)
(404)
(20)
(261)
(660)
Construction, acquisition and development
(54)
(30)
(10)
(5)
(280)
Commercial real estate
(1)
(19)
-
(14)
(870)
Credit cards
(781)
(838)
(815)
(696)
(614)
All other
(591)
(559)
(580)
(713)
(417)
Total loans charged-off
(7,313)
(3,333)
(5,686)
(3,790)
(4,300)
Recoveries:
Commercial and industrial
1,034
490
1,019
263
339
Real estate
Consumer mortgages
339
625
413
327
499
Home equity
110
356
71
109
246
Agricultural
34
41
15
28
96
Commercial and industrial-owner occupied
481
193
201
117
101
Construction, acquisition and development
208
1,324
195
382
524
Commercial real estate
75
69
176
1,043
509
Credit cards
205
249
208
262
199
All other
192
446
237
211
216
Total recoveries
2,678
3,793
2,535
2,742
2,729
Net recoveries (charge-offs)
(4,635)
460
(3,151)
(1,048)
(1,571)
Provision charged to operating expense
1,000
1,000
1,000
-
2,000
Balance, end of period
$
121,561
$
125,196
$
123,736
$
125,887
$
126,935
Average loans for period
$ 10,883,102
$ 10,820,486
$ 10,737,802
$ 10,601,481
$ 10,513,732
Ratio:
Net (recoveries) charge-offs to average loans (annualized) 0.17%
(0.02%)
0.12%
0.04%
0.06%
BancorpSouth, Inc.
Selected Loan Data
(Dollars in thousands)
(Unaudited)
Quarter Ended
Jun-17
Mar-17
Dec-16
Sep-16
Jun-16
NON-PERFORMING ASSETS
NON-PERFORMING LOANS AND LEASES:
Nonaccrual Loans and Leases
Commercial and industrial
$
9,988
$
13,959
$
13,679
$
11,659
$
8,675
Real estate
Consumer mortgages
24,690
21,543
21,084
20,196
19,309
Home equity
3,183
3,157
3,817
3,721
2,734
Agricultural
6,172
5,180
1,546
1,194
1,107
Commercial and industrial-owner occupied
10,215
15,135
10,791
11,983
16,021
Construction, acquisition and development
2,223
1,466
7,022
6,939
6,086
Commercial real estate
6,418
13,638
13,402
14,793
14,197
Credit cards
122
87
161
121
159
All other
574
274
310
119
350
Total nonaccrual loans and leases
$
63,585
$
74,439
$
71,812
$
70,725
$
68,638
Loans and Leases 90+ Days Past Due, Still Accruing:
1,793
3,063
3,983
2,255
1,875
Restructured Loans and Leases, Still Accruing
6,303
4,060
26,047
17,936
9,687
Total non-performing loans and leases
71,681
81,562
101,842
90,916
80,200
OTHER REAL ESTATE OWNED:
7,704
8,458
7,810
11,391
14,658
Total Non-performing Assets
$
79,385
$
90,020
$
109,652
$
102,307
$
94,858
Additions to Nonaccrual Loans and Leases During the Quarter
$
17,020
$
23,348
$
16,007
$
17,319
$
10,553
Loans and Leases 30-89 Days Past Due, Still Accruing:
Commercial and industrial
$
3,304
$
4,083
$
3,449
$
6,736
$
3,748
Real estate
Consumer mortgages
12,395
10,149
14,490
15,443
15,784
Home equity
2,590
1,720
3,072
3,854
2,842
Agricultural
197
364
1,283
616
367
Commercial and industrial-owner occupied
2,228
1,949
2,120
1,712
2,854
Construction, acquisition and development
2,639
3,306
1,344
1,272
1,137
Commercial real estate
1,183
2,631
653
15,221
3,776
Credit cards
705
800
726
774
677
All other
1,203
776
673
1,089
712
