BancorpSouth Announces Fourth Quarter 2020 and Annual Financial Results
01/25/2021 - 04:30 PM
TUPELO, Miss. , Jan. 25, 2021 /PRNewswire/ -- BancorpSouth Bank (NYSE: BXS) (the "Company") today announced financial results for the quarter and year ended December 31, 2020 .
Annual highlights for 2020 included:
Achieved net income available to common shareholders of $218.6 million , or $2.12 per diluted common share, and net operating income available to common shareholders – excluding mortgage servicing rights ("MSR") – of $237.3 million , or $2.30 per diluted common share. Recorded provision for credit losses of $86.0 million associated primarily with economic deterioration associated with the COVID-19 pandemic while net charge-offs totaled 0.18 percent of average loans and leases, 0.14 percent of which was related to previously acquired loans; adopted Accounting Standards Update 2016-13 "Financial Instruments – Credit Losses" ("CECL") effective January 1, 2020 which, combined with the provision, contributed to an increase of $125.4 million in the allowance for credit losses. Reported record annual pre-tax pre-provision net revenue ("PPNR") of $397.5 million , or 1.75 percent of average assets; represents an increase of 20.7 percent from $329.2 million , or 1.73 percent of average assets, for 2019. Generated total organic deposit and customer repo growth of approximately $3.2 billion , or 19 percent for the year. Originated over 15,000 loans totaling $1.2 billion under the Paycheck Protection Program ("PPP"); processed forgiveness applications on approximately 6,900 loans totaling $608.9 million and received forgiveness funds from the U.S. Small Business Administration ("SBA") on just over 4,000 loans totaling $262.5 million . Reported record annual mortgage production volume and mortgage revenue for the year – production volume of $3.2 billion contributed to production and servicing revenue totaling $99.1 million . Improvement in cost structure; operating efficiency ratio – excluding MSR – improved to 61.6 percent compared to 64.9 percent for 2019. Completed merger with Texas First Bancshares, Inc. which added $396.9 million in assets to the Company's Central Texas presence. Repurchased 3,300,000 shares of outstanding common stock at a weighted average price of $26.42 per share. Highlights for the fourth quarter of 2020 included:
Achieved quarterly net income available to common shareholders of $66.4 million , or $0.65 per diluted common share, and net operating income available to common shareholders – excluding MSR – of $70.8 million , or $0.69 per diluted common share. Recorded provision for credit losses of $5.0 million ; total non-performing assets declined 15.7% while past dues, loan deferrals, and modifications remained relatively stable. Generated $93.6 million in PPNR, or 1.57 percent of average assets on an annualized basis; PPNR was impacted by seasonal revenue factors as well as certain other elevated one-time or non-recurring expense items. Generated total deposit and customer repo growth of $459.7 million for the quarter, or 9.1 percent on an annualized basis. Record fourth quarter mortgage production volume of $845.9 million contributed to mortgage production and servicing revenue of $19.9 million . Recorded a charge of $5.8 million in accordance with Accounting Standards Codification ("ASC") 715 "Compensation – Retirement Benefits" to reflect the settlement accounting impact of the lump sum payments associated with an elevated number of retirements that occurred in the fourth quarter of 2020. Maintained strong regulatory capital metrics; estimated total risk-based capital of 14.24 percent at December 31, 2020 compared to 14.17 percent at December 31, 2019 . Announced the signing of a definitive merger agreement with National United Bancshares, Inc., the parent company of National United, which is expected to add approximately $750 million in assets to the Company's Central Texas presence. On January 13, 2021 , announced the signing of a definitive merger agreement with FNS Bancshares, Inc., the parent company of FNB Bank, which is expected to add approximately $790 million in assets across Alabama , Tennessee , and Georgia . "As we look at our financial results for 2020, the COVID-19 pandemic certainly created a challenging year for our industry as a whole," remarked Dan Rollins , Chairman and Chief Executive Officer. "I am extremely proud of our team's ability to navigate this difficult environment while continuing to improve our core operating results. While protecting the health of our teammates and customers was our first priority, we achieved some unprecedented milestones in several areas of our Company. Our mortgage team generated record production of $3.2 billion , which exceeds our previous annual production record of $2.0 billion by 60 percent. As we have previously reported, our bankers and support staff produced over 15,000 PPP loans totaling over $1.2 billion in a very short period of time. We are currently actively working with our customers on the second phase of funding under the PPP. I am also pleased with our lenders and credit administrators' ability to work with our customers on deferrals and modifications while actively managing our credit risk. While we recorded a provision of credit losses of $86 million for the year, our credit quality indicators continue to remain stable. Net charge-offs, excluding acquired loans, totaled 0.04 percent of net loans and leases for the year. Finally, we reported record pre-tax pre-provision net revenue of $397.5 million , or 1.75 percent of average assets. This represents an increase from $329.2 million , or 1.73 percent of average assets for 2019."
