BancorpSouth Announces First Quarter 2021 Results
04/21/2021 - 06:01 PM
TUPELO, Miss. , April 21, 2021 /PRNewswire/ -- BancorpSouth Bank (NYSE: BXS) (the "Company") today announced financial results for the quarter ended March 31, 2021 .
Highlights for the first quarter of 2021 included:
Achieved record quarterly net income available to common shareholders of $79.2 million , or $0.77 per diluted common share, and record net operating income available to common shareholders – excluding MSR – of $74.8 million , or $0.73 per diluted common share. Generated $99.1 million in pre-tax pre-provision net revenue (PPNR), or 1.64 percent of average assets on an annualized basis. Credit quality indicators improved as evidenced by no recorded provision for credit losses for the quarter and a decline of $21.9 million , or 16.5 percent, in total non-performing assets. Generated total deposit and customer repo growth of $1.3 billion for the quarter, or 26.7 percent on an annualized basis. Originated and funded 7,527 loans totaling $463.5 million under the Paycheck Protection Program (PPP); received PPP forgiveness payments totaling $307.9 million during the quarter. Continued strong mortgage production volume of $789.8 million which contributed to mortgage production and servicing revenue of $17.9 million . Maintained strong regulatory capital metrics; estimated total risk-based capital of 14.65 percent at March 31, 2021 compared to 14.48 percent at December 31, 2020 . Recently received regulatory approval to complete transactions with National United Bancshares, Inc., the parent company of National United, and FNS Bancshares, Inc., the parent company of FNB Bank, which are expected to close effective May 1, 2021 and add approximately $1.6 billion in total assets to the Company. On April 12, 2021 , announced the signing of a merger agreement with Cadence Bancorporation, the parent company of Cadence Bank N.A ., which creates a $44 billion institution on a pro forma basis that will be the 5th largest bank headquartered in the Company's nine-state footprint. "We are pleased to report another quarter of record financial performance," remarked Dan Rollins , Chairman and Chief Executive Officer. "While the unprecedented liquidity levels in the industry continue to pressure our net interest margin and adversely impact loan demand, our teammates are doing a great job taking care of customers and controlling the things we can control. Consistent with industry trends, we reported meaningful deposit and customer repo growth for the quarter. Our mortgage team had another outstanding quarter, while our insurance and wealth management teams reported strong revenue growth for the quarter. We also originated almost $465 million in new PPP loans during the quarter while also receiving forgiveness payments totaling over $300 million on loans that were originated last year."
"As we look at other highlights for the quarter, we are extremely pleased with credit quality. The economies across our footprint are open and generally performing quite well. Virtually all of our credit quality indicators, including non-performing and classified assets, improved which, along with the economic forecasts utilized in our modeling process, resulted in no recorded provision for credit losses for the quarter. Finally, we continue to be pleased with our efforts to improve our expense base as reflected in the meaningful decline in total non-interest expense compared to both the first and fourth quarters of last year."
Earnings Summary
The Company reported net income available to common shareholders of $79.2 million , or $0.77 per diluted common share, for the first quarter of 2021, compared with net income available to common shareholders of $21.9 million , or $0.21 per diluted common share, for the first quarter of 2020 and net income available to common shareholders of $66.4 million , or $0.65 per diluted common share, for the fourth quarter of 2020. The Company reported net operating income available to common shareholders – excluding MSR – of $74.8 million , or $0.73 per diluted common share, for the first quarter of 2021, compared with $34.4 million , or $0.33 per diluted common share, for the first quarter of 2020 and $70.8 million , or $0.69 per diluted common share, for the fourth quarter of 2020.
The Company reported PPNR of $99.1 million , or 1.64 percent of average assets on an annualized basis, for the first quarter of 2021 compared to $91.7 million , or 1.74 percent of average assets on an annualized basis, for the first quarter of 2020 and $93.6 million , or 1.57 percent of average assets on an annualized basis, for the fourth quarter of 2020.
Net Interest Revenue
Net interest revenue was $172.8 million for the first quarter of 2021, an increase of 3.1 percent from $167.5 million for the first quarter of 2020 and a decrease of 2.3 percent from $176.9 million for the fourth quarter of 2020. The fully taxable equivalent net interest margin was 3.15 percent for the first quarter of 2021, compared with 3.54 percent for the first quarter of 2020 and 3.29 percent for the fourth quarter of 2020. Yields on net loans and leases were 4.53 percent for the first quarter of 2021, compared with 5.00 percent for the first quarter of 2020 and 4.55 percent for the fourth quarter of 2020, while yields on total interest earning assets were 3.51 percent for the first quarter of 2021, compared with 4.27 percent for the first quarter of 2020 and 3.70 percent for the fourth quarter of 2020. The net interest margin, excluding accretable yield, was 3.08 percent for the first quarter of 2021, compared with 3.48 percent for the first quarter of 2020 and 3.24 percent for the fourth quarter of 2020, while yields on net loans and leases, excluding accretable yield, were 4.43 percent for the first quarter of 2021, compared with 4.93 percent for the first quarter of 2020 and 4.49 percent for the fourth quarter of 2020.
The $1.1 billion in PPP loans on the balance sheet had an adverse impact of approximately six basis points on the yield on net loans and leases, excluding accretable yield, for the first quarter of 2021. Net interest income for the first quarter of 2021 included approximately $3.1 million of accelerated PPP fee income recognition resulting from the payoff of loans that were forgiven by the SBA during the quarter. The average cost of deposits was 0.33 percent for the first quarter of 2021, compared with 0.67 percent for the first quarter of 2020 and 0.38 percent for the fourth quarter of 2020.
Balance Sheet Activity
Loans and leases, net of unearned income, increased $16.3 million during the first quarter of 2021. Excluding the impact of PPP originations and paydowns, total loans declined approximately $140.0 million compared to December 31 , 2020. Deposits and customer repos increased $1.3 billion , or 26.7 percent on an annualized basis, during the first quarter of 2021. There were no acquisitions during the first quarter of 2021.
Provision for Credit Losses and Allowance for Credit Losses
Earnings for the first quarter of 2021 reflect no provision for credit losses, compared with a provision of $46.0 million for the first quarter of 2020 and a provision of $5.0 million for the fourth quarter of 2020. Net charge-offs for the first quarter of 2021 were $3.3 million , or 0.09 percent of net loans and leases on an annualized basis, compared with net charge-offs of $13.7 million for the first quarter of 2020 and net charge-offs of $11.2 million for the fourth quarter of 2020. The allowance for credit losses was $241.1 million , or 1.60 percent of net loans and leases, at March 31, 2021 , compared with $218.2 million , or 1.53 percent of net loans and leases, at March 31, 2020 , and $244.4 million , or 1.63 percent of net loans and leases, at December 31, 2020 . The allowance for credit losses coverage, excluding the impact of PPP loans, was 1.74 percent of net loans and leases at March 31 , 2021.
Total non-performing assets were $110.7 million , or 0.43 percent of total assets, at March 31, 2021 , compared with $137.8 million , or 0.66 percent of total assets, at March 31, 2020 , and $132.6 million , or 0.55 percent of total assets, at December 31 , 2020. Other real estate owned was $9.4 million at March 31, 2021 , compared with $9.2 million at March 31, 2020 and $11.4 million at December 31, 2020 .
Noninterest Revenue
Noninterest revenue was $87.9 million for the first quarter of 2021, compared with $76.5 million for the first quarter of 2020 and $78.8 million for the fourth quarter of 2020. These results include a positive mortgage servicing rights (MSR) valuation adjustment of $7.4 million for the first quarter of 2021, compared with a negative MSR valuation adjustment of $11.1 million for the first quarter of 2020 and a positive MSR valuation adjustment of $0.2 million for the fourth quarter of 2020. Valuation adjustments in the MSR asset are driven primarily by fluctuations in interest rates period over period.
Mortgage production and servicing revenue was $17.9 million for the first quarter of 2021, compared with $20.6 million for the first quarter of 2020 and $19.9 million for the fourth quarter of 2020. Mortgage origination volume for the first quarter of 2021 was $789.8 million , compared with $477.1 million for the first quarter of 2020 and $845.9 million for the fourth quarter of 2020. Home purchase money volume was $379.4 million for the first quarter of 2021, compared with $285.3 million for the first quarter of 2020 and $466.4 million for the fourth quarter of 2020. Of the total mortgage origination volume for the first quarter of 2021, $149.0 million was portfolio loans, compared with $85.6 million for the first quarter of 2020 and $157.8 million for the fourth quarter of 2020.
Credit card, debit card, and merchant fee revenue was $9.7 million for the first quarter of 2021, compared with $9.2 million for the first quarter of 2020 and $10.1 million for the fourth quarter of 2020. Deposit service charge revenue was $8.5 million for the first quarter of 2021, compared with $11.7 million for the first quarter of 2020 and $9.7 million for the fourth quarter of 2020. Wealth management revenue was $8.5 million for the first quarter of 2021, compared with $6.6 million for the first quarter of 2020 and $6.8 million for the fourth quarter of 2020. Insurance commission revenue was $30.7 million for the first quarter of 2021, compared with $29.6 million for the first quarter of 2020 and $29.8 million for the fourth quarter of 2020. Other noninterest revenue was $5.3 million for the first quarter of 2021, compared with $10.1 million for the first quarter of 2020 and $2.3 million for the fourth quarter of 2020. Other noninterest revenue for the fourth quarter of 2020 was adversely impacted by $2.7 million of book amortization associated with a historic tax credit. A related benefit of $3.0 million was recorded as a reduction to income tax expense for the fourth quarter of 2020. Other noninterest revenue for the first quarter of 2020 included a $4.2 million gain associated with the sale of a book of business within the Company's insurance agency.
Noninterest Expense
Noninterest expense for the first quarter of 2021 was $155.8 million , compared with $168.0 million for the first quarter of 2020 and $167.9 million for the fourth quarter of 2020. Salaries and employee benefits expense was $101.1 million for the first quarter of 2021, compared with $108.3 million for the first quarter of 2020 and $97.2 million for the fourth quarter of 2020. Occupancy expense was $12.8 million for the first quarter of 2021, compared with $12.7 million for the first quarter of 2020 and $13.0 million for the fourth quarter of 2020. Other noninterest expense was $35.9 million for the first quarter of 2021, compared with $40.8 million for the first quarter of 2020 and $45.4 million for the fourth quarter of 2020. Additionally, merger-related expense for the first quarter of 2021 was $1.6 million , compared with merger-related expense of $4.5 million for the first quarter of 2020 and $0.2 million for the fourth quarter of 2020.