Total Loans and Leases 30-89 days past due, still accruing
$
26,444
$
25,778
$
27,810
$
46,717
$
31,897
Credit Quality Ratios:
Provision for credit losses to average loans and leases (annualized) 0.04%
0.04%
0.04%
0.00%
0.08%
Allowance for credit losses to net loans and leases
1.10%
1.16%
1.14%
1.18%
1.20%
Allowance for credit losses to non-performing loans and leases
169.59%
153.50%
121.50%
138.47%
158.27%
Allowance for credit losses to non-performing assets
153.13%
139.08%
112.84%
123.05%
133.82%
Non-performing loans and leases to net loans and leases
0.65%
0.76%
0.94%
0.85%
0.76%
Non-performing assets to net loans and leases
0.72%
0.83%
1.01%
0.96%
0.90%
Selected Loan Data
(Dollars in thousands)
(Unaudited)
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
March 31, 2017
Special
Pass
Mention
Substandard
Doubtful
Loss
Impaired
Total
LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE:
Commercial and industrial
$
1,489,753
$
-
$
34,936
$
-
$
-
$
11,838
$
1,536,527
Real estate
Consumer mortgages
2,611,576
517
62,045
258
-
1,276
2,675,672
Home equity
615,753
-
9,881
-
-
854
626,488
Agricultural
227,902
-
8,899
141
-
3,592
240,534
Commercial and industrial-owner occupied
1,734,995
3,663
50,908
-
-
12,047
1,801,613
Construction, acquisition and development
1,124,929
-
11,621
-
-
277
1,136,827
Commercial real estate
2,216,915
-
42,614
-
-
12,013
2,271,542
Credit cards
103,813
-
-
-
-
-
103,813
All other
402,287
-
6,291
100
-
-
408,678
Total loans
$ 10,527,923
$
4,180
$
227,195
$
499
$
-
$
41,897
$ 10,801,694
BancorpSouth, Inc.
Geographical Information
(Dollars in thousands)
(Unaudited)
June 30, 2017
Alabama
and Florida
Panhandle
Arkansas
Louisiana
Mississippi
Missouri
Tennessee
Texas
Other
Total
LOAN AND LEASE PORTFOLIO:
Commercial and industrial
$
141,372
$
193,526
$
194,235
$
572,109
$
91,371
$
110,161
$
207,777
$
55,908
$
1,566,459
Real estate
Consumer mortgages
374,392
322,148
239,660
867,821
93,572
305,685
539,131
33,804
2,776,213
Home equity
96,296
45,630
69,035
232,247
21,535
141,970
16,271
1,884
624,868
Agricultural
8,244
83,788
25,615
67,496
8,163
13,577
38,757
6
245,646
Commercial and industrial-owner occupied
210,072
195,859
212,839
718,767
46,545
157,145
254,094
-
1,795,321
Construction, acquisition and development 120,174
70,919
52,951
352,608
18,399
166,344
375,506
-
1,156,901
Commercial real estate
305,774
361,460
233,986
581,939
202,629
217,300
438,545
-
2,341,633
Credit cards
-
-
-
-
-
-
-
104,169
104,169
All other
51,849
40,196
24,271
215,870
3,411
21,951
43,433
6,349
407,330
Total loans
$ 1,308,173
$ 1,313,526
$ 1,052,592
$3,608,857
$
485,625
$ 1,134,133
$ 1,913,514
$
202,120
$ 11,018,540
NON-PERFORMING LOANS AND LEASES:
Commercial and industrial
$
380
$
887
$
1,482
$
5,637
$
1,250
$
93
$
1,364
$
112
$
11,205
Real estate
Consumer mortgages
927
3,763
1,177
12,824
218
1,725
4,748
1,095
26,477
Home equity
382
793
819
921
80
249
-
