Chronicle Journal: Finance

BancorpSouth 2017 Annual Earnings Reach New Record; Declares Quarterly Dividend

TUPELO, Miss., Jan. 24, 2018 /PRNewswire/ -- BancorpSouth Bank (NYSE: BXS) (the "Company") today announced financial results for the quarter and year ended December 31, 2017.

Annual highlights for 2017 included:

  • Record net income of $153.0 million, or $1.67 per diluted share.
  • Total operating expense declined $7.4 million compared to 2016.
  • Net interest margin increased to 3.54 percent from 3.52 percent for 2016.
  • Generated net loan growth of $244.4 million, or 2.3 percent.
  • Reported total deposit growth of $227.5 million, or 1.9 percent.
  • Net operating income – excluding MSR – of $152.0 million, or $1.66 per diluted share.
  • Completed pending mergers with Central Community Corporation and Ouachita Bancshares Corp. effective January 15, 2018 for which regulatory approval was received during the fourth quarter of 2017.
  • Repurchased 3,695,213 shares of outstanding common stock at a weighted average price of $29.94 per share.

Highlights for the fourth quarter of 2017 included:

  • Net income of $37.5 million, or $0.41 per diluted share.
  • Reported total deposit growth of $139.6 million, or 4.7 percent on an annualized basis.
  • Total noninterest expense declined compared to both the third quarter of 2017 and the fourth quarter of 2016.
  • Earnings benefitted from a positive pre-tax mortgage servicing rights ("MSR") valuation adjustment of $2.4 million.
  • Net operating income – excluding MSR – of $36.8 million, or $0.41 per diluted share.
  • Recorded additional income tax expense of $0.6 million, or $0.01 per share, to reflect the net impact of certain strategic tax planning decisions as well as the revaluation of the net deferred tax asset resulting from corporate tax law changes enacted by the Tax Cuts and Jobs Act of 2017.

The Company reported net income of $37.5 million, or $0.41 per diluted share, for the fourth quarter of 2017 compared with net income of $37.7 million, or $0.40 per diluted share, for the fourth quarter of 2016 and net income of $39.5 million, or $0.43 per diluted share, for the third quarter of 2017.  The Company reported net operating income – excluding MSR – of $36.8 million, or $0.41 per diluted share, for the fourth quarter of 2017 compared to $30.7 million, or $0.33 per diluted share, for the fourth quarter of 2016 and $39.6 million, or $0.43 per diluted share, for the third quarter of 2017. 

Additionally, the company reported net income of $153.0 million, or $1.67 per diluted share, for the year ended December 31, 2017 compared to $132.7 million, or $1.41 per diluted share, for the year ended December 31, 2016.  The Company reported net operating income – excluding MSR – of $152.0 million, or $1.66 per diluted share, for the year ended December 31, 2017 compared to $141.4 million, or $1.50 per diluted share, for the year ended December 31, 2016. 

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. 

At its regular quarterly meeting today, the Board of Directors of the Company declared a quarterly cash dividend of $0.14 per share of common stock.  The dividend is payable April 2, 2018 to shareholders of record at the close of business on March 15, 2018.

"We are pleased to report a successful completion to 2017," remarked Dan Rollins, BancorpSouth Chairman and Chief Executive Officer.  "A lot of hard work and progress by our teammates culminated in the closings of our pending transactions with Ouachita Bancshares Corp. and Central Community Corporation, which were effective January 15, 2018.   We could not have reached this point without the commitment and patience demonstrated by the shareholders, management teams, and employees of these two companies.  We are excited to have them as a part of our team.  Furthermore, we are pleased to be able to continue executing our strategic plan, of which these two organizations are an integral part."

"As we look specifically at fourth quarter results, we saw positive progress in a number of areas despite seasonally lower revenues associated with several of our noninterest products.  Total operating expense declined compared to both the third quarter of 2017 and the fourth quarter of 2016.  Additionally, we saw continued yield pickup in our loan and securities portfolios, combined with relatively stable deposit costs.  The positive impact of these items on our margin was offset by the decision to leverage the balance sheet in order to prefund the securities portfolio restructuring in anticipation of the merger closings."  

"Finally, we expect that the Tax Cuts and Jobs Act of 2017 will provide a tremendous benefit to our company and our shareholders.  Our board of directors and management team recognize that our employees, along with their customer relationships, are the most valuable asset of our company.  I'm proud the first investment that we made as a result of this legislation was in our teammates, through salary increases and one-time bonuses.  This legislation also resulted in the revaluation of our net deferred tax asset.  We made certain strategic tax planning decisions, which allowed us to reduce the net impact of the revaluation to $0.6 million."

Net Interest Revenue

Net interest revenue was $121.4 million for the fourth quarter of 2017, an increase of 5.2 percent from $115.4 million for the fourth quarter of 2016 and an increase of 0.7 percent from $120.6 million for the third quarter of 2017.  The fully taxable equivalent net interest margin was 3.58 percent for the fourth quarter of 2017 compared to 3.46 percent for the fourth quarter of 2016 and 3.58 percent for the third quarter of 2017.  Yields on loans and leases were 4.36 percent for the fourth quarter of 2017 compared with 4.18 percent for the fourth quarter of 2016 and 4.33 percent for the third quarter of 2017, while yields on total interest earning assets were 3.90 percent for the fourth quarter of 2017 compared with 3.70 percent for the fourth quarter of 2016 and 3.89 percent for the third quarter of 2017.  The average cost of deposits was 0.27 percent for the fourth quarter of 2017 compared to 0.23 percent for the fourth quarter of 2016 and 0.26 percent for the third quarter of 2017.

Asset, Deposit and Loan Activity

Total assets were $15.3 billion at December 31, 2017 compared with $14.7 billion at December 31, 2016.  Loans and leases, net of unearned income, were $11.1 billion at December 31, 2017 compared with $10.8 billion at December 31, 2016. 

Total deposits were $11.9 billion at December 31, 2017 compared with $11.7 billion at December 31, 2016.  Time deposits decreased $84.1 million, or 4.6 percent, at December 31, 2017 compared to December 31, 2016.  Over the same time period, interest bearing demand deposits increased $32.1 million, or 0.6 percent, while noninterest bearing demand deposits increased $202.5 million, or 6.2 percent, and savings deposits increased $77.0 million, or 4.9 percent.

Provision for Credit Losses and Allowance for Credit Losses

Earnings for the fourth quarter reflect a provision for credit losses of $0.5 million, compared to a provision of $1.0 million for the fourth quarter of 2016 and a provision of $0.5 million for the third quarter of 2017.  Net charge-offs for the fourth quarter of 2017 were $1.8 million, compared with net charge-offs of $3.2 million for the fourth quarter of 2016 and net charge-offs of $2.6 million for the third quarter of 2017.  The allowance for credit losses was $118.2 million, or 1.07 percent of net loans and leases, at December 31, 2017, compared with $123.7 million, or 1.14 percent of net loans and leases, at December 31, 2016 and $119.5 million, or 1.08 percent of net loans and leases, at September 30, 2017. 

Total non-performing assets were $84.5 million, or 0.76 percent of net loans and leases, at December 31, 2017 compared with $109.7 million, or 1.01 percent of net loans and leases, at December 31, 2016, and $71.0 million, or 0.64 percent of net loans and leases, at September 30, 2017.  Other real estate owned was $6.0 million at December 31, 2017 compared with $7.8 million at December 31, 2016 and $6.0 million at September 30, 2017.