Noninterest expense for the first quarter of 2021 and the fourth quarter of 2020 included certain items that were non-routine in nature as defined by the Company. Salaries and benefits expense for the first quarter of 2021 benefited from an accrual true-up totaling approximately $3.0 million related to the Company's equity compensation plans. During the fourth quarter of 2020, the Company recorded a charge of $5.8 million in accordance with ASC 715 "Compensation – Retirement Benefits" to reflect the settlement accounting impact of an elevated number of retirements and related lump sum pension payouts during the quarter. Salaries and employee benefits expense was positively impacted by accrual true ups totaling approximately $6.7 million relating to incentive compensation and other employee benefits. Other non-interest expense included charges and write-downs totaling approximately $5.0 million associated with the anticipated disposition of certain facilities and other fixed assets, including fixed assets associated with branches identified for closure.
Capital Management
The Company's ratio of shareholders' equity to assets was 10.95 percent at March 31, 2021 , compared with 12.75 percent at March 31, 2020 and 11.72 percent at December 31 , 2020. The ratio of tangible common shareholders' equity to tangible assets was 7.04 percent at March 31, 2021 , compared with 7.99 percent at March 31, 2020 and 7.54 percent at December 31 , 2020. The $1.1 billion in PPP loans had an adverse impact of approximately 34 basis points on tangible common shareholders' equity to tangible assets at March 31, 2021 .
During the first quarter of 2021, the Company did not repurchase any shares of its common stock pursuant to its share repurchase program. The Company has 6.0 million shares remaining on its current share repurchase authorization which will expire on December 31, 2021 .
Estimated regulatory capital ratios at March 31, 2021 were calculated in accordance with the Basel III capital framework as well as the interagency final rule published on September 30, 2020 entitled "Revised Transition of the Current Expected Credit Losses Methodology for Allowances". The Company is a "well capitalized" bank, as defined by federal regulations, at March 31, 2021 , with Tier 1 risk-based capital of 11.95 percent and total risk-based capital of 14.65 percent, compared with required minimum levels of 8 percent and 10 percent, respectively, in order to qualify for "well capitalized" classification.
Summary
Rollins concluded, "It's an exciting time for our Company. The economies in our markets are performing quite well and, despite certain industry headwinds, we continue to be pleased with our financial performance. We look forward to the growth opportunities ahead of us. The recent merger announcement with Cadence is a transformational opportunity for our Company. We believe the strengths of each organization are complementary. Both organizations are highly focused on improving the customer experience and giving back to the communities we serve. We are also excited about the opportunity to complete our pending mergers with National United and FNB Bank next month. These two teams will be an integral part of our strategic efforts going forward as we continue to grow our Company and enhance shareholder value."
TRANSACTIONS
Cadence Bancorporation (NYSE: CADE)
On April 12, 2021 , the Company announced the signing of a definitive merger agreement (the Cadence Merger Agreement) with Cadence Bancorporation, the parent company of Cadence Bank N.A ., (collectively referred to as Cadence), pursuant to which Cadence will be merged with and into the Company (the Cadence Merger). Cadence operates 98 full-service banking offices in the southeast. As of December 31, 2020 , Cadence collectively reported total assets of $18.7 billion , total loans of $12.7 billion and total deposits of $16.1 billion . Under the terms of the Cadence Merger Agreement, each Cadence shareholder will receive 0.70 shares of the Company's common stock. In addition, Cadence will pay a one-time special dividend of $1.25 per share at closing. For more information regarding the Cadence Merger, see our Current Report on Form 8-K that was filed with the Federal Deposit Insurance Corporation (FDIC) on April 12 , 2021. The Cadence Merger Agreement has been unanimously approved by the Boards of Directors of the Company and Cadence. Subject to the satisfaction of all closing conditions, including the receipt of all required regulatory and shareholder approvals, the Cadence Merger is expected to be completed during the fourth quarter of 2021, although the Company can provide no assurance that the Cadence Merger will close during this time period or at all.
FNS Bancshares, Inc.
On January 13, 2021 , the Company announced the signing of a definitive merger agreement (the FNS Merger Agreement) with FNS Bancshares, Inc., the parent company of FNB Bank, (collectively referred to as FNS), pursuant to which FNS will be merged with and into the Company (the FNS Merger). FNS operates 17 full-service banking offices in Alabama , Georgia and Tennessee. The merger will expand the Company's presence in Jackson , DeKalb and Marshall counties in Alabama and the Chattanooga, Tennessee -Georgia and Nashville -Davidson -Murfreesboro -Franklin, Tennessee metropolitan statistical areas. As of March 31, 2021 , FNS collectively reported total assets of $826.5 million , total loans of $475.1 million and total deposits of $709.9 million . Under the terms of the FNS Merger Agreement, the Company will issue approximately 2,975,000 shares of the Company's common stock plus $18.0 million in cash for all outstanding shares of FNS. For more information regarding the FNS Merger, see our Current Report on Form 8-K that was filed with the FDIC on January 13 , 2021. Subject to the satisfaction of all closing conditions, the FNS Merger is expected to close on May 1, 2021 .
National United Bancshares, Inc.
On December 2, 2020 , the Company announced the signing of a definitive merger agreement (the National United Merger Agreement) with National United Bancshares, Inc., the parent company of National United, (collectively referred to as National United), pursuant to which National United will be merged with and into the Company (the National United Merger). National United operates 6 full-service banking offices in the Killeen -Temple, Texas ; Waco, Texas ; and Austin -Round Rock -Georgetown, Texas metropolitan statistical areas. As of March 31, 2021 , National United collectively reported total assets of $788.9 million , total loans of $440.6 million and total deposits of $712.8 million . Under the terms of the National United Merger Agreement, the Company will issue approximately 3,110,000 shares of the Company's common stock plus $33.25 million in cash for all outstanding shares of National United. For more information regarding National United Merger, see our Current Report on Form 8-K that was filed with the FDIC on December 2 , 2020. Subject to the satisfaction of all closing conditions, the National United Merger is expected to close on May 1, 2021 .
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 24 of this news release.
Statement Regarding Impact of COVID-19 Pandemic
The Company prioritizes the health and safety of its teammates and customers, and it will continue to do so throughout the duration of the COVID-19 pandemic. At the same time, the Company remains focused on improving shareholder value, managing credit exposure, challenging expenses, enhancing the customer experience and supporting the communities it serves. Lastly, as a SBA Preferred Lender, the Company is an active participant in the SBA's PPP for the betterment of its customers and the communities that it serves.
In the presentation that accompanies this news release and in its earnings conference call, the Company has sought and will seek to describe the historical and future impact of the COVID-19 pandemic on the Company's assets, business, cash flows, financial condition, liquidity, prospects and results of operations, including the information and discussions regarding negative pressure on its net interest margin and loan demand. Although the Company believes that the statements that pertain to future events, results and trends and their impact on the Company's business are reasonable at the present time, those statements are not historical facts and are based upon current assumptions, expectations, estimates and projections, many of which, by their nature, are beyond the Company's control. Accordingly, all discussions regarding future events, results and trends and their impact on the Company's business, even in the near term, are necessarily uncertain given the fluid and evolving nature of the pandemic.
If the health, logistical or economic effects of the pandemic worsen, or if the assumptions, expectations, estimates or projections that underlie the Company's statements regarding future effects or trends prove to be incorrect, then the Company's actual assets, business, cash flows, financial condition, liquidity, prospects and results of operations and the trading prices of its capital stock may be materially and adversely impacted in ways that the Company cannot reasonably forecast.
Accordingly, when reading this news release and the accompanying presentation and when listening to the earnings conference call, undue reliance should not be placed upon any statement pertaining to future events, results and trends and their impact on the Company's business in future periods.
Conference Call and Webcast
The Company will conduct a conference call to discuss its first quarter 2021 financial results on April 22, 2021 , at 10:00 a.m. (Central Time) . This conference call will be an interactive session between management and analysts. Interested parties may listen to this live conference call via Internet webcast by accessing www.bancorpsouth.investorroom.com/webcasts . 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 $26 billion in assets. BancorpSouth operates approximately 300 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 and Instagram: @MyBXS; or connect with us through LinkedIn.
Forward-Looking Statements
Certain statements made in this news release are not statements of historical fact and constitute "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and are subject to the safe harbor created thereby under the Private Securities Litigation Reform Act of 1995. These statements are often, but not always, made through the use of words or phrases such as "anticipate," "aspire," "assume," "believe," "budget," "contemplate," "continue," "could," "estimate," "expect," "forecast," "foresee," "goal," "hope," "indicate," "intend," "may," "might," "outlook," "plan," "project," "projection," "predict," "prospect," "potential," "roadmap," "seek," "should," "target," "will," and "would," or the negative versions of those words or other comparable words of a future or forward-looking nature. These forward-looking statements include, without limitation, discussions regarding general economic, interest rate, real estate market, competitive, employment, and credit market conditions, including the impact of the COVID-19 pandemic on the Company's business; the Company's: assets; business; cash flows; financial condition; liquidity; prospects; results of operations; deposit and customer repo growth; interest and fee-based revenue; capital resources; capital metrics; efficiency ratio; valuation of mortgage servicing rights; net income; net interest revenue; non-interest revenue; net interest margin; interest expense; non-interest expense; earnings per share; interest rate sensitivity; interest rate risk; balance sheet and liquidity management; off-balance sheet arrangements; fair value determinations; asset quality; credit quality; credit losses; provision and allowance for credit losses, impairments, charge-offs, recoveries and changes in loan volumes; investment securities portfolio yields and values; ability to manage the impact of pandemics, natural disasters and other force majeure events; adoption and use of critical accounting policies; adoption and implementation of new accounting standards and their effect on the Company's financial results and the Company's financial reporting; utilization of non-GAAP financial metrics; declaration and payment of dividends; ability to pay dividends or coupons on the Company's 5.5% Series A Non-Cumulative Perpetual Preferred Stock, par value $0.01 per share, or the 4.125% Fixed-to-Floating Rate Subordinated Notes due November 20, 2029 ; mortgage origination volume; mortgage servicing and production revenue; insurance commission revenue; implementation and execution of cost savings initiatives; ability to successfully litigate, resolve or otherwise dispense with threatened, pending, ongoing and future litigation and governmental, administrative and investigatory matters; ability to successfully complete pending or future acquisitions, dispositions and other strategic growth opportunities and initiatives; ability to successfully obtain regulatory approval for acquisitions and other growth initiatives; ability to successfully integrate and manage acquisitions; opportunities and efforts to grow market share; reputation; ability to compete with other financial institutions; ability to recruit and retain key employees and personnel; access to capital markets; availability of capital; investments in the securities of other financial institutions; and ability to operate the Company's regulatory compliance programs in accordance with applicable law.