2
3,246
Agricultural
-
405
204
5,563
-
-
16
-
6,188
Commercial and industrial-owner occupied
1,178
2,860
839
6,178
1,067
503
662
-
13,287
Construction, acquisition and development 45
745
237
1,062
55
49
381
-
2,574
Commercial real estate
989
1,067
2,117
2,135
-
13
441
-
6,762
Credit cards
-
-
-
-
-
-
-
1,343
1,343
All other
25
-
-
551
-
17
6
-
599
Total loans
$
3,926
$
10,520
$
6,875
$
34,871
$
2,670
$
2,649
$
7,618
$
2,552
$
71,681
NON-PERFORMING LOANS AND LEASES
AS A PERCENTAGE OF OUTSTANDING:
Commercial and industrial
0.27%
0.46%
0.76%
0.99%
1.37%
0.08%
0.66%
0.20%
0.72%
Real estate
Consumer mortgages
0.25%
1.17%
0.49%
1.48%
0.23%
0.56%
0.88%
3.24%
0.95%
Home equity
0.40%
1.74%
1.19%
0.40%
0.37%
0.18%
0.00%
0.11%
0.52%
Agricultural
0.00%
0.48%
0.80%
8.24%
0.00%
0.00%
0.04%
0.00%
2.52%
Commercial and industrial-owner occupied
0.56%
1.46%
0.39%
0.86%
2.29%
0.32%
0.26%
N/A
0.74%
Construction, acquisition and development 0.04%
1.05%
0.45%
0.30%
0.30%
0.03%
0.10%
N/A
0.22%
Commercial real estate
0.32%
0.30%
0.90%
0.37%
0.00%
0.01%
0.10%
N/A
0.29%
Credit cards
N/A
N/A N/A
N/A N/A
N/A N/A
N/A N/A
N/A N/A
N/A
1.29%
1.29%
All other
0.05%
0.00%
0.00%
0.26%
0.00%
0.08%
0.01%
0.00%
0.15%
Total loans
0.30%
0.80%
0.65%
0.97%
0.55%
0.23%
0.40%
1.26%
0.65%
BancorpSouth, Inc.
Noninterest Revenue and Expense
(Dollars in thousands)
(Unaudited)
Quarter Ended
Year to Date
Jun-17
Mar-17
Dec-16
Sep-16
Jun-16
Jun-17
Jun-16
NONINTEREST REVENUE:
Mortgage banking excl. MSR and MSR Hedge market value adj $
7,643
$
8,056
$
5,561
$
9,274
$
11,978
$
15,699
$
21,762
MSR and MSR Hedge market value adjustment
(1,509)
934
11,242
1,813
(4,092)
(575)
(12,046)
Credit card, debit card and merchant fees
9,565
8,903
9,262
9,292
9,495
18,468
18,456
Deposit service charges
9,706
9,689
9,956
11,313
11,018
19,395
22,032
Securities gains, net
23
1,071
39
1
86
1,094
88
Insurance commissions
31,126
32,940
25,709
28,194
28,803
64,066
62,052
Trust income
3,679
3,561
3,874
3,641
3,493
7,240
6,923
Annuity fees
264
349
257
446
465
613
942
Brokerage commissions and fees
1,332
1,264
1,270
1,225
1,389
2,596
2,591
Bank-owned life insurance
1,710
1,669
2,104
1,775
1,813
3,379
3,706
Other miscellaneous income
4,591
2,433
2,701
2,699
4,078
7,024
6,747
Total noninterest revenue
$
68,130
$
70,869
$
71,975
$
69,673
$
68,526
$ 138,999
$ 133,253
NONINTEREST EXPENSE:
Salaries and employee benefits
$
81,597
$
81,386
$
80,850
$
80,884
$
80,675
$ 162,983
$ 162,354
Occupancy, net of rental income
10,455
10,302
10,294
10,412
10,109
20,757
20,382
Equipment
3,438
3,568
3,563
3,423
3,295
7,006
7,060
Deposit insurance assessments
2,261
2,484
1,818
3,227
2,582
4,745
4,870
Regulatory settlement
-
-
-
-
-
-
10,277
Advertising
1,037
663
2,443
925
1,043
1,700
1,676
Foreclosed property expense
960
1,050
1,005
859
1,309
2,010
2,490
Telecommunications
1,233
1,147
1,245
1,288
1,259
2,380
2,554
Public relations
654
720
716
718