Noninterest Revenue

Noninterest revenue was $63.1 million for the fourth quarter of 2017, compared with $72.0 million for the fourth quarter of 2016 and $66.0 million for the third quarter of 2017.  These results included a positive MSR valuation adjustment of $2.4 million for the fourth quarter of 2017, compared with a positive MSR valuation adjustment of $11.2 million for the fourth quarter of 2016 and an essentially flat MSR valuation adjustment for the third 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 $4.9 million for the fourth quarter of 2017, compared with $5.6 million for the fourth quarter of 2016 and $7.0 million for the third quarter of 2017.  Mortgage origination volume for the fourth quarter of 2017 was $308.4 million, compared with $395.9 million for the fourth quarter of 2016 and $342.4 million for the third quarter of 2017.

Credit and debit card fee revenue was $9.5 million for the fourth quarter of 2017, compared with $9.3 million for both the fourth quarter of 2016 and the third quarter of 2017.  Deposit service charge revenue was $10.3 million for the fourth quarter of 2017, compared with $10.0 million for the fourth quarter of 2016 and $10.4 million for the third quarter of 2017.  Insurance commission revenue was $25.8 million for the fourth quarter of 2017, compared with $25.7 million for the fourth quarter of 2016 and $28.6 million for the third quarter of 2017.  Wealth management revenue was $5.6 million for the fourth quarter of 2017, compared with $5.4 million for both the fourth quarter of 2016 and the third quarter of 2017.    

Noninterest Expense

Noninterest expense for the fourth quarter of 2017 was $125.9 million, compared with $130.5 million for the fourth quarter of 2016 and $126.9 million for the third quarter of 2017.  Salaries and employee benefits expense was $78.1 million for the fourth quarter of 2017 compared to $80.9 million for the fourth quarter of 2016 and $81.4 million for the third quarter of 2017.  Occupancy expense was $10.1 million for the fourth quarter of 2017, compared with $10.3 million for both the fourth quarter of 2016 and the third quarter of 2017.  Other noninterest expense was $31.3 million for the fourth quarter of 2017, compared to $34.0 million for the fourth quarter of 2016 and $29.3 million for the third quarter of 2017.

Capital Management

The Company's equity capitalization is comprised entirely of common stock.  The Company's ratio of shareholders' equity to assets was 11.20 percent at December 31, 2017, compared with 11.71 percent at December 31, 2016 and 11.52 percent at September 30, 2017.  The ratio of tangible shareholders' equity to tangible assets was 9.31 percent at December 31, 2017, compared with 9.73 percent at December 31, 2016 and 9.56 percent at September 30, 2017.

During the fourth quarter of 2017, the Company did not repurchase shares of its outstanding common stock 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 third quarter of 2017, the Company repurchased 699,888 shares at a weighted average price of $28.99 per share.  As of December 31, 2017, the Company had 6,000,000 remaining shares available for repurchase under its current share repurchase authorization, which expires on December 31, 2019.  

Estimated regulatory capital ratios at December 31, 2017 were calculated in accordance with the Basel III capital framework.  The Company is a "well capitalized" bank, as defined by federal regulations, at December 31, 2017, with Tier 1 risk-based capital of 12.15 percent and total risk-based capital of 13.13 percent, compared with required minimum levels of 8 percent and 10 percent, respectively, in order to qualify for "well capitalized" classification. 

TRANSACTIONS

The Reorganization

Effective October 31, 2017, the previously announced merger of BancorpSouth, Inc. with and into BancorpSouth Bank was closed, with BancorpSouth Bank continuing as the surviving entity (the "Reorganization").  This transaction resulted in the elimination of the holding company structure.  The reorganization is expected to improve efficiency through the elimination of redundant corporate infrastructure and duplicative regulatory oversight.  See our current report on Form 8-K that was filed with the Federal Deposit Insurance Corporation (the "FDIC") on November 1, 2017 and that is incorporated herein by reference.

Waguespack & Associates Insurance, Inc.

On December 19, 2016, BXS Insurance announced and closed the acquisition of certain assets of Waguespack & Associates Insurance, Inc.  The agency was formed in 1986, is based in Gonzalez, Louisiana and produces annual revenues of approximately $3 million.  Waguespack continues to operate under its legacy leadership in Gonzales.

Central Community Corporation

Effective January 15, 2018, the Company completed the merger with Central Community Corporation ("CCC"), headquartered in Temple, Texas, pursuant to which CCC merged with and into the Company.  CCC was the parent company of First State Bank, and its wholly owned bank subsidiary First State Bank Central Texas, ("First State Bank") which was headquartered in Austin, Texas.  First State Bank operates 31 full-service banking offices in central Texas.  As of December 31, 2017, CCC, on a consolidated basis, reported total assets of $1.4 billion, total loans of $715.1 million and total deposits of $1.2 billion.  Under the terms of the definitive agreement, the Company issued approximately 7,250,000 shares of the Company's common stock plus $28.5 million in cash for all outstanding shares of CCC's capital stock.

Ouachita Bancshares Corp.

Effective January 15, 2018, the Company completed the merger with Ouachita Bancshares Corp., parent company of Ouachita Independent Bank (collectively referred to as "OIB"), headquartered in Monroe, Louisiana, pursuant to which OIB was 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 December 31, 2017, OIB, on a consolidated basis, reported total assets of $703.1 million, total loans of $498.0 million and total deposits of $599.0 million.  Under the terms of the definitive agreement, the Company issued 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.

Summary

Rollins concluded, "Our annual results for 2017 reflect continued improvement in many of our operating metrics. Although our loan and deposit growth for the year was not as high as we would have liked, we saw significant improvement in other areas including record net income of $153.0 million, or $1.67 per diluted share.  Our total operating expense for 2017 actually declined $7.4 million compared to 2016, which contributed to our operating efficiency ratio - excluding MSR - declining from 69.8 percent to 67.8 percent.  This improvement, combined with the expansion in our net interest margin and other factors, contributed to 11 percent growth in our operating earnings per share.  Finally, we were able to return capital to our shareholders, repurchasing approximately 3.7 million shares at a weighted average price of $29.94.  As we look to 2018, I'm confident our company is positioned to continue to improve our operating performance and enhance the returns delivered 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 20 of this news release.