Forward-looking statements are based upon management's expectations as well as certain assumptions and estimates made by, and information available to, the Company's management at the time such statements were made. Forward-looking statements are not historical facts, are not guarantees of future results or performance and are subject to certain known and unknown risks, uncertainties and other factors that are beyond the Company's control and that may cause actual results to differ materially from those expressed in, or implied by, such forward-looking statements. These risks, uncertainties and other factors include, without limitation, potential delays or other problems in implementing and executing the Company's growth, expansion and acquisition strategies, including delays in obtaining regulatory or other necessary approvals or the failure to realize any anticipated benefits or synergies from any acquisitions or growth strategies; the risks of changes in interest rates and their effects on the level and composition of deposits, loan demand and the values of loan collateral, securities and interest sensitive assets and liabilities; the failure of assumptions underlying the establishment of reserves for possible credit losses, fair value for loans and other real estate owned; changes in real estate values; the availability of and access to capital; possible downgrades in the Company's credit ratings or outlook which could increase the costs or availability of funding from capital markets; the ability to attract new or retain existing deposits or to retain or grow loans; the ability to grow additional interest and fee income or to control noninterest expense; the potential impact of the proposed phase-out of the London Interbank Offered Rate ("LIBOR") or other changes involving LIBOR; competitive factors and pricing pressures, including their effect on the Company's net interest margin; general economic, unemployment, credit market and real estate market conditions, and the effect of such conditions on the creditworthiness of borrowers, collateral values, the value of investment securities and asset recovery values; changes in legal, financial and/or regulatory requirements; recently enacted and potential legislation and regulatory actions and the costs and expenses to comply with new and/or existing legislation and regulatory actions, including those actions in response to the COVID-19 pandemic such as the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"), the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (the "Economic Aid Act") and any related rules and regulations; changes in U.S. Government monetary and fiscal policy; FDIC special assessments or changes to regular assessments; the enforcement efforts of federal and state bank regulators; possible adverse rulings, judgments, settlements and other outcomes of pending, ongoing and future litigation and governmental, administrative and investigatory matters (including litigation or actions arising from the Company's participation in and administration of programs related to the COVID-19 pandemic (including, among other things, the PPP loan programs authorized by the CARES Act and the Economic Aid Act); the ability to keep pace with technological changes, including changes regarding maintaining cybersecurity; the impact of failure in, or breach of, the Company's operational or security systems or infrastructure, or those of third parties with whom the Company does business, including as a result of cyber-attacks or an increase in the incidence or severity of fraud, illegal payments, security breaches or other illegal acts impacting the Company or the Company's customers; natural disasters or acts of war or terrorism; the adverse effects of the ongoing global COVID-19 pandemic, including the magnitude and duration of the pandemic, and the effect of actions taken to mitigate the impact of the COVID-19 pandemic on the Company, the Company's employees, the Company's customers, the global economy and the financial markets; international or political instability; impairment of the Company's goodwill or other intangible assets; losses of key employees and personnel; adoption of new accounting standards, including the effects from the adoption of the current expected credit loss methodology on January 1, 2020 , or changes in existing standards; the occurrence of any event, change or other circumstances that could give rise to the right of one or both of the parties to terminate the definitive merger agreement between the Company and Cadence; the outcome of any legal proceedings that may be instituted against the Company or Cadence; the possibility that the proposed transaction will not close when expected or at all because required regulatory, shareholder or other approvals are not received or other conditions to the closing are not satisfied on a timely basis or at all, or are obtained subject to conditions that are not anticipated; the ability of the Company and Cadence to meet expectations regarding the timing, completion and accounting and tax treatments of the proposed transaction; the risk that any announcements relating to the proposed transaction could have adverse effects on the market price of the common stock of either or both parties to the proposed transaction; the possibility that the anticipated benefits of the proposed transaction will not be realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors in the areas where the Company and Cadence do business; certain restrictions during the pendency of the proposed transaction that may impact the parties' ability to pursue certain business opportunities or strategic transactions; the possibility that the transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; diversion of management's attention from ongoing business operations and opportunities; the possibility that the parties may be unable to achieve expected synergies and operating efficiencies in the merger within the expected timeframes or at all and to successfully integrate Cadence's operations and those of the Company; such integration may be more difficult, time consuming or costly than expected; revenues following the proposed transaction may be lower than expected; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the proposed transaction; the Company and Cadence's success in executing their respective business plans and strategies and managing the risks involved in the foregoing; the dilution caused by the Company's issuance of additional shares of its capital stock in connection with the proposed transaction and other factors as detailed from time to time in the Company's press and news releases, periodic and current reports and other filings the Company files with the FDIC.
The foregoing factors should not be construed as exhaustive and should be read in conjunction with those factors that are set forth from time to time in the Company's periodic and current reports filed with the FDIC, including those factors included in the Company's Annual Report on Form 10-K for the year ended December 31, 2020 under the heading "Item 1A. Risk Factors," in the Company's Quarterly Reports on Form 10-Q and in the Company's Current Reports on Form 8-K.
Although the Company believes that the expectations reflected in these forward-looking statements are reasonable as of the date of this news release, if one or more events related to these or other risks or uncertainties materialize, or if the Company's underlying assumptions prove to be incorrect, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. Accordingly, undue reliance should not be placed on any forward-looking statements. The forward-looking statements speak only as of the date of this news release, and the Company does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by applicable law. New risks and uncertainties may emerge from time to time, and it is not possible for the Company to predict their occurrence or how they will affect the Company. All written or oral forward-looking statements attributable to the Company are expressly qualified in their entirety by this section.
BancorpSouth Bank
Selected Financial Information
(Dollars in thousands, except per share data)
(Unaudited)
Quarter Ended
Quarter Ended
Quarter Ended
Quarter Ended
Quarter Ended
3/31/2021
12/31/2020
9/30/2020
6/30/2020
3/31/2020
Earnings Summary:
Interest revenue
$ 192,783
$ 199,287
$ 200,670
$ 197,472
$ 202,064
Interest expense
19,994
22,351
24,739
26,902
34,534
Net interest revenue
172,789
176,936
175,931
170,570
167,530
Provision for credit losses
-
5,000
15,000
20,000
46,000
Net interest revenue, after provision
for credit losses
172,789
171,936
160,931
150,570
121,530
Noninterest revenue
87,936
78,826
89,924
91,258
76,496
Noninterest expense
155,823
167,911
155,505
162,504
168,006
Income before income taxes
104,902
82,851
95,350
79,324
30,020
Income tax expense
23,347
14,046
21,525
18,164
5,759
Net income
$ 81,555
$ 68,805
$ 73,825
$ 61,160
$ 24,261
Less: Preferred dividends
2,372
2,372
2,372
2,372
2,372
Net income available to common shareholders
$ 79,183
$ 66,433
$ 71,453
$ 58,788
$ 21,889
Balance Sheet - Period End Balances
Total assets
$ 25,802,497
$ 24,081,194
$ 23,555,422
$ 23,236,176
$ 21,032,524
Total earning assets
23,542,657
21,792,725
21,340,371
21,119,073
18,939,750
Total securities
7,640,268
6,231,006
5,659,785
4,973,171
4,468,340
Loans and leases, net of unearned income
15,038,808
15,022,479
15,327,735
15,427,421
14,224,645
Allowance for credit losses
241,117
244,422
250,624
237,025
218,199
Net book value of acquired loans (included in loans and leases above)
1,023,252
1,160,267
1,320,671
1,510,008
1,661,329
Paycheck protection program (PPP) loans (included in loans and leases above)
1,146,000
975,421
1,212,246
1,192,715
-
Remaining loan mark on acquired loans
10,069
13,886
16,198
19,977
22,286
Total deposits
21,173,186
19,846,441
19,412,979
19,179,486
16,887,916
Total deposits and securities sold under agreement to repurchase
21,833,671
20,484,156
20,024,434
19,849,502
17,426,878
Long-term debt
4,295
4,402
4,508
4,615
4,721
Junior subordinated debt securities
297,425
297,250
297,074
296,898
296,723
Total shareholders' equity
2,825,198
2,822,477
2,782,539
2,732,687
2,681,904
Common shareholders' equity
2,658,205
2,655,484
2,615,546
2,565,694
2,514,911
Balance Sheet - Average Balances
Total assets
$ 24,545,560
$ 23,660,503
$ 23,318,877
$ 22,707,686
$ 21,189,637
Total earning assets
22,346,075
21,497,938
21,241,896
20,594,889
19,113,449
Total securities
6,606,027
5,820,425
5,309,982
4,437,614
4,461,298
Loans and leases, net of unearned income
15,029,076
15,219,402
15,369,684
15,114,732
14,226,788
PPP loans (included in loans and leases above)
1,062,423
1,139,959
1,207,097
975,029
-
Total deposits
20,472,080
19,600,863
19,258,930
18,454,472
16,905,229
Total deposits and securities sold under agreement to repurchase
21,123,774
20,272,881
19,940,330
19,098,599
17,446,936
Long-term debt
4,378
4,488
4,592
4,699
4,800
Junior subordinated debt securities
297,318
297,145
296,969
296,793
296,617
Total shareholders' equity
2,813,001
2,774,589
2,729,870
2,738,434
2,658,699
Common shareholders' equity
2,646,008
2,607,596
2,562,877
2,571,441
2,491,678
Nonperforming Assets:
Non-accrual loans and leases
$ 73,142
$ 96,378
$ 122,108
$ 126,753
$ 110,074
Loans and leases 90+ days past due, still accruing
21,208
14,320
17,641
9,877
7,272
Restructured loans and leases, still accruing
6,971
10,475
11,154
11,575
11,284
Non-performing loans (NPLs)
101,321
121,173
150,903
148,205
128,630
Other real estate owned
9,351
11,395
6,397
7,164
9,200
Non-performing assets (NPAs)
$ 110,672
$ 132,568
$ 157,300
$ 155,369
$ 137,830
Financial Ratios and Other Data:
Return on average assets
1.35%
1.16%
1.26%
1.08%
0.46%
Operating return on average assets-excluding MSR*
1.28%
1.23%
1.26%
1.12%
0.70%
Return on average shareholders' equity
11.76%
9.87%
10.76%
8.98%
3.67%
Operating return on average shareholders' equity-excluding MSR*
11.13%
10.49%
10.72%
9.29%
5.56%
Return on average common shareholders' equity
12.14%
10.14%
11.09%
9.19%
3.53%
Operating return on average common shareholders' equity-excluding MSR*
11.47%
10.80%
11.05%
9.53%
5.55%
Return on average tangible equity*
17.35%
14.66%
16.08%
13.43%
5.56%
Operating return on average tangible equity-excluding MSR*
16.42%
15.58%
16.03%
13.89%
8.42%
Return on average tangible common equity*
18.46%
15.54%
17.13%
14.20%
5.54%
Operating return on average tangible common equity-excluding MSR*
17.44%
16.56%
17.08%
14.71%
8.71%
Pre-tax pre-provision net revenue to total average assets*
1.64%
1.57%
1.88%
1.81%
1.74%
Noninterest income to average assets
1.45%
1.33%
1.53%
1.62%
1.45%
Noninterest expense to average assets
2.57%
2.82%
2.65%
2.88%
3.19%
Net interest margin-fully taxable equivalent
3.15%
3.29%
3.31%
3.35%
3.54%
Net interest margin-fully taxable equivalent, excluding net accretion
on acquired loans and leases
3.08%
3.24%
3.23%
3.30%
3.48%
Net interest rate spread
2.97%
3.07%
3.06%
3.08%
3.24%
Efficiency ratio (tax equivalent)*
59.64%
65.47%
58.36%
61.89%
68.65%
Operating efficiency ratio-excluding MSR (tax equivalent)*
60.74%
63.18%
58.41%
61.16%
63.89%
Loan/deposit ratio
71.03%
75.69%
78.96%
80.44%
84.23%
Price to earnings multiple (close)
12.07
12.88
9.18
11.15
9.46
Market value to common book value
125.39%
105.98%
75.99%
90.91%
77.21%
Market value to common book value (avg)
119.10%
97.56%
83.75%
84.79%
107.86%
Market value to common tangible book value
190.14%
161.00%
116.01%
140.44%
120.81%
Market value to common tangible book value (avg)
180.60%
148.21%
127.86%
130.99%
168.76%
Employee FTE
4,546
4,596
4,691
4,742
4,737
*Denotes non-GAAP financial measure. Refer to related disclosure and reconciliation on pages 24 and 25.