599
1,374
1,260
Data processing
7,230
6,623
6,903
6,856
6,685
13,853
13,076
Computer software
2,913
2,981
3,013
2,976
2,732
5,894
5,392
Amortization of intangibles
1,010
1,030
963
923
869
2,040
1,749
Legal
1,330
1,229
1,190
1,064
1,754
2,559
6,289
Merger expense
-
-
-
-
1
-
2
Postage and shipping
1,080
1,175
1,075
1,059
985
2,255
2,102
Other miscellaneous expense
12,355
12,751
15,441
13,703
13,664
25,106
27,540
Total noninterest expense
$
127,553
$
127,109
$
130,519
$
128,317
$
127,561
$ 254,662
$ 269,073
INSURANCE COMMISSIONS:
Property and casualty commissions
$
22,363
$
19,755
$
19,098
$
20,927
$
20,417
42,118
$
40,294
Life and health commissions
6,623
6,465
5,757
5,897
6,252
13,088
11,867
Risk management income
600
648
610
674
592
1,248
1,215
Other
1,540
6,072
244
696
1,542
7,612
8,676
Total insurance commissions
$
31,126
$
32,940
$
25,709
$
28,194
$
28,803
$
64,066
$
62,052
BancorpSouth, Inc.
Selected Additional Information
(Dollars in thousands)
(Unaudited)
Quarter Ended
Jun-17
Mar-17
Dec-16
Sep-16
Jun-16
MORTGAGE SERVICING RIGHTS:
Fair value, beginning of period
$
67,161
$
65,263
$
51,930
$
48,108
$
50,544
Additions to mortgage servicing rights:
Originations of servicing assets
2,772
2,866
4,022
4,349
3,723
Changes in fair value:
Due to payoffs/paydowns
(2,825)
(1,876)
(2,447)
(2,338)
(2,066)
Due to change in valuation inputs or
assumptions used in the valuation model
(1,616)
909
11,759
1,813
(4,092)
Other changes in fair value
(1)
(1)
(1)
(2)
(1)
Fair value, end of period
$
65,491
$
67,161
$
65,263
$
51,930
$
48,108
MORTGAGE BANKING REVENUE:
Production revenue:
Origination
$
5,771
$
5,117
$
3,335
$
6,973
$
9,366
Servicing
4,697
4,815
4,673
4,639
4,678
Payoffs/Paydowns
(2,825)
(1,876)
(2,447)
(2,338)
(2,066)
Total production revenue
7,643
8,056
5,561
9,274
11,978
Market value adjustment on MSR
(1,616)
909
11,759
1,813
(4,092)
Market value adjustment on MSR Hedge
107
25
(517)
-
-
Total mortgage lending revenue
$
6,134
$
8,990
$
16,803
$
11,087
$
7,886
Mortgage loans serviced
$ 6,431,273
$
6,429,617
$
6,384,649
$ 6,285,027
$
6,156,258
MSR/mtg loans serviced
1.02%
1.04%
1.01%
0.83%
0.78%
AVAILABLE-FOR-SALE SECURITIES, at fair value
U.S. Government agencies
$ 1,713,374
$
1,818,180
$
1,789,427
$ 1,691,866
$
1,310,803
Government agency issued residential
mortgage-back securities
159,246
167,542
176,243
184,095
180,178
Government agency issued commercial
mortgage-back securities
170,642
170,082
172,279
178,826
193,475
Obligations of states and political subdivisions 345,130
352,324
360,005
384,996
399,391
Other
32,903
32,759
33,722
28,416
20,036
Total available-for-sale securities
$ 2,421,295
$
2,540,887
$
2,531,676
$ 2,468,199
$
2,103,883
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
6/30/2017
3/31/2017
12/31/2016
9/30/2016
6/30/2016
6/30/2017
6/30/2016
Net income
$
37,889
$
38,093
$
37,670
$
37,817
$
34,692
$
75,982
$
57,241
Plus:
Merger expense, net of tax
-
-
-
-
1
-
2
Regulatory related charges, net of tax
-
-
-
-
-
-
9,412
Less:
Security gains, net of tax
14
664
25
-
53
678
55
Net operating income
$
37,875
$
37,429
$
37,645
$
37,817
$
34,640
$
75,304
$
66,600
Less:
MSR market value adjustment, net of tax
(936)
579
6,970
1,124
(2,537)
(357)
(7,468)
Net operating income-excluding MSR
$
38,811
$
36,850
$
30,675
$
36,693
$
37,177
$
75,661
$
74,068
Reconciliation of Total Operating Expense to Total Noninterest Expense:
Total noninterest expense
$
127,553
$ 127,109
$
130,519
$
128,317
$
127,561
$
254,662
$
269,073
Less:
Merger expense
-
-
-
-
1
-
2
Regulatory related charges
-
-
-
-
-
-
13,777
Total operating expense
$
127,553
$ 127,109
$
130,519
$
128,317
$
127,560
$
254,662
$
255,294
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
6/30/2017
3/31/2017
12/31/2016
9/30/2016
6/30/2016
6/30/2017
6/30/2016
Tangible assets
Total assets
$ 14,843,130
$
14,866,054
$
14,724,388
$ 14,611,483
$
14,137,160
$ 14,843,130
$ 14,137,160
Less:
Goodwill
300,798
300,798
300,798
294,901
294,901
300,798
294,901
Other identifiable intangible assets
19,854
20,865
21,894
19,908
20,831
19,854
20,831
Total tangible assets
$ 14,522,478
$
14,544,391
$
14,401,696
$ 14,296,674
$
13,821,428
$ 14,522,478
$ 13,821,428
Tangible shareholders’ equity
Total shareholders’ equity
$
1,691,832
$
1,702,389
$
1,723,883
$
1,724,104
$
1,713,043
$
1,691,832
$
1,713,043
Less:
Goodwill
300,798
300,798
300,798
294,901
294,901
300,798
294,901
Other identifiable intangible assets
19,854
20,865
21,894
19,908
20,831
19,854
20,831
Total tangible shareholders’ equity
$
1,371,180
$
1,380,726
$
1,401,191
$
1,409,295
$
1,397,311
$
1,371,180
$
1,397,311
Total average assets
$ 14,741,811
$
14,832,260
$
14,655,360
$ 14,366,759
$
14,027,786
$ 14,786,784
$ 13,939,723
Total shares of common stock outstanding
91,022,729
92,344,409
93,696,687
94,074,740
94,546,091
91,022,729
94,546,091
Average shares outstanding-diluted
91,530,552
93,829,400
93,966,392
94,563,833
94,694,795
92,686,203
94,644,168
Tangible shareholders’ equity to tangible assets (1)
9.44%
9.49%
9.73%
9.86%
10.11%
9.44%
10.11%
Return on tangible equity (2)
11.08%
11.19%
10.70%
10.68%
9.99%
11.17%
8.24%
Operating return on tangible equity-excluding MSR (3)
11.35%
10.82%
8.71%
10.36%
10.70%
11.13%
10.66%
Operating return on average assets-excluding MSR (4)
1.06%
1.01%
0.83%
1.02%
1.07%
1.03%
1.07%
Operating return on average shareholders’ equity-excluding MSR (5) 9.27%
8.63%
7.08%
8.49%
8.84%
8.94%
8.87%
Tangible book value per share (6)
$
15.06
$
14.95
$
14.95
$
14.98
$
14.78
$
15.06
$
14.78
Operating earnings per share (7)
$
0.41
$
0.40
$
0.40
$
0.40
$
0.37
$
0.81
$
0.70
Operating earnings per share-excluding MSR (8)
$
0.42
$
0.39
$
0.33
$
0.39
$
0.39
$
0.82
$
0.76
(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.

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