Conference Call and Webcast

The Company will conduct a conference call to discuss its fourth quarter and annual 2017 financial results on January 25, 2018, 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 Bank

BancorpSouth Bank (NYSE: BXS) is headquartered in Tupelo, Mississippi, with approximately $17 billion in assets.  BancorpSouth operates 276 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, the proposed impact of the Reorganization on the Bank, the acceptance by customers of Ouachita Bancshares Corp. and Central Community Corporation of the Company's products and services after the closing of the mergers, 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"), the impact of the Tax Cuts and Jobs Act of 2017 on the Company and its operations, 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 and the Bank to meet expectations regarding the 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 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 Tax Cuts and Jobs Act of 2017 on the Company and its operations, 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 FDIC.  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 Bank

Selected Financial Information

(Dollars in thousands, except per share data)

(Unaudited)


















Quarter Ended

Quarter Ended

Quarter Ended

Quarter Ended

Quarter Ended

Year Ended

Year Ended


12/31/2017

9/30/2017

6/30/2017

3/31/2017

12/31/2016

12/31/2017

12/31/2016

Earnings Summary:








Interest revenue

$                    132,276

$                    130,934

$                    126,855

$                    122,926

$                    123,444

$            512,991

$            483,179

Interest expense

10,890

10,373

9,377

8,315

8,057

38,955

29,727

Net interest revenue

121,386

120,561

117,478

114,611

115,387

474,036

453,452

Provision for credit losses

500

500

1,000

1,000

1,000

3,000

4,000

Net interest revenue, after provision








   for credit losses

120,886

120,061

116,478

113,611

114,387

471,036

449,452

Noninterest revenue

63,074

65,960

68,130

70,869

71,975

268,033

274,901

Noninterest expense

125,881

126,903

127,553

127,109

130,519

507,446

527,909

Income before income taxes

58,079

59,118

57,055

57,371

55,843

231,623

196,444

Income tax expense

20,556

19,590

19,166

19,278

18,173

78,590

63,716

Net income

$                      37,523

$                      39,528

$                      37,889

$                      38,093

$                      37,670

$            153,033

$            132,728









Balance Sheet - Period End Balances








Total assets

$               15,298,518

$               14,760,394

$               14,843,130

$               14,866,054

$               14,724,388

$       15,298,518

$       14,724,388

Total earning assets

14,081,818

13,606,145

13,674,436

13,757,920

13,549,407

14,081,818

13,549,407

Total securities

2,835,367

2,359,967

2,421,295

2,540,887

2,531,676

2,835,367

2,531,676

Loans and leases, net of unearned income

11,056,434

11,055,509

11,018,540

10,801,694

10,811,991

11,056,434

10,811,991

Allowance for credit losses

118,200

119,496

121,561

125,196

123,736

118,200

123,736

Total deposits

11,915,596

11,775,988

11,938,296

12,042,845

11,688,141

11,915,596

11,688,141

Long-term debt

30,000

30,000

230,000

530,000

530,000

30,000

530,000

Total shareholders' equity

1,713,485

1,700,502

1,691,832

1,702,389

1,723,883

1,713,485

1,723,883









Balance Sheet - Average Balances








Total assets

$               14,809,497

$               14,710,245

$               14,741,811

$               14,832,260

$               14,655,360

$       14,773,217

$       14,226,953

Total earning assets

13,678,542

13,591,124

13,636,415

13,715,612

13,525,284

13,655,146

13,147,264

Total securities

2,447,357

2,367,633

2,497,108

2,507,701

2,479,008

2,454,545

2,193,937

Loans and leases, net of unearned income

11,010,187

11,013,270

10,883,102

10,820,486

10,737,802

10,932,505

10,557,103

Total deposits

11,840,049

11,802,682

11,902,415

11,941,851

11,700,213

11,871,281

11,520,186

Long-term debt

30,000

162,609

398,132

530,000

534,141

278,493

313,979

Total shareholders' equity

1,701,228

1,695,899

1,680,053

1,731,931

1,724,871

1,702,176

1,701,052









Nonperforming Assets:








Non-accrual loans and leases

$                      61,891

$                      55,796

$                      63,585

$                      74,439

$                      71,812

$              61,891

$              71,812

Loans and leases 90+ days past due, still accruing

8,503

1,855

1,793

3,063

3,983

8,503

3,983

Restructured loans and leases, still accruing

8,060

7,366

6,303

4,060

26,047

8,060

26,047

Non-performing loans (NPLs)

78,454

65,017

71,681

81,562

101,842

78,454

101,842

Other real estate owned

6,038

5,956

7,704

8,458

7,810

6,038

7,810

Non-performing assets (NPAs)

$                      84,492

$                      70,973

$                      79,385

$                      90,020

$                    109,652

$              84,492

$            109,652









Financial Ratios and Other Data:








Return on average assets

1.01%

1.07%

1.03%

1.04%

1.02%

1.04%

0.93%

Operating return on average assets-excluding MSR*

0.99%

1.07%

1.06%

1.01%

0.83%

1.03%

0.99%

Return on average shareholders' equity

8.75%

9.25%

9.05%

8.92%

8.69%

8.99%

7.80%

Operating return on average shareholders' equity-excluding MSR*

8.58%

9.25%

9.27%

8.63%

7.08%

8.93%

8.31%

Return on tangible equity*

10.67%

11.36%

11.08%

11.19%

10.70%

10.97%

9.47%

Operating return on tangible equity-excluding MSR*

10.46%

11.36%

11.35%

10.82%

8.71%

10.90%

10.09%

Noninterest income to average assets

1.69%

1.78%

1.85%

1.94%

1.95%

1.81%

1.93%

Noninterest expense to average assets

3.37%

3.42%

3.47%

3.48%

3.54%

3.43%

3.71%

Net interest margin-fully taxable equivalent

3.58%

3.58%

3.52%

3.46%

3.46%

3.54%

3.52%

Net interest rate spread

3.44%

3.45%

3.40%

3.35%

3.36%

3.41%

3.42%

Efficiency ratio (tax equivalent)*

67.45%

67.23%

67.90%

67.71%

68.79%

67.57%

71.51%

Operating efficiency ratio-excluding MSR (tax equivalent)*

68.16%

67.24%

67.33%

68.43%

73.14%

67.78%

69.75%

Loan/deposit ratio

92.79%

93.88%

92.30%

89.69%

92.50%

92.79%

92.50%

Price to earnings multiple (avg)

18.95%

19.42

18.83

19.15

22.02

18.95

22.02

Market value to book value

165.76%

170.25%

164.07%

164.09%

168.76%

165.76%

168.76%

Market value to book value (avg)

169.35%

158.92%

161.24%

166.39%

145.61%

161.70%

127.73%

Market value to tangible book value

203.64%

209.66%

202.52%

202.32%

207.63%

203.64%

207.63%

Market value to tangible book value (avg)

208.04%

195.70%

199.07%

205.16%

179.14%

198.65%

157.14%

Headcount FTE

3,947

3,950

3,989

3,973

3,998

3,947

3,998









*Denotes non-GAAP financial measure.  Refer to related disclosure and reconciliation on pages 20 and 21.


 

BancorpSouth Bank
Selected Financial Information
(Dollars in thousands, except per share data)
(Unaudited)










Quarter Ended

Quarter Ended

Quarter Ended

Quarter Ended

Quarter Ended

Year Ended

Year Ended


12/31/2017

9/30/2017

6/30/2017

3/31/2017

12/31/2016

12/31/2017

12/31/2016

Credit Quality Ratios:








Net charge-offs (recoveries) to average loans and leases (annualized)

0.06%

0.09%

0.17%

(0.02%)

0.12%

0.08%

0.06%

Provision for credit losses to average loans and leases (annualized)

0.02%

0.02%

0.04%

0.04%

0.04%

0.03%

0.04%

Allowance for credit losses to net loans and leases

1.07%

1.08%

1.10%

1.16%

1.14%

1.07%

1.14%

Allowance for credit losses to non-performing loans and leases

150.66%

183.79%

169.59%

153.50%

121.50%

150.66%

121.50%

Allowance for credit losses to non-performing assets

139.89%

168.37%

153.13%

139.08%

112.84%

139.89%

112.84%

Non-performing loans and leases to net loans and leases

0.71%

0.59%

0.65%

0.76%

0.94%

0.71%

0.94%

Non-performing assets to net loans and leases

0.76%

0.64%

0.72%

0.83%

1.01%

0.76%

1.01%









Equity Ratios:








Total shareholders' equity to total assets

11.20%

11.52%

11.40%

11.45%

11.71%

11.20%

11.71%

Tangible shareholders' equity to tangible assets*

9.31%

9.56%

9.44%

9.49%

9.73%

9.31%

9.73%

















Capital Adequacy:








Common  Equity Tier 1 capital

12.15%

12.04%

11.90%

12.16%

12.23%

12.15%

12.23%

Tier 1 capital

12.15%

12.04%

11.90%

12.16%

12.34%

12.15%

12.34%

Total capital

13.13%

13.03%

12.91%

13.21%

13.38%

13.13%

13.38%

Tier 1 leverage capital

10.12%

10.02%

9.93%

9.95%

10.32%

10.12%

10.32%

   Estimated for current quarter
















Common Share Data:








Basic earnings per share

$                          0.42

$                          0.43

$                          0.41

$                          0.41

$                          0.40

$                  1.67

$                  1.41

Diluted earnings per share

0.41

0.43

0.41

0.41

0.40

1.67

1.41

Operating earnings per share*

0.42

0.43

0.41

0.40

0.40

1.67

1.51

Operating earnings per share- excluding MSR*

0.41

0.43

0.42

0.39

0.33

1.66

1.50

Cash dividends per share

0.14

0.14

0.13

0.13

0.13

0.53

0.45

Book value per share

18.97

18.83

18.59

18.44

18.40

18.97

18.40

Tangible book value per share*

15.44

15.29

15.06

14.95

14.95

15.44

14.95

Market value per share (last)

31.45

32.05

30.50

30.25

31.05

31.45

31.05

Market value per share (high)

34.45

32.70

31.85

32.40

31.75

34.45

31.75

Market value per share (low)

30.25

27.20

28.20

28.10

22.23

27.20

18.69

Market value per share (avg)

32.13

29.92

29.98

30.68

26.79

30.67

23.50

Dividend payout ratio

33.70%

32.20%

30.48%

30.73%

31.11%

31.71%

31.94%

Total shares outstanding

90,312,378

90,329,896

91,022,729

92,344,409

93,696,687

90,312,378

93,696,687

Average shares outstanding - basic

90,321,137

90,911,702

91,366,309

93,642,848

93,740,626

91,560,499

94,218,694

Average shares outstanding - diluted

90,546,824

91,099,770

91,530,552

93,829,400

93,966,392

91,754,749

94,454,640

















Yield/Rate:








(Taxable equivalent basis)








Loans, loans held for sale, and leases net of unearned income

4.36%

4.33%

4.27%

4.20%

4.18%

4.29%

4.20%

Available-for-sale securities:








  Taxable

1.48%

1.41%

1.37%

1.35%

1.31%

1.40%

1.36%

  Tax-exempt

5.29%

5.25%

5.26%

5.29%

5.29%

5.27%

5.33%

Short-term investments

1.09%

1.02%

0.88%

0.76%

0.41%

0.89%

0.42%

  Total interest earning assets and revenue

3.90%

3.89%

3.80%

3.70%

3.70%

3.82%

3.75%

Deposits

0.27%

0.26%

0.25%

0.23%

0.23%

0.25%

0.22%

  Demand - interest bearing

0.29%

0.28%

0.25%

0.22%

0.20%

0.26%

0.19%

  Savings

0.13%

0.12%

0.12%

0.12%

0.12%

0.12%

0.12%

  Other time

0.86%

0.84%

0.81%

0.79%

0.79%

0.82%

0.76%

Short-term borrowings

0.96%

0.85%

0.69%

0.31%

0.16%

0.78%

0.15%

Total interest bearing deposits & short-term borrowings

0.45%

0.41%

0.37%

0.32%

0.31%

0.39%

0.29%

Junior subordinated debt

N/A

N/A

N/A

3.29%

3.53%

3.29%

3.30%

Long-term debt

4.05%

1.79%

1.01%

0.87%

0.73%

1.14%

0.98%

  Total interest bearing liabilities and expense

0.46%

0.44%

0.40%

0.35%

0.34%

0.41%

0.33%

Interest bearing liabilities to interest earning assets

69.09%

69.55%

69.68%

70.24%

69.43%

69.64%

69.49%

Net interest tax equivalent adjustment

$                        2,155

$                        2,237

$                        2,248

$                        2,261

$                        2,371

$                8,897

$                9,884









*Denotes non-GAAP financial measure.  Refer to related disclosure and reconciliation on pages 20 and 21.


 

 

 







BancorpSouth Bank

Consolidated Balance Sheets

(Unaudited)








Dec-17

Sep-17

Jun-17

Mar-17

Dec-16


(Dollars in thousands)

Assets






Cash and due from banks

$                167,283

$                167,871

$                178,376

$                147,684

$                184,152

Interest bearing deposits with other banks

53,440

52,316

49,680

253,738

38,813

Available-for-sale securities, at fair value

2,835,367

2,359,967

2,421,295

2,540,887

2,531,676

Loans and leases

11,072,062

11,073,306

11,037,808

10,822,568

10,835,512

  Less:  Unearned income

15,628

17,797

19,268

20,874

23,521

             Allowance for credit losses

118,200

119,496

121,561

125,196

123,736

Net loans and leases

10,938,234

10,936,013

10,896,979

10,676,498

10,688,255

Loans held for sale

136,577

138,353

184,921

161,600

166,927

Premises and equipment, net

314,362

311,530

306,863

305,250

305,561

Accrued interest receivable

45,671

44,454

40,716

42,329

42,005

Goodwill

300,798

300,798

300,798

300,798

300,798

Other identifiable intangibles

17,882

18,860

19,854

20,865

21,894

Bank owned life insurance

292,069

259,361

260,228

258,518

258,648

Other real estate owned

6,038

5,956

7,704

8,458

7,810

Other assets

190,797

164,915

175,716

149,429

177,849

Total Assets

$           15,298,518

$           14,760,394

$           14,843,130

$           14,866,054

$           14,724,388

Liabilities






Deposits:






  Demand:  Noninterest bearing

$             3,453,000

$             3,414,397

$             3,390,428

$             3,401,348

$             3,250,537

                  Interest bearing

5,066,614

4,925,127

5,095,570

5,182,011

5,034,470

  Savings

1,638,799

1,638,033

1,630,123

1,627,621

1,561,819

  Other time

1,757,183

1,798,431

1,822,175

1,831,865

1,841,315

Total deposits

11,915,596

11,775,988

11,938,296

12,042,845

11,688,141

Securities sold under agreement to repurchase

417,867

421,044

399,815

375,832

454,002

Federal funds purchased






   and other short-term borrowing

1,025,000

625,000

365,000

-

92,000

Accrued interest payable

4,882

4,826

4,259

4,109

3,975

Junior subordinated debt securities

-

-

-

-

12,888

Long-term debt

30,000

30,000

230,000

530,000

530,000

Other liabilities

191,688

203,034

213,928

210,879

219,499

Total Liabilities

13,585,033

13,059,892

13,151,298

13,163,665

13,000,505

Shareholders' Equity






Common stock

225,781

225,825

227,557

230,861

234,242

Capital surplus

177,624

175,837

191,940

226,204

271,292

Accumulated other comprehensive loss

(63,843)