Credit Quality Ratios:
Net charge-offs(recoveries) to average loans and leases (annualized)
0.09%
0.29%
0.04%
0.03%
0.39%
Provision for credit losses to average loans and leases (annualized)
0.00%
0.13%
0.39%
0.53%
1.30%
Allowance for credit losses to net loans and leases
1.60%
1.63%
1.64%
1.54%
1.53%
Allowance for credit losses to net loans and leases, excluding PPP loans
1.74%
1.74%
1.78%
1.67%
1.53%
Allowance for credit losses to non-performing loans and leases
237.97%
201.71%
166.08%
159.93%
169.63%
Allowance for credit losses to non-performing assets
217.87%
184.37%
159.33%
152.56%
158.31%
Non-performing loans and leases to net loans and leases
0.67%
0.81%
0.98%
0.96%
0.90%
Non-performing loans and leases to net loans and leases, excluding
acquired loans and leases
0.54%
0.62%
0.74%
0.63%
0.64%
Non-performing assets to total assets
0.43%
0.55%
0.67%
0.67%
0.66%
Non-performing assets to total assets, excluding acquired loans and leases
0.34%
0.42%
0.49%
0.43%
0.44%
Equity Ratios:
Total shareholders' equity to total assets
10.95%
11.72%
11.81%
11.76%
12.75%
Total common shareholders' equity to total assets
10.30%
11.03%
11.10%
11.04%
11.96%
Tangible shareholders' equity to tangible assets*
7.71%
8.26%
8.30%
8.18%
8.82%
Tangible shareholders' equity to tangible assets-excluding PPP loans*
8.08%
8.63%
8.77%
8.65%
8.82%
Tangible common shareholders' equity to tangible assets*
7.04%
7.54%
7.56%
7.44%
7.99%
Tangible common shareholders' equity to tangible assets-excluding PPP loans*
7.38%
7.87%
7.99%
7.86%
7.99%
Capital Adequacy:
Common Equity Tier 1 capital
10.97%
10.74%
10.64%
10.21%
10.11%
Tier 1 capital
11.95%
11.74%
11.65%
11.22%
11.13%
Total capital
14.65%
14.48%
14.20%
13.79%
13.75%
Tier 1 leverage capital
8.59%
8.67%
8.59%
8.54%
8.90%
Estimated for current quarter
Common Share Data:
Basic earnings per share
$ 0.77
$ 0.65
$ 0.70
$ 0.57
$ 0.21
Diluted earnings per share
0.77
0.65
0.69
0.57
0.21
Operating earnings per share*
0.78
0.69
0.70
0.57
0.25
Operating earnings per share- excluding MSR*
0.73
0.69
0.69
0.59
0.33
Cash dividends per share
0.190
0.190
0.185
0.185
0.185
Book value per share
25.90
25.89
25.50
25.01
24.50
Tangible book value per share*
17.08
17.04
16.71
16.19
15.66
Market value per share (last)
32.48
27.44
19.38
22.74
18.92
Market value per share (high)
35.59
28.54
24.29
25.93
31.61
Market value per share (low)
26.95
18.77
18.11
17.21
17.24
Market value per share (avg)
30.85
25.26
21.36
21.21
26.43
Dividend payout ratio
24.62%
29.34%
26.56%
32.29%
88.20%
Total shares outstanding
102,624,818
102,561,480
102,558,459
102,566,301
102,632,484
Average shares outstanding - basic
102,622,111
102,569,547
102,564,466
102,603,525
104,354,328
Average shares outstanding - diluted
102,711,584
102,817,409
102,839,749
102,827,225
104,733,897
Yield/Rate:
(Taxable equivalent basis)
Loans, loans held for sale, and leases net of unearned income
4.53%
4.55%
4.54%
4.59%
5.00%
Loans, loans held for sale, and leases net of unearned income, excluding
net accretion on acquired loans and leases
4.43%
4.49%
4.44%
4.53%
4.93%
Loans, loans held for sale, and leases net of unearned income, excluding
net accretion on acquired loans and leases - excluding PPP loans
4.49%
4.53%
4.55%
4.67%
4.93%
PPP loans
3.69%
3.99%
3.11%
2.50%
N/A
Available-for-sale securities:
Taxable
1.32%
1.53%
1.64%
1.95%
1.99%
Tax-exempt
3.52%
3.40%
3.67%
3.86%
4.44%
Short-term, FHLB and other equity investments
0.11%
0.13%
0.19%
0.20%
1.53%
Total interest earning assets and revenue
3.51%
3.70%
3.77%
3.87%
4.27%
Deposits
0.33%
0.38%
0.44%
0.50%
0.67%
Demand - interest bearing
0.40%
0.47%
0.53%
0.61%
0.84%
Savings
0.11%
0.15%
0.18%
0.18%
0.26%
Other time
1.14%
1.28%
1.41%
1.54%
1.64%
Total interest bearing deposits
0.48%
0.57%
0.65%
0.74%
0.92%
Short-term borrowings
0.13%
0.26%
0.25%
0.39%
1.25%
Total interest bearing deposits and short-term borrowings
0.46%
0.55%
0.63%
0.71%
0.95%
Junior subordinated debt
4.46%
4.05%
4.24%
4.18%
4.42%
Long-term debt
4.88%
4.84%
4.85%
4.81%
4.96%
Total interest bearing liabilities and expense
0.54%
0.63%
0.71%
0.79%
1.03%
Interest bearing liabilities to interest earning assets
66.87%
65.99%
65.61%
66.65%
70.81%
Net interest tax equivalent adjustment
$ 569
$ 709
$ 618
$ 725
$ 714
*Denotes non-GAAP financial measure. Refer to related disclosure and reconciliation on pages 24 and 25.
BancorpSouth Bank
Consolidated Balance Sheets
(Unaudited)
Mar-21
Dec-20
Sep-20
Jun-20
Mar-20
(Dollars in thousands)
Assets
Cash and due from banks
$ 263,289
$ 284,095
$ 306,164
$ 240,354
$ 253,495
Interest bearing deposits with other banks
and Federal funds sold
336,253
133,273
39,782
318,615
29,490
Available-for-sale securities, at fair value
7,640,268
6,231,006
5,659,785
4,973,171
4,468,340
Loans and leases*
15,056,559
15,039,239
15,344,006
15,444,794
14,241,912
Less: Unearned income
17,751
16,760
16,271
17,373
17,267
Allowance for credit losses
241,117
244,422
250,624
237,025
218,199
Net loans and leases
14,797,691
14,778,057
15,077,111
15,190,396
14,006,446
Loans held for sale
518,352
397,076
304,215
391,051
194,321
Premises and equipment, net
508,508
508,147
508,149
504,748
497,669
Accrued interest receivable
106,355
106,318
110,185
101,321
70,463
Goodwill
851,612
851,612
847,531
847,984
848,242
Other identifiable intangibles
53,581
55,899
54,757
56,989
59,345
Bank owned life insurance
335,707
333,264
331,799
329,167
327,312
Other real estate owned
9,351
11,395
6,397
7,164
9,200
Other assets
381,530
391,052
309,547
275,216
268,201
Total Assets
$ 25,802,497
$ 24,081,194
$ 23,555,422
$ 23,236,176
$ 21,032,524
Liabilities
Deposits:
Demand: Noninterest bearing
$ 6,990,880
$ 6,341,457
$ 6,336,792
$ 6,385,370
$ 4,861,155
Interest bearing
9,067,373
8,524,010
8,170,402
7,907,637
7,268,053
Savings
2,678,276
2,452,059
2,325,980
2,234,853
2,013,343
Other time
2,436,657
2,528,915
2,579,805
2,651,626
2,745,365
Total deposits
21,173,186
19,846,441
19,412,979
19,179,486
16,887,916
Securities sold under agreement to repurchase
660,485
637,715
611,455
670,016
538,962
Federal funds purchased
and other short-term borrowing
-
-
95,217
220
290,224
Accrued interest payable
11,879
10,885
15,286
13,476
17,482
Junior subordinated debt securities
297,425
297,250
297,074
296,898
296,723
Long-term debt
4,295
4,402
4,508
4,615
4,721
Other liabilities
830,029
462,024
336,364
338,778
314,592
Total Liabilities
22,977,299
21,258,717
20,772,883
20,503,489
18,350,620
Shareholders' Equity
Preferred stock
166,993
166,993
166,993
166,993
166,993
Common stock
256,562
256,404
256,396
256,416
256,581
Capital surplus
563,481
565,187
565,635
561,541
558,114
Accumulated other comprehensive (loss) income
(43,459)
11,923
18,490
25,191
17,849
Retained earnings
1,881,621
1,821,970
1,775,025
1,722,546
1,682,367
Total Shareholders' Equity
2,825,198
2,822,477
2,782,539
2,732,687
2,681,904
Total Liabilities & Shareholders' Equity
$ 25,802,497
$ 24,081,194
$ 23,555,422
$ 23,236,176
$ 21,032,524
*Includes $1.146 billion , $975.4 million , $1.212 billion and $1.193 billion in PPP loans at March 31, 2021, December 31, 2020, September 30, 2020 and June 30, 2020, respectively.