"As we look specifically at our fourth quarter performance, we had another great quarter of deposit and customer repo growth, which totaled $459.7 million , or 9.1 percent on an annualized basis. We were also pleased to be able to continue to work our total cost of deposits down meaningfully and hold our net interest margin in a relatively tight range. Our mortgage team had another outstanding quarter generating production volume of $845.9 million and total production and servicing revenue of $19.9 million . While we had several items that created some noise in our results, we are pleased to report operating earnings per share – excluding MSR – of $0.69 per diluted share in a quarter that has historically faced seasonal headwinds in both our mortgage and insurance business. The largest of these items was a $5.8 million pension accounting charge resulting from elevated retirements and lump sum pension payouts in the fourth quarter. While this charge adversely impacted earnings, the decline of employee FTE of approximately 100 over the course of 2020 reflects our continued focus on improving our operating efficiency. Finally, we are excited about the growth opportunities that we have recently announced with National United in Gatesville, Texas and FNB Bank in Scottsboro, Alabama , which will collectively add approximately $1.5 billion in assets to our Company. We are hopeful that we can receive the required approvals in order to close these transactions during the second quarter of this year."
Earnings Summary
The Company reported net income available to common shareholders of $66.4 million , or $0.65 per diluted common share, for the fourth quarter of 2020, compared with net income available to common shareholders of $65.8 million , or $0.63 per diluted common share, for the fourth quarter of 2019 and net income available to common shareholders of $71.5 million , or $0.69 per diluted common share, for the third quarter of 2020. The Company reported net operating income available to common shareholders – excluding MSR – of $70.8 million , or $0.69 per diluted common share, for the fourth quarter of 2020, compared with $67.8 million , or $0.65 per diluted common share, for the fourth quarter of 2019 and $71.2 million , or $0.69 per diluted common share, for the third quarter of 2020.
Additionally, the Company reported net income available to common shareholders of $218.6 million , or $2.12 per diluted common share, for the year ended December 31, 2020 compared with $234.3 million , or $2.30 per diluted common share, for the year ended December 31 , 2019. The Company reported net operating income available to common shareholders – excluding MSR – of $237.3 million , or $2.30 per diluted common share, for the year ended December 31, 2020 compared with $255.4 million , or $2.51 per diluted common share, for the year ended December 31 , 2019.
The Company reported pre-tax pre-provision net revenue of $93.6 million , or 1.57 percent of average assets on an annualized basis, for the fourth quarter of 2020 compared to $85.8 million , or 1.68 percent of average assets on an annualized basis, for the fourth quarter of 2019 and $110.0 million , or 1.88 percent of average assets, for the third quarter of 2020. Additionally, the Company reported pre-tax pre-provision net revenue of $397.5 million , or 1.75 percent of average assets, for the year ended December 31, 2020 compared with $329.2 million , or 1.73 percent of average assets, for the year ended December 31, 2019 .
Net Interest Revenue
Net interest revenue was $176.9 million for the fourth quarter of 2020, an increase of 3.6 percent from $170.8 million for the fourth quarter of 2019 and an increase of 0.6 percent from $175.9 million for the third quarter of 2020. The fully taxable equivalent net interest margin was 3.29 percent for the fourth quarter of 2020, compared with 3.76 percent for the fourth quarter of 2019 and 3.31 percent for the third quarter of 2020. Yields on net loans and leases were 4.55 percent for the fourth quarter of 2020, compared with 5.13 percent for the fourth quarter of 2019 and 4.54 percent for the third quarter of 2020, while yields on total interest earning assets were 3.70 percent for the fourth quarter of 2020, compared with 4.48 percent for the fourth quarter of 2019 and 3.77 percent for the third quarter of 2020. The net interest margin, excluding accretable yield, was 3.24 percent for the fourth quarter of 2020, compared with 3.61 percent for the fourth quarter of 2019 and 3.23 percent for the third quarter of 2020, while yields on net loans and leases, excluding accretable yield, were 4.49 percent for the fourth quarter of 2020, compared with 4.95 percent for the fourth quarter of 2019 and 4.44 percent for the third quarter of 2020.
The $975.4 million in PPP loans on the balance sheet had an adverse impact of approximately four basis points on the yield on net loans and leases, excluding accretable yield, for the fourth quarter of 2020. Net interest income for the fourth quarter of 2020 included approximately $2.5 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 0.38 percent for the fourth quarter of 2020, compared with 0.68 percent for the fourth quarter of 2019 and 0.44 percent for the third quarter of 2020.