(50,203)

(49,861)

(50,360)

(50,937)

Retained earnings

1,373,923

1,349,043

1,322,196

1,295,684

1,269,286

Total Shareholders' Equity

1,713,485

1,700,502

1,691,832

1,702,389

1,723,883

Total Liabilities & Shareholders' Equity

$           15,298,518

$           14,760,394

$           14,843,130

$           14,866,054

$           14,724,388

 

 

 

BancorpSouth Bank

Consolidated Average Balance Sheets

(Unaudited)








Dec-17

Sep-17

Jun-17

Mar-17

Dec-16


(Dollars in thousands)

Assets






Cash and due from banks

$                154,843

$                153,797

$                156,387

$                162,696

$                171,791

Interest bearing deposits with other banks

108,880

83,109

117,414

258,502

165,805

Available-for-sale securities, at fair value

2,447,357

2,367,633

2,497,108

2,507,701

2,479,008

Loans and leases

11,026,437

11,032,159

10,903,524

10,843,069

10,763,314

  Less:  Unearned income

16,250

18,889

20,422

22,583

25,512

             Allowance for credit losses

119,124

121,501

125,578

124,662

125,526

Net loans and leases

10,891,063

10,891,769

10,757,524

10,695,824

10,612,276

Loans held for sale

112,118

127,112

138,792

128,923

142,669

Premises and equipment, net

313,874

309,592

306,483

305,637

305,994

Accrued interest receivable

40,228

40,100

38,702

38,774

38,648

Goodwill

300,798

300,798

300,798

300,798

296,888

Other identifiable intangibles

18,231

19,222

20,218

21,236

20,303

Bank owned life insurance

265,761

261,100

259,182

257,669

257,397

Other real estate owned

5,777

6,985

7,860

8,154

9,084

Other assets

150,567

149,028

141,343

146,346

155,497

Total Assets

$           14,809,497

$           14,710,245

$           14,741,811

$           14,832,260

$           14,655,360

Liabilities






Deposits:






  Demand:  Noninterest bearing

$             3,479,771

$             3,369,468

$             3,362,801

$             3,272,876

$             3,344,632

                  Interest bearing

4,949,183

4,985,113

5,079,388

5,244,069

4,951,906

  Savings

1,631,617

1,634,577

1,626,996

1,587,725

1,543,542

  Other time

1,779,478

1,813,524

1,833,230

1,837,181

1,860,133

Total deposits

11,840,049

11,802,682

11,902,415

11,941,851

11,700,213

Securities sold under agreement to repurchase

471,581

444,999

412,825

414,272

475,669

Federal funds purchased






   and other short-term borrowing

589,261

411,815

151,352

19,545

3,924

Accrued interest payable

4,718

4,507

4,028

3,867

4,031

Junior subordinated debt securities

-

-

-

1,146

21,181

Long-term debt

30,000

162,609

398,132

530,000

534,141

Other liabilities

172,660

187,734

193,006

189,648

191,330

Total Liabilities

13,108,269

13,014,346

13,061,758

13,100,329

12,930,489

Shareholders' Equity






Common stock

225,808

227,247

228,322

234,285

234,323

Capital surplus

176,613

189,545

199,115

265,685

271,900

Accumulated other comprehensive loss

(55,181)

(48,591)

(49,185)

(50,616)

(40,454)

Retained earnings

1,353,988

1,327,698

1,301,801

1,282,577

1,259,102

Total Shareholders' Equity

1,701,228

1,695,899

1,680,053

1,731,931

1,724,871

Total Liabilities & Shareholders' Equity

$           14,809,497

$           14,710,245

$           14,741,811

$           14,832,260

$           14,655,360

 

 

 

BancorpSouth Bank

Consolidated Condensed Statements of Income

(Dollars in thousands, except per share data)

(Unaudited)
















Quarter Ended


Year Ended


Dec-17


Sep-17


Jun-17


Mar-17


Dec-16


Dec-17


Dec-16

INTEREST REVENUE:














Loans and leases

$  120,381


$  119,599


$   115,286


$  111,498


$  112,189


$ 466,764


$ 440,677

Deposits with other banks

300


214


256


485


169


1,255


1,070

Available-for-sale securities:














    Taxable

8,114


7,378


7,509


7,350


7,105


30,351


25,191

    Tax-exempt

2,417


2,514


2,562


2,581


2,771


10,074


11,625

Loans held for sale

1,064


1,229


1,242


1,012


1,210


4,547


4,616

        Total interest revenue

132,276


130,934


126,855


122,926


123,444


512,991


483,179















INTEREST EXPENSE:














Interest bearing demand

3,645


3,482


3,204


2,786


2,514


13,117


9,246

Savings

517


494


483


472


470


1,966


1,826

Other time

3,853


3,819


3,725


3,582


3,711


14,979


14,162

Federal funds purchased and securities sold














   under agreement to repurchase

930


754


509


322


190


2,515


662

Short-term and long-term debt

1,943


1,824


1,456


1,142


985


6,365


3,082

Junior subordinated debt

-


-


-


9


187


9


747

Other

2


-


-


2


-


4


2

        Total interest expense

10,890


10,373


9,377


8,315


8,057


38,955


29,727















        Net interest revenue

121,386


120,561


117,478


114,611


115,387


474,036


453,452

  Provision for credit losses

500


500


1,000


1,000


1,000


3,000


4,000

        Net interest revenue, after provision for














          credit losses

120,886


120,061


116,478


113,611


114,387


471,036


449,452















NONINTEREST REVENUE:














Mortgage banking

7,246


6,909


6,134


8,990


16,803


29,279


37,606

Credit card, debit card and merchant fees

9,530


9,346


9,565


8,903


9,262


37,344


37,010

Deposit service charges

10,257


10,388


9,706


9,689


9,956


40,040


43,301

Security gains, net

523


5


23


1,071


39


1,622


128

Insurance commissions

25,758


28,616


31,126


32,940


25,709


118,440


115,955

Wealth management

5,619


5,386


5,275


5,174


5,401


21,454


21,169

Other

4,141


5,310


6,301


4,102


4,805


19,854


19,732

        Total noninterest revenue

63,074


65,960


68,130


70,869


71,975


268,033


274,901















NONINTEREST EXPENSE:














Salaries and employee benefits

78,142


81,415


81,597


81,386


80,850


322,540


324,088

Occupancy, net of rental income

10,064


10,343


10,455


10,302


10,294


41,164


41,088

Equipment

3,710


3,352


3,438


3,568


3,563


14,068


14,046

Deposit insurance assessments

2,659


2,499


2,261


2,484


1,818


9,903


9,915

Regulatory settlement

-


-


-


-


-


-


10,277

Other

31,306


29,294


29,802


29,369


33,994


119,771


128,495

        Total noninterest expense

125,881


126,903


127,553


127,109


130,519


507,446


527,909

        Income before income taxes

58,079


59,118


57,055


57,371


55,843


231,623


196,444

Income tax expense

20,556


19,590


19,166


19,278


18,173


78,590


63,716

        Net income

$    37,523


$   39,528


$     37,889


$    38,093


$   37,670


$ 153,033


$ 132,728















Net income per share: Basic

$       0.42


$       0.43


$        0.41


$       0.41


$       0.40


$      1.67


$      1.41

                                  Diluted

$       0.41


$       0.43


$        0.41


$       0.41


$       0.40


$      1.67


$      1.41

 