BancorpSouth Bank
Consolidated Average Balance Sheets
(Unaudited)
Mar-21
Dec-20
Sep-20
Jun-20
Mar-20
(Dollars in thousands)
Assets
Cash and due from banks
$ 261,519
$ 247,799
$ 232,421
$ 229,334
$ 246,860
Interest bearing deposits with other banks
and Federal funds sold
412,313
171,650
257,057
760,789
239,766
Available-for-sale securities, at fair value
6,606,027
5,820,425
5,309,982
4,437,614
4,461,298
Loans and leases*
15,045,837
15,235,827
15,386,721
15,132,600
14,244,649
Less: Unearned income
16,761
16,425
17,037
17,868
17,861
Allowance for credit losses
242,935
247,049
236,536
217,508
193,796
Net loans and leases
14,786,141
14,972,353
15,133,148
14,897,224
14,032,992
Loans held for sale
289,755
277,600
296,352
261,377
147,798
Premises and equipment, net
508,551
508,053
507,190
499,767
494,413
Accrued interest receivable
102,190
105,513
104,435
137,456
64,010
Goodwill
851,612
852,472
847,744
848,160
844,635
Other identifiable intangibles
54,876
54,858
56,045
58,280
58,805
Bank owned life insurance
333,837
332,543
330,642
328,037
326,808
Other real estate owned
11,043
14,872
7,754
8,410
8,151
Other assets
327,696
302,365
236,107
241,238
264,101
Total Assets
$ 24,545,560
$ 23,660,503
$ 23,318,877
$ 22,707,686
$ 21,189,637
Liabilities
Deposits:
Demand: Noninterest bearing
$ 6,484,703
$ 6,391,006
$ 6,340,942
$ 5,942,570
$ 4,717,202
Interest bearing
8,956,420
8,268,528
8,022,755
7,674,479
7,466,674
Savings
2,550,095
2,386,034
2,280,860
2,152,092
1,975,690
Other time
2,480,862
2,555,295
2,614,373
2,685,331
2,745,663
Total deposits
20,472,080
19,600,863
19,258,930
18,454,472
16,905,229
Securities sold under agreement to repurchase
651,694
672,018
681,400
644,127
541,707
Federal funds purchased
and other short-term borrowing
1,500
3,893
36,696
269,121
502,257
Accrued interest payable
11,607
14,175
15,589
16,268
19,205
Junior subordinated debt securities
297,318
297,145
296,969
296,793
296,617
Long-term debt
4,378
4,488
4,592
4,699
4,800
Other liabilities
293,982
293,332
294,831
283,772
261,123
Total Liabilities
21,732,559
20,885,914
20,589,007
19,969,252
18,530,938
Shareholders' Equity
Preferred stock
166,993
166,993
166,993
166,993
167,021
Common stock
256,536
256,422
256,412
256,515
261,065
Capital surplus
563,529
568,343
563,267
559,737
600,880
Accumulated other comprehensive (loss) income
(5,090)
12,432
24,758
23,016
(36,367)
Retained earnings
1,831,033
1,770,399
1,718,440
1,732,173
1,666,100
Total Shareholders' Equity
2,813,001
2,774,589
2,729,870
2,738,434
2,658,699
Total Liabilities & Shareholders' Equity
$ 24,545,560
$ 23,660,503
$ 23,318,877
$ 22,707,686
$ 21,189,637
*Includes $1.062 billion , $1.140 billion , $1.207 billion and $975.0 million in PPP loans for the quarter ended March 31, 2021, December 31, 2020, September 30, 2020 and June 30, 2020, respectively.
BancorpSouth Bank
Consolidated Condensed Statements of Income
(Dollars in thousands, except per share data)
(Unaudited)
Quarter Ended
Mar-21
Dec-20
Sep-20
Jun-20
Mar-20
INTEREST REVENUE:
Loans and leases
$ 169,195
$ 174,072
$ 175,810
$ 173,164
$ 177,019
Deposits with other banks
108
50
74
207
739
Federal funds sold, securities purchased
under agreement to resell, FHLB and
other equity investments
6
6
52
178
315
Available-for-sale securities:
Taxable
21,192
21,895
21,280
20,783
21,508
Tax-exempt
687
760
986
1,178
1,060
Loans held for sale
1,595
2,504
2,468
1,962
1,423
Total interest revenue
192,783
199,287
200,670
197,472
202,064
INTEREST EXPENSE:
Interest bearing demand
8,796
9,766
10,773
11,631
15,522
Savings
700
872
1,012
943
1,290
Other time
6,966
8,189
9,287
10,296
11,168
Federal funds purchased and securities sold
under agreement to repurchase
203
276
279
291
1,436
Short-term and long-term debt
45
47
49
477
1,857
Junior subordinated debt
3,269
3,201
3,338
3,263
3,261
Other
15
-
1
1
-
Total interest expense
19,994
22,351
24,739
26,902
34,534
Net interest revenue
172,789
176,936
175,931
170,570
167,530
Provision for credit losses
-
5,000
15,000
20,000
46,000
Net interest revenue, after provision for
credit losses
172,789
171,936
160,931
150,570
121,530
NONINTEREST REVENUE:
Mortgage banking
25,310
20,129
27,097
29,557
9,470
Credit card, debit card and merchant fees
9,659
10,053
9,938
9,080
9,176
Deposit service charges
8,477
9,708
8,892
7,647
11,682
Security gains(losses), net
82
63
18
62
(85)
Insurance commissions
30,667
29,815
32,750
33,118
29,603
Wealth management
8,465
6,751
6,471
6,421
6,570
Other
5,276
2,307
4,758
5,373
10,080
Total noninterest revenue
87,936
78,826
89,924
91,258
76,496
NONINTEREST EXPENSE:
Salaries and employee benefits
101,060
97,215
104,219
108,103
108,272
Occupancy, net of rental income
12,814
13,004
13,053
12,890
12,708
Equipment
4,564
4,756
4,519
4,762
4,649
Deposit insurance assessments
1,455
1,696
1,522
1,962
1,546
Pension settlement expense
-
5,846
-
-
-
Other
35,930
45,394
32,192
34,787
40,831
Total noninterest expense
155,823
167,911
155,505
162,504
168,006
Income before income taxes
104,902
82,851
95,350
79,324
30,020
Income tax expense
23,347
14,046
21,525
18,164
5,759
Net income
$ 81,555
$ 68,805
$ 73,825
$ 61,160
$ 24,261
Less: Preferred dividends
2,372
2,372
2,372
2,372
2,372
Net income available to common shareholders
$ 79,183
$ 66,433
$ 71,453
$ 58,788
$ 21,889
Net income per common share: Basic
$ 0.77
$ 0.65
$ 0.70
$ 0.57
$ 0.21
Diluted
$ 0.77
$ 0.65
$ 0.69
$ 0.57
$ 0.21
BancorpSouth Bank
Selected Loan Data
(Dollars in thousands)
(Unaudited)
Quarter Ended
Mar-21
Dec-20
Sep-20
Jun-20
Mar-20
LOAN AND LEASE PORTFOLIO:
Commercial and industrial
Commercial and industrial-non real estate
2,865,706
2,673,429
2,937,608
3,038,957
2,008,043
Commercial and industrial-owner occupied
2,260,456
2,281,127
2,297,008
2,296,287
2,290,585
Total commercial and industrial
5,126,162
4,954,556
5,234,616
5,335,244
4,298,628
Commercial real estate
Agricultural
337,710
317,994
333,839
333,615
339,539
Construction, acquisition and development
1,707,800
1,728,682
1,700,030
1,658,678
1,582,039
Commercial real estate
3,127,510
3,211,434
3,229,959
3,323,744
3,303,537
Total commercial real estate
5,173,020
5,258,110
5,263,828
5,316,037
5,225,115
Consumer
Consumer mortgages
3,700,076
3,726,241
3,704,490
3,646,168
3,572,277
Home equity
608,924
630,097
658,708
655,543
686,202
Credit cards
81,499
89,077
85,760
86,592
93,896
Total consumer
4,390,499
4,445,415
4,448,958
4,388,303
4,352,375
All other
349,127
364,398
380,333
387,837
348,527
Total loans
$ 15,038,808
$ 15,022,479
$ 15,327,735
$ 15,427,421
$ 14,224,645
ALLOWANCE FOR CREDIT LOSSES:
Balance, beginning of period
$ 244,422
$ 250,624
$ 237,025
$ 218,199
$ 119,066
Impact of adopting ASC 326 - cumulative effect adjustment
-
-
-
-
40,000
Impact of adopting ASC 326 - purchased loans with credt
deterioration
-
-
-
-
22,634
Loans and leases charged-off:
Commercial and industrial
Commercial and industrial-non real estate
(2,269)
(4,343)
(560)
(1,506)
(10,792)
Commercial and industrial-owner occupied
(677)
(1,168)
(441)
(13)
(184)
Total commercial and industrial
(2,946)
(5,511)
(1,001)
(1,519)
(10,976)
Commercial real estate
Agricultural
(98)
(155)
-
(21)
(65)
Construction, acquisition and development
(807)
(1,773)
-
(9)
(3,173)
Commercial real estate
(478)
(3,134)
(738)
-
(67)
Total commercial real estate
(1,383)
(5,062)
(738)
(30)
(3,305)
Consumer
Consumer mortgages
(293)
(731)
(81)
(124)
(524)
Home equity
(50)
(395)
(41)
(162)
(236)
Credit cards
(733)
(458)
(682)
(703)
(798)
Total consumer
(1,076)
(1,584)
(804)
(989)
(1,558)
All other
(501)
(875)
(599)
(396)
(914)
Total loans charged-off
(5,906)
(13,032)
(3,142)
(2,934)
(16,753)
Recoveries:
Commercial and industrial
Commercial and industrial-non real estate
1,031
779
294
277
355
Commercial and industrial-owner occupied
62
37
163
136
1,179
Total commercial and industrial
1,093
816
457
413
1,534
Commercial real estate
Agricultural
86
24
3
6
6
Construction, acquisition and development
53
73
55
172
245
Commercial real estate
56
45
209
50
135
Total commercial real estate
195
142
267
228
386
Consumer
Consumer mortgages
403
230
352
345
397
Home equity
220
151
132
259
80
Credit cards
297
211
270
195
285
Total consumer
920
592
754
799
762
All other
393
280
263
320
344
Total recoveries
2,601
1,830
1,741
1,760
3,026
Net (charge-offs)recoveries
(3,305)
(11,202)
(1,401)
(1,174)
(13,727)
Initial allowance on loans purchased with credit deterioration
-
-
-
-
4,226
Provision:
Initial provision for loans acquired during the quarter
-
-
-
-
1,000
