BXS
$31.75
Bancorpsouth
$.50
1.60%
Earnings Details
3rd Quarter September 2017
Wednesday, October 18, 2017 4:30:00 PM
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Summary

Bancorpsouth (BXS) Recent Earnings

Bancorpsouth (BXS) reported 3rd Quarter September 2017 earnings of $0.43 per share on revenue of $196.9 million. The consensus earnings estimate was $0.42 per share on revenue of $191.2 million. Revenue grew 1.9% 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
$0.43
Earnings Whisper
-
Consensus Estimate
$0.42
Reported Revenue
$196.9 Mil
Revenue Estimate
$191.2 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

BancorpSouth Announces Third Quarter 2017 Financial Results

BancorpSouth, Inc. (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 (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
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
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
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.

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