 

 

BancorpSouth Bank

Selected Loan Data

(Dollars in thousands)

(Unaudited)












Quarter Ended


Dec-17


Sep-17


Jun-17


Mar-17


Dec-16

LOAN AND LEASE PORTFOLIO:










Commercial and industrial

$  1,480,279


$   1,506,352


$   1,566,459


$    1,536,527


$  1,612,295

Real estate










   Consumer mortgages

2,864,623


2,826,333


2,776,213


2,675,672


2,643,966

   Home equity

638,394


626,961


624,868


626,488


628,846

   Agricultural

243,449


247,211


245,646


240,534


245,377

   Commercial and industrial-owner occupied

1,846,085


1,835,430


1,795,321


1,801,613


1,764,265

   Construction, acquisition and development

1,153,187


1,175,979


1,156,901


1,136,827


1,157,248

   Commercial real estate

2,345,231


2,336,219


2,341,633


2,271,542


2,237,719

Credit cards

107,848


104,613


104,169


103,813


109,656

All other

377,338


396,411


407,330


408,678


412,619

     Total loans

$ 11,056,434


$ 11,055,509


$ 11,018,540


$  10,801,694


$ 10,811,991











ALLOWANCE FOR CREDIT LOSSES:










Balance, beginning of period

$     119,496


$      121,561


$     125,196


$       123,736


$     125,887











Loans and leases charged-off:










Commercial and industrial

(1,234)


(1,963)


(3,773)


(384)


(2,483)

Real estate










   Consumer mortgages

(773)


(1,193)


(522)


(596)


(905)

   Home equity

(95)


(439)


(125)


(459)


(873)

   Agricultural

(5)


(54)


(6)


(44)


-

   Commercial and industrial-owner occupied

(720)


(20)


(1,460)


(404)


(20)

   Construction, acquisition and development

(206)


(29)


(54)


(30)


(10)

   Commercial real estate

(159)


(49)


(1)


(19)


-

Credit cards

(849)


(745)


(781)


(838)


(815)

All other

(627)


(711)


(591)


(559)


(580)

     Total loans charged-off

(4,668)


(5,203)


(7,313)


(3,333)


(5,686)











Recoveries:










Commercial and industrial

599


481


1,034


490


1,019

Real estate










   Consumer mortgages

755


642


339


625


413

   Home equity

69


378


110


356


71

   Agricultural

7


77


34


41


15

   Commercial and industrial-owner occupied

391


285


481


193


201

   Construction, acquisition and development

483


260


208


1,324


195

   Commercial real estate

98


151


75


69


176

Credit cards

218


177


205


249


208

All other

252


187


192


446


237

     Total recoveries

2,872


2,638


2,678


3,793


2,535











Net (charge-offs) recoveries

(1,796)


(2,565)


(4,635)


460


(3,151)











Provision charged to operating expense

500


500


1,000


1,000


1,000

Balance, end of period

$     118,200


$      119,496


$     121,561


$       125,196


$     123,736











Average loans for period

$ 11,010,187


$ 11,013,270


$ 10,883,102


$ 10,820,486


$ 10,737,802











Ratio:










Net charge-offs (recoveries) to average loans (annualized)

0.06%


0.09%


0.17%


(0.02%)


0.12%











 

 

BancorpSouth Bank

Selected Loan Data

(Dollars in thousands)

(Unaudited)












Quarter Ended


Dec-17


Sep-17


Jun-17


Mar-17


Dec-16

NON-PERFORMING ASSETS










NON-PERFORMING LOANS AND LEASES:










  Nonaccrual Loans and Leases










    Commercial and industrial

$    10,178


$         8,776


$         9,988


$    13,959


$       13,679

    Real estate










       Consumer mortgages

22,988


23,635


24,690


21,543


21,084

       Home equity

2,956


2,555


3,183


3,157


3,817

       Agricultural

6,160


5,919


6,172


5,180


1,546

       Commercial and industrial-owner occupied

12,585


7,558


10,215


15,135


10,791

       Construction, acquisition and development

2,197


1,771


2,223


1,466


7,022

       Commercial real estate

4,318


4,645


6,418


13,638


13,402

    Credit cards

74


126


122


87


161

    All other

435


811


574


274


310

         Total nonaccrual loans and leases

$    61,891


$       55,796


$       63,585


$    74,439


$       71,812











  Loans and Leases 90+ Days Past Due, Still Accruing:

8,503


1,855


1,793


3,063


3,983

  Restructured Loans and Leases, Still Accruing

8,060


7,366


6,303


4,060


26,047

     Total non-performing loans and leases

78,454


65,017


71,681


81,562


101,842











OTHER REAL ESTATE OWNED:

6,038


5,956


7,704


8,458


7,810











Total Non-performing Assets

$    84,492


$       70,973


$       79,385


$    90,020


$      109,652











Additions to Nonaccrual Loans and Leases During the Quarter

$    20,799


$       16,975


$       17,020


$    23,348


$       16,007











  Loans and Leases 30-89 Days Past Due, Still Accruing:










    Commercial and industrial

$      1,990


$         3,791


$         3,304


$      4,083


$         3,449

    Real estate










       Consumer mortgages

15,080


18,603


12,395


10,149


14,490

       Home equity

1,858


2,042


2,590


1,720


3,072

       Agricultural

191


476


197


364


1,283

       Commercial and industrial-owner occupied

1,655


4,453


2,228


1,949


2,120

       Construction, acquisition and development

1,386


4,464


2,639


3,306


1,344

       Commercial real estate

1,200


1,206


1,183


2,631


653

    Credit cards

851


720


705


800


726

    All other

951


699


1,203


776


673

         Total Loans and Leases 30-89 days past due, still accruing

$    25,162


$       36,454


$       26,444


$    25,778


$       27,810











Credit Quality Ratios:










Provision for credit losses to average loans and leases (annualized)

0.02%


0.02%


0.04%


0.04%


0.04%

Allowance for credit losses to net loans and leases

1.07%


1.08%


1.10%


1.16%


1.14%

Allowance for credit losses to non-performing loans and leases

150.66%


183.79%


169.59%


153.50%


121.50%

Allowance for credit losses to non-performing assets

139.89%


168.37%


153.13%


139.08%


112.84%

Non-performing loans and leases to net loans and leases

0.71%


0.59%


0.65%


0.76%


0.94%

Non-performing assets to net loans and leases

0.76%


0.64%


0.72%


0.83%


1.01%

 

 

 

BancorpSouth Bank





Selected Loan Data





(Dollars in thousands)





(Unaudited)




















December 31, 2017




Special












Pass


Mention


Substandard


Doubtful


Loss


Impaired


Total

LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE:














Commercial and industrial

$  1,434,663


$                -


$       38,210


$        501


$                -


$    6,905


$   1,480,279

Real estate














   Consumer mortgages

2,802,397


-


60,606


203


-


1,417


2,864,623

   Home equity

629,010


-


8,683


-


-


701


638,394

   Agricultural

228,618


-


9,622


-


-


5,209


243,449

   Commercial and industrial-owner occupied

1,775,772


-


61,435


-


269


8,609


1,846,085

   Construction, acquisition and development

1,134,637


3,718


14,208


-


-


624


1,153,187

   Commercial real estate

2,303,569


1,220


38,096


-


-


2,346


2,345,231

Credit cards

107,848


-


-


-


-


-


107,848

All other

362,599


-


14,739


-


-


-


377,338

     Total loans

$ 10,779,113


$         4,938


$      245,599


$        704


$            269


$  25,811


$ 11,056,434






























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

 