Provision for credit losses related to loans and leases
-
5,000
15,000
20,000
45,000
Total provision
-
5,000
15,000
20,000
46,000
Balance, end of period
$ 241,117
$ 244,422
$ 250,624
$ 237,025
$ 218,199
Average loans for period
$ 15,029,076
$ 15,219,402
$ 15,369,684
$ 15,114,732
$ 14,226,788
Ratio:
Net charge-offs(recoveries) to average loans (annualized)
0.09%
0.29%
0.04%
0.03%
0.39%
BancorpSouth Bank
Selected Loan Data
(Dollars in thousands)
(Unaudited)
Quarter Ended
Mar-21
Dec-20
Sep-20
Jun-20
Mar-20
BXS ORIGINATED LOANS AND LEASES:
Loans and leases charged off:
Commercial and industrial
Commercial and industrial-non real estate
$ (1,971)
$ (1,991)
$ (490)
$ (420)
$ (230)
Commercial and industrial-owner occupied
(187)
(303)
(434)
(13)
(19)
Total commercial and industrial
(2,158)
(2,294)
(924)
(433)
(249)
Commercial real estate
Agricultural
(94)
(124)
-
-
(65)
Construction, acquisition and development
(344)
(1,709)
-
-
(121)
Commercial real estate
(27)
(1,704)
(155)
-
(67)
Total real estate
(465)
(3,537)
(155)
-
(253)
Consumer
Consumer mortgages
(181)
(537)
(70)
(113)
(357)
Home equity
(50)
(395)
(41)
(162)
(236)
Credit cards
(733)
(458)
(682)
(703)
(798)
Total consumer
(964)
(1,390)
(793)
(978)
(1,391)
All other
(399)
(698)
(459)
(288)
(704)
Total loans charged off
(3,986)
(7,919)
(2,331)
(1,699)
(2,597)
Recoveries:
Commercial and industrial
Commercial and industrial-non real estate
387
645
231
210
325
Commercial and industrial-owner occupied
61
27
163
136
1,177
Total commercial and industrial
448
672
394
346
1,502
Commercial real estate
Agricultural
5
23
3
5
4
Construction, acquisition and development
51
73
55
170
244
Commercial real estate
36
45
208
50
135
Total real estate
92
141
266
225
383
Consumer
Consumer mortgages
392
221
350
343
395
Home equity
219
149
130
258
79
Credit cards
297
211
270
195
285
Total consumer
908
581
750
796
759
All other
325
249
235
275
316
Total recoveries
1,773
1,643
1,645
1,642
2,960
Net (charge-offs)/recoveries
$ (2,213)
$ (6,276)
$ (686)
$ (57)
$ 363
BancorpSouth Bank
Selected Loan Data
(Dollars in thousands)
(Unaudited)
Quarter Ended
Mar-21
Dec-20
Sep-20
Jun-20
Mar-20
ACQUIRED LOANS AND LEASES:
Loans and leases charged off:
Commercial and industrial
Commercial and industrial-non real estate
$ (298)
$ (2,352)
$ (70)
$ (1,086)
$ (10,562)
Commercial and industrial-owner occupied
(490)
(865)
(7)
-
(165)
Total commercial and industrial
(788)
(3,217)
(77)
(1,086)
(10,727)
Commercial real estate
Agricultural
(4)
(31)
-
(21)
-
Construction, acquisition and development
(463)
(64)
-
(9)
(3,052)
Commercial real estate
(451)
(1,430)
(583)
-
-
Total real estate
(918)
(1,525)
(583)
(30)
(3,052)
Consumer
Consumer mortgages
(112)
(194)
(11)
(11)
(167)
Home equity
-
-
-
-
-
Credit cards
-
-
-
-
-
Total consumer
(112)
(194)
(11)
(11)
(167)
All other
(102)
(177)
(140)
(108)
(210)
Total loans charged off
(1,920)
(5,113)
(811)
(1,235)
(14,156)
Recoveries:
Commercial and industrial
Commercial and industrial-non real estate
644
134
63
67
30
Commercial and industrial-owner occupied
1
10
-
-
2
Total commercial and industrial
645
144
63
67
32
Commercial real estate
Agricultural
81
1
-
1
2
Construction, acquisition and development
2
-
-
2
1
Commercial real estate
20
-
1
-
-
Total real estate
103
1
1
3
3
Consumer
Consumer mortgages
11
9
2
2
2
Home equity
1
2
2
1
1
Credit cards
-
-
-
-
-
Total consumer
12
11
4
3
3
All other
68
31
28
45
28
Total recoveries
828
187
96
118
66
Net (charge-offs)/recoveries
$ (1,092)
$ (4,926)
$ (715)
$ (1,117)
$ (14,090)
BancorpSouth Bank
Selected Loan Data
(Dollars in thousands)
(Unaudited)
Quarter Ended
Mar-21
Dec-20
Sep-20
Jun-20
Mar-20
NON-PERFORMING ASSETS
NON-PERFORMING LOANS AND LEASES:
Nonaccrual Loans and Leases
Commercial and industrial
Commercial and industrial-non real estate
$ 9,703
$ 12,768
$ 17,936
$ 16,124
$ 16,589
Commercial and industrial-owner occupied
15,019
15,783
18,343
16,745
11,212
Total commercial and industrial
24,722
28,551
36,279
32,869
27,801
Commercial real estate
Agricultural
2,293
5,013
5,907
5,244
5,454
Construction, acquisition and development
8,494
9,738
10,434
9,715
13,899
Commercial real estate
12,838
16,249
32,554
45,047
29,697
Total commercial real estate
23,625
31,000
48,895
60,006
49,050
Consumer
Consumer mortgages
23,535
32,951
32,872
30,672
29,834
Home equity
847
2,657
3,325
2,584
2,597
Credit cards
131
173
144
90
122
Total consumer
24,513
35,781
36,341
33,346
32,553
All other
282
1,046
593
532
670
Total nonaccrual loans and leases
$ 73,142
$ 96,378
$ 122,108
$ 126,753
$ 110,074
Loans and Leases 90+ Days Past Due, Still Accruing:
21,208
14,320
17,641
9,877
7,272
Restructured Loans and Leases, Still Accruing
6,971
10,475
11,154
11,575
11,284
Total non-performing loans and leases
$ 101,321
$ 121,173
$ 150,903
$ 148,205
$ 128,630
OTHER REAL ESTATE OWNED:
9,351
11,395
6,397
7,164
9,200
Total Non-performing Assets
$ 110,672
$ 132,568
$ 157,300
$ 155,369
$ 137,830
BXS originated assets
$ 85,266
$ 97,025
$ 109,418
$ 94,155
$ 85,908
Acquired assets
25,406
35,543
47,882
61,214
51,922
Total Non-performing Assets
$ 110,672
$ 132,568
$ 157,300
$ 155,369
$ 137,830
Additions to Nonaccrual Loans and Leases During the Quarter
$ 10,029
$ 11,087
$ 19,973
$ 36,619
$ 47,523
Loans and Leases 30-89 Days Past Due, Still Accruing:
BXS originated loans
$ 34,929
$ 40,424
$ 42,978
$ 35,002
$ 54,315
Acquired loans
2,798
6,048
5,694
10,450
14,405
Total Loans and Leases 30-89 days past due, still accruing
$ 37,727
$ 46,472
$ 48,672
$ 45,452
$ 68,720
BancorpSouth Bank
Selected Loan Data
(Dollars in thousands)
(Unaudited)
March 31, 2021
Purchased
Special
Credit
Pass
Mention
Substandard
Doubtful
Loss
Impaired
Deteriorated (Loss)
Total
LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE:
Commercial and industrial
Commercial and industrial-non real estate
$ 2,825,297
$ -
$ 30,526
$ 171
$ -
$ 1,909
$ 7,803
$ 2,865,706
Commercial and industrial-owner occupied
2,184,516
3,471
58,754
-
-
11,086
2,629
2,260,456
Total commercial and industrial
5,009,813
3,471
89,280
171
-
12,995
10,432
5,126,162
Commercial real estate
Agricultural
331,802
-
2,877
-
-
705
2,326
337,710
Construction, acquisition and development
1,659,787
1,534
38,665
-
-
2,448
5,366
1,707,800
Commercial real estate
2,987,075
-
127,147
-
-
9,642
3,646
3,127,510
Total commercial real estate
4,978,664
1,534
168,689
-
-
12,795
11,338
5,173,020
Consumer
Consumer mortgages
3,629,182
-
67,881
-
-
2,825
188
3,700,076
Home equity
603,768
-
5,156
-
-
-
-
608,924
Credit cards
81,499
-
-
-
-
-
-
81,499
Total consumer
4,314,449
-
73,037
-
-
2,825
188
4,390,499
All other
343,656
-
5,404
-
-
-
67
349,127
Total loans
$ 14,646,582
$ 5,005
$ 336,410
$ 171
$ -
$ 28,615
$ 22,025
$ 15,038,808
BXS originated loans
$ 13,635,053
$ 5,005
$ 252,140
$ 171
$ -
$ 18,188
$ -
$ 13,910,557
Acquired loans*
1,011,529
-
84,270
-
-
10,427
22,025
1,128,251
Total Loans
$ 14,646,582
$ 5,005
$ 336,410
$ 171
$ -
$ 28,615
$ 22,025
$ 15,038,808
December 31, 2020
Purchased
Special
Credit
Pass
Mention
Substandard
Doubtful
Loss
Impaired
Deteriorated (Loss)
Total
LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE:
Commercial and industrial
Commercial and industrial-non real estate
$ 2,616,471
$ 7,202
$ 39,040
$ 172
$ -
$ 1,949
$ 8,595
$ 2,673,429
Commercial and industrial-owner occupied
2,208,214
-
58,683
-
-
11,579
2,651
2,281,127
Total commercial and industrial
4,824,685
7,202
97,723
172
-
13,528
11,246
4,954,556
Commercial real estate
Agricultural
310,766
-
4,526
-
-
777
1,925
317,994
Construction, acquisition and development
1,686,907
1,534
32,363
-
-
2,054
5,824
1,728,682
Commercial real estate
3,062,894
-
134,054
-
-
10,780
3,706
3,211,434
Total commercial real estate
5,060,567
1,534
170,943
-
-
13,611
11,455
5,258,110
Consumer
Consumer mortgages
3,645,357
-
78,287
-
-
2,406
191
3,726,241
Home equity
624,581
-
5,516
-
-
-
-
630,097
Credit cards
89,077
-
-
-
-
-
-
89,077
Total consumer
4,359,015
-
83,803
-
-
2,406
191
4,445,415
All other
357,812
-
6,519
-
-
-
67
364,398
Total loans
$ 14,602,079
$ 8,736
$ 358,988
$ 172
$ -
$ 29,545
$ 22,959
$ 15,022,479
BXS originated loans
$ 13,459,529
$ 8,736
$ 259,682
$ 172
$ -
$ 17,520
$ -
$ 13,745,639
Acquired loans*
1,142,550
-
99,306
-
-
12,025
22,959
1,276,840
Total Loans
$ 14,602,079
$ 8,736
$ 358,988
$ 172
$ -
$ 29,545
$ 22,959
$ 15,022,479
*Includes certain loans that are no longer included in the "Net book value of acquired loans" on page 10 as a result of maturity, refinance, or other triggering event.