 

 

BancorpSouth Bank

Geographical Information

(Dollars in thousands)

(Unaudited)




















December 31, 2017


Alabama


















and Florida


















Panhandle


Arkansas


Louisiana


Mississippi


Missouri


Tennessee


Texas


Other


Total

LOAN AND LEASE PORTFOLIO:


















Commercial and industrial

$   123,841


$   175,017


$   189,170


$   570,462


$     72,130


$   104,989


$   196,142


$     48,528


$  1,480,279

Real estate


















   Consumer mortgages

390,516


331,014


240,590


882,222


97,509


323,233


549,438


50,101


2,864,623

   Home equity

100,304


46,898


72,089


234,481


21,062


141,025


20,555


1,980


638,394

   Agricultural

7,344


85,496


23,675


66,029


6,347


12,139


42,100


319


243,449

   Commercial and industrial-owner occupied

211,087


199,811


223,567


719,218


49,010


151,199


292,193


-


1,846,085

   Construction, acquisition and development

102,390


76,405


57,157


339,864


17,816


172,612


386,943


-


1,153,187

   Commercial real estate

319,504


343,929


231,365


553,021


212,227


214,050


471,135


-


2,345,231

Credit cards

-


-


-


-


-


-


-


107,848


107,848

All other

50,065


39,942


22,385


195,594


2,914


21,833


38,073


6,532


377,338

     Total loans

$ 1,305,051


$ 1,298,512


$ 1,059,998


$3,560,891


$   479,015


$ 1,141,080


$ 1,996,579


$   215,308


$ 11,056,434



















NON-PERFORMING LOANS AND LEASES:


















Commercial and industrial

$         585


$       1,330


590


$      3,759


$       3,350


$         120


$       1,034


$         774


$       11,542

Real estate


















   Consumer mortgages

2,734


4,694


1,040


12,316


653


2,902


6,704


381


31,424

   Home equity

402


700


1,061


672


119


92


-


2


3,048

   Agricultural

50


495


206


5,397


-


-


26


-


6,174

   Commercial and industrial-owner occupied

49


2,330


586


4,605


4,126


1,087


3,139


-


15,922

   Construction, acquisition and development

41


878


471


264


-


-


722


-


2,376

   Commercial real estate

778


1,070


855


3,130


-


-


-


-


5,833

Credit cards

-


-


-


-


-


-


-


1,236


1,236

All other

13


-


8


556


-


317


5


-


899

     Total loans

$       4,652


$     11,497


$       4,817


$    30,699


$       8,248


$       4,518


$     11,630


$       2,393


$       78,454



















NON-PERFORMING LOANS AND LEASES


















   AS A PERCENTAGE OF OUTSTANDING:


















Commercial and industrial

0.47%


0.76%


0.31%


0.66%


4.64%


0.11%


0.53%


1.59%


0.78%

Real estate


















   Consumer mortgages

0.70%


1.42%


0.43%


1.40%


0.67%


0.90%


1.22%


0.76%


1.10%

   Home equity

0.40%


1.49%


1.47%


0.29%


0.56%


0.07%


0.00%


0.10%


0.48%

   Agricultural

0.68%


0.58%


0.87%


8.17%


0.00%


0.00%


0.06%


0.00%


2.54%

   Commercial and industrial-owner occupied

0.02%


1.17%


0.26%


0.64%


8.42%


0.72%


1.07%


N/A


0.86%

   Construction, acquisition and development

0.04%


1.15%


0.82%


0.08%


0.00%


0.00%


0.19%


N/A


0.21%

   Commercial real estate

0.24%


0.31%


0.37%


0.57%


0.00%


0.00%


0.00%


N/A


0.25%

Credit cards

N/A


N/A


N/A


N/A


N/A


N/A


N/A


1.15%


1.15%

All other

0.03%


0.00%


0.04%


0.28%


0.00%


1.45%


0.01%


0.00%


0.24%

     Total loans

0.36%


0.89%


0.45%


0.86%


1.72%


0.40%


0.58%


1.11%


0.71%



















 

 

 

BancorpSouth Bank





Noninterest Revenue and Expense





(Dollars in thousands)





(Unaudited)




















Quarter Ended


Year Ended


Dec-17


Sep-17


Jun-17


Mar-17


Dec-16


Dec-17


Dec-16

NONINTEREST REVENUE:














Mortgage banking excl. MSR and MSR Hedge market value adj

$      4,868


$         6,955


$         7,643


$      8,056


$         5,561


$  27,522


$  36,597

MSR and MSR Hedge market value adjustment

2,378


(46)


(1,509)


934


11,242


1,757


1,009

Credit card, debit card and merchant fees

9,530


9,346


9,565


8,903


9,262


37,344


37,010

Deposit service charges

10,257


10,388


9,706


9,689


9,956


40,040


43,301

Securities gains, net

523


5


23


1,071


39


1,622


128

Insurance commissions

25,758


28,616


31,126


32,940


25,709


118,440


115,955

Trust income

3,985


3,803


3,679


3,561


3,874


15,028


14,438

Annuity fees

216


246


264


349


257


1,075


1,645

Brokerage commissions and fees

1,418


1,337


1,332


1,264


1,270


5,351


5,086

Bank-owned life insurance

1,732


2,700


1,710


1,669


2,104


7,811


7,585

Other miscellaneous income

2,409


2,610


4,591


2,433


2,701


12,043


12,147

     Total noninterest revenue

$    63,074


$       65,960


$       68,130


$    70,869


$       71,975


$ 268,033


$ 274,901















NONINTEREST EXPENSE:














Salaries and employee benefits

$    78,142


$       81,415


$       81,597


$    81,386


$       80,850


$ 322,540


$ 324,088

Occupancy, net of rental income

10,064


10,343


10,455


10,302


10,294


41,164


41,088

Equipment

3,710


3,352


3,438


3,568


3,563


14,068


14,046

Deposit insurance assessments

2,659


2,499


2,261


2,484


1,818


9,903


9,915

Regulatory settlement

-


-


-


-


-


-


10,277

Advertising

1,671


1,185


1,037


663


2,443


4,556


5,044

Foreclosed property expense

1,035


447


960


1,050


1,005


3,492


4,354

Telecommunications

1,219


1,192


1,233


1,147


1,245


4,791


5,087

Public relations

705


675


654


720


716


2,754


2,694

Data processing

6,855


6,942


7,230


6,623


6,903


27,650


26,835

Computer software

3,172


3,074


2,913


2,981


3,013


12,140


11,381

Amortization of intangibles

979


994


1,010


1,030


963


4,013


3,635

Legal

1,326


1,016


1,330


1,229


1,190


4,901


8,543

Merger expense

688


-


-


-


-


688


2

Postage and shipping

1,092


1,050


1,080


1,175


1,075


4,397


4,236

Other miscellaneous expense

12,564


12,719


12,355


12,751


15,441


50,389


56,684

     Total noninterest expense

$  125,881


$      126,903


$      127,553


$  127,109


$      130,519


$ 507,446


$ 527,909















INSURANCE COMMISSIONS:














Property and casualty commissions

$    18,667


$       21,086


$       22,363


$    19,755


$       19,098


81,871


$  80,319

Life and health commissions

5,900


6,134


6,623


6,465


5,757


25,122


23,521

Risk management income

608


703


600


648


610


2,559


2,499

Other

583


693


1,540


6,072


244


8,888


9,616

     Total insurance commissions

$    25,758


$       28,616


$       31,126


$    32,940


$       25,709


$ 118,440


$ 115,955

 

 

 

BancorpSouth Bank

Selected Additional Information

(Dollars in thousands)

(Unaudited)












Quarter Ended


Dec-17


Sep-17


Jun-17


Mar-17


Dec-16

MORTGAGE SERVICING RIGHTS:










Fair value, beginning of period

$     66,417


$       65,491


$       67,161


$     65,263


$       51,930

Additions to mortgage servicing rights:










   Originations of servicing assets

3,011


3,393


2,772


2,866


4,022

Changes in fair value:










   Due to payoffs/paydowns

(2,659)


(2,502)


(2,825)


(1,876)


(2,447)

   Due to change in valuation inputs or










     assumptions used in the valuation model

2,422


36


(1,616)


909


11,759

   Other changes in fair value

(1)


(1)


(1)


(1)


(1)

Fair value, end of period

$     69,190


$       66,417


$       65,491


$     67,161


$       65,263











MORTGAGE BANKING REVENUE:










Production revenue:










   Origination

$       2,824


$         4,809


$         5,771


$       5,117


$         3,335

   Servicing

4,703


4,648


4,697


4,815


4,673

   Payoffs/Paydowns

(2,659)


(2,502)


(2,825)


(1,876)


(2,447)

     Total production revenue

4,868


6,955


7,643


8,056


5,561

Market value adjustment on MSR

2,422


36


(1,616)


909


11,759

Market value adjustment on MSR Hedge

(44)


(82)


107


25


(517)

Total mortgage lending revenue

$       7,246


$         6,909


$         6,134


$       8,990


$       16,803































Mortgage loans serviced

$ 6,533,642


$   6,506,550


$   6,431,273


$ 6,429,617


$   6,384,649

MSR/mtg loans serviced

1.06%


1.02%


1.02%


1.04%


1.01%











AVAILABLE-FOR-SALE SECURITIES, at fair value










U.S. Government agencies

$ 2,214,995


$   1,687,186


$   1,713,374


$ 1,818,180


$   1,789,427

Government agency issued residential










   mortgage-back securities

148,548


157,891


159,246


167,542


176,243

Government agency issued commercial










   mortgage-back securities

122,068


153,509


170,642


170,082


172,279

Obligations of states and political subdivisions

312,931


328,314


345,130


352,324


360,005

Other

36,825


33,067


32,903


32,759


33,722

Total available-for-sale securities

$ 2,835,367


$   2,359,967


$   2,421,295


$ 2,540,887


$   2,531,676

 

 

 

BancorpSouth Bank

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 Ended




12/31/2017


9/30/2017


6/30/2017


3/31/2017


12/31/2016


12/31/2017


12/31/2016

















Net income


$      37,523


$   39,528


$          37,889


$          38,093


$          37,670


$         153,033


$       132,728

Plus:

Merger expense, net of tax


427


-


-


-


-


427


2


Regulatory related charges, net of tax


-


-


-


-


-


-


9,412


Changes due to tax reform


623


-


-


-


-


623


-

Less:

Security gains, net of tax


325


3


14


664


25


1,006


80

Net operating income


$      38,248


$   39,525


$          37,875


$          37,429


$          37,645


$         153,077


$       142,062

















Less:

MSR market value adjustment, net of tax


1,476


(28)


(936)


579


6,970


1,091


626

Net operating income-excluding MSR


$      36,772


$   39,553


$          38,811


$          36,850


$          30,675


$         151,986


$       141,436

































Reconciliation of Total Operating Expense to Total Noninterest Expense:
























Total noninterest expense


$    125,881


$ 126,903


$        127,553


$         127,109


$         130,519


$         507,446


$       527,909

Less:

Merger expense


688


-


-


-


-


688


2


Regulatory related charges


-


-


-


-


-


-


13,777

Total operating expense


$    125,193


$ 126,903


$        127,553


$         127,109


$         130,519


$         506,758


$       514,130

 

 

 

BancorpSouth Bank

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 Ended




12/31/2017


9/30/2017


6/30/2017


3/31/2017


12/31/2016


12/31/2017


12/31/2016

Tangible assets















Total assets


$ 15,298,518


$  14,760,394


$  14,843,130


$ 14,866,054


$  14,724,388


$ 15,298,518


$ 14,724,388

Less:  

Goodwill


300,798


300,798


300,798


300,798


300,798


300,798


300,798


Other identifiable intangible assets


17,882


18,860


19,854


20,865


21,894


17,882


21,894

Total tangible assets


$ 14,979,838


$  14,440,736


$  14,522,478


$ 14,544,391


$  14,401,696


$ 14,979,838


$ 14,401,696

















Tangible shareholders' equity















Total shareholders' equity


$   1,713,485


$    1,700,502


$    1,691,832


$   1,702,389


$    1,723,883


$   1,713,485


$   1,723,883

Less:

Goodwill


300,798


300,798


300,798


300,798


300,798


300,798


300,798


Other identifiable intangible assets


17,882


18,860


19,854


20,865


21,894


17,882


21,894

Total tangible shareholders' equity


$   1,394,805


$    1,380,844


$    1,371,180


$   1,380,726


$    1,401,191


$   1,394,805


$   1,401,191

















Total average assets


$ 14,809,497


$  14,710,245


$  14,741,811


$ 14,832,260


$  14,655,360


$ 14,773,217


$ 14,226,953

Total shares of common stock outstanding


90,312,378


90,329,896


91,022,729


92,344,409


93,696,687


90,312,378


93,696,687

Average shares outstanding-diluted


90,546,824


91,099,770


91,530,552


93,829,400


93,966,392


91,754,749


94,454,640

















Tangible shareholders' equity to tangible assets (1)


9.31%


9.56%


9.44%


9.49%


9.73%


9.31%


9.73%

Return on tangible equity (2)


10.67%


11.36%


11.08%


11.19%


10.70%


10.97%


9.47%

Operating return on tangible equity-excluding MSR (3)


10.46%


11.36%


11.35%


10.82%


8.71%


10.90%


10.09%

Operating return on average assets-excluding MSR (4)


0.99%


1.07%


1.06%


1.01%


0.83%


1.03%


0.99%

Operating return on average shareholders' equity-excluding MSR (5)


8.58%


9.25%


9.27%


8.63%


7.08%


8.93%


8.31%

Tangible book value per share (6)


$         15.44


$          15.29


$          15.06


$         14.95


$         14.95


$         15.44


$         14.95

Operating earnings per share (7)


$           0.42


$            0.43


$            0.41


$           0.40


$           0.40


$           1.67


$           1.51

Operating earnings per share-excluding MSR (8)


$           0.41


$            0.43


$            0.42


$           0.39


$           0.33


$           1.66


$           1.50

































(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.  

 

Cision View original content:http://www.prnewswire.com/news-releases/bancorpsouth-2017-annual-earnings-reach-new-record-declares-quarterly-dividend-300587627.html

SOURCE BancorpSouth Bank

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