BancorpSouth Bank
Selected Loan Data
(Dollars in thousands)
(Unaudited)
Quarter Ended
Mar-21
Dec-20
Sep-20
Jun-20
Mar-20
LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE:
Pass
$ 14,646,582
$ 14,602,079
$ 14,877,943
$ 14,985,673
$ 13,821,602
Special Mention
5,005
8,736
-
4,264
7,129
Substandard
336,410
358,988
372,483
350,264
323,697
Doubtful
171
172
178
179
191
Loss
-
-
-
-
667
Impaired
28,615
29,545
49,818
57,406
40,627
Purchased Credit Deteriorated (Loss)
22,025
22,959
27,313
29,635
30,732
Total
$ 15,038,808
$ 15,022,479
$ 15,327,735
$ 15,427,421
$ 14,224,645
BXS ORIGINATED LOAN PORTFOLIO BY INTERNALLY
ASSIGNED GRADE:
Pass
$ 13,635,053
$ 13,459,529
$ 13,592,460
$ 13,516,292
$ 12,150,616
Special Mention
5,005
8,736
-
2,741
2,045
Substandard
252,140
259,682
252,875
231,687
225,506
Doubtful
171
172
178
179
191
Loss
-
-
-
-
-
Impaired
18,188
17,520
30,909
28,288
22,356
Purchased Credit Deteriorated (Loss)
-
-
-
-
-
Total
$ 13,910,557
$ 13,745,639
$ 13,876,422
$ 13,779,187
$ 12,400,714
ACQUIRED LOAN PORTFOLIO BY INTERNALLY
ASSIGNED GRADE:
Pass
$ 1,011,529
$ 1,142,550
$ 1,285,483
$ 1,469,381
$ 1,670,986
Special Mention
-
-
-
1,523
5,084
Substandard
84,270
99,306
119,608
118,577
98,191
Doubtful
-
-
-
-
-
Loss
-
-
-
-
667
Impaired
10,427
12,025
18,909
29,118
18,271
Purchased Credit Deteriorated (Loss)
22,025
22,959
27,313
29,635
30,732
Total
$ 1,128,251
$ 1,276,840
$ 1,451,313
$ 1,648,234
$ 1,823,931
BancorpSouth Bank
Geographical Information
(Dollars in thousands)
(Unaudited)
March 31, 2021
Alabama
and Florida
Panhandle
Arkansas
Louisiana
Mississippi
Missouri
Tennessee
Texas
Other
Total
LOAN AND LEASE PORTFOLIO:
Commercial and industrial
Commercial and industrial-non real estate
$ 254,421
$ 205,840
$ 331,255
$ 674,111
$ 87,701
$ 175,804
$ 1,132,825
$ 3,749
$ 2,865,706
Commercial and industrial-owner occupied
265,198
180,900
229,123
592,555
64,563
123,882
787,661
16,574
2,260,456
Total commercial and industrial
519,619
386,740
560,378
1,266,666
152,264
299,686
1,920,486
20,323
5,126,162
Commercial real estate
Agricultural
26,692
69,704
22,287
69,210
7,834
11,234
130,343
406
337,710
Construction, acquisition and development
202,159
52,596
74,407
346,196
12,741
83,245
936,258
198
1,707,800
Commercial real estate
316,143
320,806
243,605
645,649
204,343
218,316
1,177,921
727
3,127,510
Total commercial real estate
544,994
443,106
340,299
1,061,055
224,918
312,795
2,244,522
1,331
5,173,020
Consumer
Consumer mortgages
594,984
319,060
326,864
811,487
110,284
327,596
1,157,824
51,977
3,700,076
Home equity
92,721
44,282
73,245
209,906
16,218
130,875
41,573
104
608,924
Credit cards
-
-
-
-
-
-
-
81,499
81,499
Total consumer
687,705
363,342
400,109
1,021,393
126,502
458,471
1,199,397
133,580
4,390,499
All other
48,036
36,285
46,268
117,094
2,030
22,245
73,793
3,376
349,127
Total loans
$ 1,800,354
$ 1,229,473
$ 1,347,054
$ 3,466,208
$ 505,714
$ 1,093,197
$ 5,438,198
$ 158,610
$ 15,038,808
Loan growth, excluding loans acquired during
the quarter (annualized)
3.07%
(10.00% )
(4.59% )
(6.36% )
(13.63% )
3.29%
9.32%
(21.40% )
0.44%
Loan growth, excluding PPP loans (annualized)
(0.62% )
(13.30% )
(13.71% )
(9.37% )
(16.50% )
(1.02% )
4.46%
(41.87% )
(4.16% )
NON-PERFORMING LOANS AND LEASES:
Commercial and industrial
Commercial and industrial-non real estate
$ 188
$ 776
$ 1,176
$ 841
$ 1,162
$ 422
$ 5,546
$ 156
$ 10,267
Commercial and industrial-owner occupied
607
1,225
373
1,512
166
-
13,351
-
17,234
Total commercial and industrial
795
2,001
1,549
2,353
1,328
422
18,897
156
27,501
Commercial real estate
Agricultural
63
337
-
965
-
-
1,522
-
2,887
Construction, acquisition and development
-
131
1,149
83
-
189
10,838
-
12,390
Commercial real estate
2,027
243
1,766
896
-
-
8,584
-
13,516
Total commercial real estate
2,090
711
2,915
1,944
-
189
20,944
-
28,793
Consumer
Consumer mortgages
11,093
2,942
2,975
11,157
1,120
2,597
8,481
2,027
42,392
Home equity
163
52
298
388
87
131
294
-
1,413
Credit cards
-
-
-
-
-
-
-
832
832
Total consumer
11,256
2,994
3,273
11,545
1,207
2,728
8,775
2,859
44,637
All other
43
1
45
42
-
3
234
22
390
Total loans
$ 14,184
$ 5,707
$ 7,782
$ 15,884
$ 2,535
$ 3,342
$ 48,850
$ 3,037
$ 101,321
NON-PERFORMING LOANS AND LEASES
AS A PERCENTAGE OF OUTSTANDING:
Commercial and industrial
Commercial and industrial-non real estate
0.07%
0.38%
0.36%
0.12%
1.32%
0.24%
0.49%
4.16%
0.36%
Commercial and industrial-owner occupied
0.23%
0.68%
0.16%
0.26%
0.26%
0.00%
1.70%
0.00%
0.76%
Total commercial and industrial
0.15%
0.52%
0.28%
0.19%
0.87%
0.14%
0.98%
0.77%
0.54%
Commercial real estate
Agricultural
0.24%
0.48%
0.00%
1.39%
0.00%
0.00%
1.17%
0.00%
0.85%
Construction, acquisition and development
0.00%
0.25%
1.54%
0.02%
0.00%
0.23%
1.16%
0.00%
0.73%
Commercial real estate
0.64%
0.08%
0.72%
0.14%
0.00%
0.00%
0.73%
0.00%
0.43%
Total commercial real estate
0.38%
0.16%
0.86%
0.18%
0.00%
0.06%
0.93%
0.00%
0.56%
Consumer
Consumer mortgages
1.86%
0.92%
0.91%
1.37%
1.02%
0.79%
0.73%
3.90%
1.15%
Home equity
0.18%
0.12%
0.41%
0.18%
0.54%
0.10%
0.71%
0.00%
0.23%
Credit cards
N/A
N/A
N/A
N/A
N/A
N/A
N/A
1.02%
1.02%
Total consumer
1.64%
0.82%
0.82%
1.13%
0.95%
0.60%
0.73%
2.14%
1.02%
All other
0.09%
0.00%
0.10%
0.04%
0.00%
0.01%
0.32%
0.65%
0.11%
Total loans
0.79%
0.46%
0.58%
0.46%
0.50%
0.31%
0.90%
1.91%
0.67%
BancorpSouth Bank
Noninterest Revenue and Expense
(Dollars in thousands)
(Unaudited)
Quarter Ended
Mar-21
Dec-20
Sep-20
Jun-20
Mar-20
NONINTEREST REVENUE:
Mortgage banking excl. MSR and MSR Hedge market value adj
$ 17,929
$ 19,917
$ 26,667
$ 31,930
$ 20,553
MSR and MSR Hedge market value adjustment
7,381
212
430
(2,373)
(11,083)
Credit card, debit card and merchant fees
9,659
10,053
9,938
9,080
9,176
Deposit service charges
8,477
9,708
8,892
7,647
11,682
Securities gains (losses), net
82
63
18
62
(85)
Insurance commissions
30,667
29,815
32,750
33,118
29,603
Trust income
5,129
4,046
3,902
4,064
4,013
Annuity fees
51
53
53
54
55
Brokerage commissions and fees
3,285
2,652
2,516
2,303
2,502
Bank-owned life insurance
2,020
2,425
1,902
1,855
1,999
Other miscellaneous income
3,256
(118)
2,856
3,518
8,081
Total noninterest revenue
$ 87,936
$ 78,826
$ 89,924
$ 91,258
$ 76,496
NONINTEREST EXPENSE:
Salaries and employee benefits
$ 101,060
$ 97,215
$ 104,219
$ 108,103
$ 108,272
Occupancy, net of rental income
12,814
13,004
13,053
12,890
12,708
Equipment
4,564
4,756
4,519
4,762
4,649
Deposit insurance assessments
1,455
1,696
1,522
1,962
1,546
Pension settlement expense
-
5,846
-
-
-
Advertising
1,004
899
826
918
1,099
Foreclosed property expense
1,021
2,122
(278)
1,306
924
Telecommunications
1,398
1,448
1,462
1,512
1,461
Public relations
741
897
1,130
459
680
Data processing
10,424
9,980
9,477
9,693
9,646
Computer software
5,113
5,301
4,779
4,979
4,315
Amortization of intangibles
2,318
2,499
2,357
2,355
2,394
Legal
1,166
1,474
(316)
1,375
898
Merger expense
1,649
212
129
510
4,494
Postage and shipping
1,547
1,418
1,199
1,198
1,441
Other miscellaneous expense
9,549
19,144
11,427
10,482
13,479
Total noninterest expense
$ 155,823
$ 167,911
$ 155,505
$ 162,504
$ 168,006
INSURANCE COMMISSIONS:
Property and casualty commissions
$ 21,949
$ 21,304
$ 24,060
$ 23,644
$ 21,246
Life and health commissions
6,494
5,915
6,072
6,771
6,175
Risk management income
613
829
609
540
532
Other
1,611
1,767
2,009
2,163
1,650
Total insurance commissions
$ 30,667
$ 29,815
$ 32,750
$ 33,118
$ 29,603
BancorpSouth Bank
Selected Additional Information
(Dollars in thousands)
(Unaudited)
Quarter Ended
Mar-21
Dec-20
Sep-20
Jun-20
Mar-20
MORTGAGE SERVICING RIGHTS:
Fair value, beginning of period
$ 47,571
$ 44,944
$ 40,821
$ 42,243
$ 57,109
Additions to mortgage servicing rights:
Originations of servicing assets
5,588
6,608
7,041
4,297
3,079
Changes in fair value:
Due to payoffs/paydowns
(3,273)
(3,898)
(3,198)
(3,144)
(2,506)
Due to change in valuation inputs or
assumptions used in the valuation model
10,446
(83)
280
(2,575)
(15,438)
Other changes in fair value
-
-
-
-
(1)
Fair value, end of period
$ 60,332
$ 47,571
$ 44,944
$ 40,821
$ 42,243
MORTGAGE BANKING REVENUE:
Production revenue:
Origination
$ 15,955
$ 18,561
$ 23,632
$ 30,194
$ 17,906
Servicing
5,247
5,254
6,233
4,880
5,153
Payoffs/Paydowns
(3,273)
(3,898)
(3,198)
(3,144)
(2,506)
Total production revenue
17,929
19,917
26,667
31,930
20,553
Market value adjustment on MSR
10,446
(83)
280
(2,575)
(15,438)
Market value adjustment on MSR Hedge
(3,065)
295
150
202
4,355
Total mortgage banking revenue
$ 25,310
$ 20,129
$ 27,097
$ 29,557
$ 9,470
Mortgage loans serviced
$ 7,259,808
$ 7,330,293
$ 7,218,090
$ 7,000,425
$ 6,999,383
MSR/mtg loans serviced
0.83%
0.65%
0.62%
0.58%
0.60%
AVAILABLE-FOR-SALE SECURITIES, at fair value
U.S. Government agencies
2,642,646
2,871,408
$ 3,116,458
$ 3,348,206
$ 3,532,905
U.S. Government agency issued residential
mortgage-back securities
3,438,246
2,421,409
1,625,325
699,864
132,902
U.S. Government agency issued commercial
mortgage-back securities
1,414,345
806,206
758,116
759,980
595,885
Obligations of states and political subdivisions
126,589
113,953
141,896
163,121
206,648
Corporate bonds
18,442
18,030
17,990
2,000
-
Total available-for-sale securities
$ 7,640,268
$ 6,231,006
$ 5,659,785
$ 4,973,171
$ 4,468,340
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 available to common shareholders, net operating income-excluding MSR, net operating income available to common shareholders-excluding MSR, pre-tax pre-provision net revenue, total operating expense, tangible shareholders' equity to tangible assets, tangible shareholders' equity to tangible assets-excluding PPP loans, tangible common shareholders' equity to tangible assets, tangible common shareholders' equity to tangible assets-excluding PPP loans, return on average tangible equity, return on average tangible common equity, operating return on average tangible equity-excluding MSR, operating return on average tangible common equity-excluding MSR, operating return on average assets-excluding MSR, operating return on average shareholders' equity-excluding MSR, operating return on average common shareholders' equity-excluding MSR, pre-tax pre-provision net revenue to total average assets, average tangible book value per common share, operating earnings per common share, operating earnings per common 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, Net Operating Income Available to Common Shareholders, Net Operating Income-Excluding MSR, and Net Operating Income Available to Common Shareholders-excluding MSR to Net Income:
Quarter ended
3/31/2021
12/31/2020
9/30/2020
6/30/2020
3/31/2020
Net income
$ 81,555
$ 68,805
$ 73,825
$ 61,160
$ 24,261
Plus:
Merger expense, net of tax
1,238
159
97
383
3,372
Initial provision for acquired loans,
net of tax
-
-
-
-
751
Pension settlement expense, net of tax
-
4,388
-
-
-
Less:
Security gains(losses), net of tax
62
48
13
47
(64)
Net operating income
$ 82,731
$ 73,304
$ 73,909
$ 61,496
$ 28,448
Less:
Preferred dividends
2,372
2,372
2,372
2,372
2,372
Net operating income available to
common shareholders
$ 80,359
$ 70,932
$ 71,537
$ 59,124
$ 26,076
Net operating income
$ 82,731
$ 73,304
$ 73,909
$ 61,496
$ 28,448
Less:
MSR market value adjustment, net of tax
5,539
159
323
(1,781)
(8,318)
Net operating income-excluding MSR
$ 77,192
$ 73,145
$ 73,586
$ 63,277
$ 36,766
Less:
Preferred dividends
2,372
2,372
2,372
2,372
2,372
Net operating income available to common
shareholders-excluding MSR
$ 74,820
$ 70,773
$ 71,214
$ 60,905
$ 34,394
Reconciliation of Net Income to Pre-Tax Pre-Provision Net Revenue
Net income
$ 81,555
$ 68,805
$ 73,825
$ 61,160
$ 24,261
Plus:
Provision for credit losses
-
5,000
15,000
20,000
46,000
Merger expense
1,649
212
129
510
4,494
Pension settlement expense
-
5,846
-
-
-
Income tax expense
23,347
14,046
21,525
18,164
5,759
Less:
Security gains(losses)
82
63
18
62
(85)
MSR market value adjustment
7,381
212
430
(2,373)
(11,083)
Pre-tax pre-provision net revenue
$ 99,088
$ 93,634
$ 110,031
$ 102,145
$ 91,682
Reconciliation of Total Operating Expense to Total Noninterest Expense:
Total noninterest expense
$ 155,823
$ 167,911
$ 155,505
$ 162,504
$ 168,006
Less:
Merger expense
1,649
212
129
510
4,494
Pension settlement expense
-
5,846
-
-
-
Total operating expense
$ 154,174
$ 161,853
$ 155,376
$ 161,994
$ 163,512
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
3/31/2021
12/31/2020
9/30/2020
6/30/2020
3/31/2020
Tangible assets
Total assets
$ 25,802,497
$ 24,081,194
$ 23,555,422
$ 23,236,176
$ 21,032,524
Less:
Goodwill
851,612
851,612
847,531
847,984
848,242
Other identifiable intangible assets
53,581
55,899
54,757
56,989
59,345
Total tangible assets
$ 24,897,304
$ 23,173,683
$ 22,653,134
$ 22,331,203
$ 20,124,937
Less:
PPP loans
1,146,000
975,421
1,212,246
1,192,715
-
Total tangible assets-excluding PPP loans
$ 23,751,304
$ 22,198,262
$ 21,440,888
$ 21,138,488
$ 20,124,937
PERIOD END BALANCES:
Tangible shareholders' equity
Total shareholders' equity
$ 2,825,198
$ 2,822,477
$ 2,782,539
$ 2,732,687
$ 2,681,904
Less:
Goodwill
851,612
851,612
847,531
847,984
848,242
Other identifiable intangible assets
53,581
55,899
54,757
56,989
59,345
Total tangible shareholders' equity
$ 1,920,005
$ 1,914,966
$ 1,880,251
$ 1,827,714
$ 1,774,317
Less:
Preferred stock
166,993
166,993
166,993
166,993
166,993
Total tangible common shareholders' equity
$ 1,753,012
$ 1,747,973
$ 1,713,258
$ 1,660,721
$ 1,607,324
AVERAGE BALANCES:
Tangible shareholders' equity
Total shareholders' equity
$ 2,813,001
$ 2,774,589
$ 2,729,870
$ 2,738,434
$ 2,658,699
Less:
Goodwill
851,612
852,472
847,744
848,160
844,635
Other identifiable intangible assets
54,876
54,858
56,045
58,280
58,805
Total tangible shareholders' equity
$ 1,906,513
$ 1,867,259
$ 1,826,081
$ 1,831,994
$ 1,755,259
Less:
Preferred stock
166,993
166,993
166,993
166,993
167,021
Total tangible common shareholders' equity
$ 1,739,520
$ 1,700,266
$ 1,659,088
$ 1,665,001
$ 1,588,238
Total average assets
$ 24,545,560
$ 23,660,503
$ 23,318,877
$ 22,707,686
$ 21,189,637
Total shares of common stock outstanding
102,624,818
102,561,480
102,558,459
102,566,301
102,632,484
Average shares outstanding-diluted
102,711,584
102,817,409
102,839,749
102,827,225
104,733,897
Tangible shareholders' equity to tangible assets (1)
7.71%
8.26%
8.30%
8.18%
8.82%
Tangible shareholders' equity to tangible assets-excluding PPP loans (2)
8.08%
8.63%
8.77%
8.65%
8.82%
Tangible common shareholders' equity to tangible assets (3)
7.04%
7.54%
7.56%
7.44%
7.99%
Tangible common shareholders' equity to tangible assets-excluding PPP loans (4)
7.38%
7.87%
7.99%
7.86%
7.99%
Return on average tangible equity (5)
17.35%
14.66%
16.08%
13.43%
5.56%
Return on average tangible common equity (6)
18.46%
15.54%
17.13%
14.20%
5.54%
Operating return on average tangible equity-excluding MSR (7)
16.42%
15.58%
16.03%
13.89%
8.42%
Operating return on average tangible common equity-excluding MSR (8)
17.44%
16.56%
17.08%
14.71%
8.71%
Operating return on average assets-excluding MSR (9)
1.28%
1.23%
1.26%
1.12%
0.70%
Operating return on average shareholders' equity-excluding MSR (10)
11.13%
10.49%
10.72%
9.29%
5.56%
Operating return on average common shareholders' equity-excluding MSR (11)
11.47%
10.80%
11.05%
9.53%
5.55%
Pre-tax pre-provision net revenue to total average assets (12)
1.64%
1.57%
1.88%
1.81%
1.74%
Tangible book value per common share (13)
$ 17.08
$ 17.04
$ 16.71
$ 16.19
$ 15.66
Operating earnings per common share (14)
$ 0.78
$ 0.69
$ 0.70
$ 0.57
$ 0.25
Operating earnings per common share-excluding MSR (15)
$ 0.73
$ 0.69
$ 0.69
$ 0.59
$ 0.33
(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)
Tangible shareholders' equity to tangible assets-excluding PPP loans 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, other identifiable intangible assets, and PPP loans.
(3)
Tangible common shareholders' equity to tangible assets is defined by the Company as total shareholders' equity less preferred stock, goodwill and other identifiable intangible assets, divided by the difference of total assets less goodwill and other identifiable intangible assets.
(4)
Tangible common shareholders' equity to tangible assets-excluding PPP loans is defined by the Company as total shareholders' equity less preferred stock, goodwill and other identifiable intangible assets, divided by the difference of total assets less goodwill, other identifiable intangible assets, and PPP loans.
(5)
Return on average tangible equity is defined by the Company as annualized net income divided by average tangible shareholders' equity.
(6)
Return on average tangible common equity is defined by the Company as annualized net income available to common shareholders divided by average tangible common shareholders' equity.
(7)
Operating return on average tangible equity-excluding MSR is defined by the Company as annualized net operating income-excluding MSR divided by average tangible shareholders' equity.
(8)
Operating return on average tangible common equity-excluding MSR is defined by the Company as annualized net operating income available to common shareholders-excluding MSR divided by average tangible common shareholders' equity.
(9)
Operating return on average assets-excluding MSR is defined by the Company as annualized net operating income-excluding MSR divided by total average assets.
(10)
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.
(11)
Operating return on average common shareholders' equity-excluding MSR is defined by the Company as annualized net operating income available to common shareholders-excluding MSR divided by average common shareholders' equity.
(12)
Pre-tax pre-provision net revenue to total average assets is defined by the Company as annualized pre-tax pre-provision net revenue divided by total average assets adjusted for other non-operating items included in the definition and calculation of net operating income-excluding MSR.
(13)
Tangible book value per common share is defined by the Company as tangible common shareholders' equity divided by total shares of common stock outstanding.
(14)
Operating earnings per common share is defined by the Company as net operating income available to common shareholders divided by average common shares outstanding-diluted.
(15)
Operating earnings per common share-excluding MSR is defined by the Company as net operating income available to common shareholders-excluding MSR divided by average common 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 Bank