Balance Sheet Activity
Loans and leases, net of unearned income, decreased $305.3 million during the fourth quarter of 2020 primarily as a result of the SBA forgiveness of $262.5 million of PPP loans during the quarter. Deposits and customer repos increased $459.7 million , or 9.1 percent on an annualized basis, during the fourth quarter of 2020. There were no acquisitions during the fourth quarter of 2020.
Provision for Credit Losses and Allowance for Credit Losses
Earnings for the fourth quarter of 2020 reflect a provision for credit losses of $5.0 million , compared with no provision for the fourth quarter of 2019 and a provision of $15.0 million for the third quarter of 2020. Net charge-offs for the fourth quarter of 2020 were $11.2 million , or 0.29 percent of net loans and leases on an annualized basis, compared with net recoveries of $2.2 million for the fourth quarter of 2019 and net charge-offs of $1.4 million for the third quarter of 2020. Net charge-offs for the fourth quarter of 2020 consisted primarily of the charge down of loans that were previously identified as impaired in prior quarters. The allowance for credit losses was $244.4 million , or 1.63 percent of net loans and leases, at December 31, 2020 , compared with $119.1 million , or 0.85 percent of net loans and leases, at December 31, 2019 , and $250.6 million , or 1.64 percent of net loans and leases, at September 30, 2020 . The allowance for credit losses coverage, excluding the impact of PPP loans, was 1.74 percent at December 31 , 2020.
The Company adopted CECL effective January 1 , 2020. The increase in the allowance for credit losses resulting from this implementation was $62.6 million . Of this increase, $22.6 million was a result of the reclassification of non-accretable difference on previously purchased credit impaired loans that are now considered purchased credit deteriorated loans, while $40.0 million was the result primarily of the requirement of estimating credits losses over the life of the loan portfolio. The adoption of this standard impacted the comparability of credit quality and coverage metrics to all periods preceding January 1, 2020 .
Total non-performing assets were $132.6 million , or 0.55 percent of total assets, at December 31, 2020 , compared with $118.3 million , or 0.56 percent of total assets, at December 31, 2019 , and $157.3 million , or 0.67 percent of total assets, at September 30 , 2020. Other real estate owned was $11.4 million at December 31, 2020 , compared with $6.7 million at December 31, 2019 and $6.4 million at September 30, 2020 .
Noninterest Revenue
Noninterest revenue was $78.8 million for the fourth quarter of 2020, compared with $74.7 million for the fourth quarter of 2019 and $89.9 million for the third quarter of 2020. These results include a positive MSR valuation adjustment of $0.2 million for the fourth quarter of 2020, compared with a positive MSR valuation adjustment of $3.2 million for the fourth quarter of 2019 and a positive MSR valuation adjustment of $0.4 million for the third 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 $19.9 million for the fourth quarter of 2020, compared with $6.9 million for the fourth quarter of 2019 and $26.7 million for the third quarter of 2020. Mortgage origination volume for the fourth quarter of 2020 was $845.9 million , compared with $504.9 million for the fourth quarter of 2019 and $937.7 million for the third quarter of 2020. Home purchase money volume was $466.4 million for the fourth quarter of 2020, compared with $321.7 million for the fourth quarter of 2019 and $568.4 million for the third quarter of 2020. Of the total mortgage origination volume for the fourth quarter of 2020, $157.8 million was portfolio loans, compared with $106.4 million for the fourth quarter of 2019 and $218.0 million for the third quarter of 2020.
Credit card, debit card, and merchant fee revenue was $10.1 million for the fourth quarter of 2020, compared with $9.8 million for the fourth quarter of 2019 and $9.9 million for the third quarter of 2020. Deposit service charge revenue was $9.7 million for the fourth quarter of 2020, compared with $12.2 million for the fourth quarter of 2019 and $8.9 million for the third quarter of 2020. Wealth management revenue was $6.8 million for the fourth quarter of 2020, compared with $6.6 million for the fourth quarter of 2019 and $6.5 million for the third quarter of 2020. Insurance commission revenue was $29.8 million for the fourth quarter of 2020, compared with $27.6 million for the fourth quarter of 2019 and $32.8 million for the third quarter of 2020. Other noninterest revenue was $2.3 million for the fourth quarter of 2020, compared with $8.3 million for the fourth quarter of 2019 and $4.8 million for the third 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 quarter.
Noninterest Expense
Noninterest expense for the fourth quarter of 2020 was $167.9 million , compared with $162.4 million for the fourth quarter of 2019 and $155.5 million for the third quarter of 2020. Salaries and employee benefits expense was $97.2 million for the fourth quarter of 2020, compared with $97.1 million for the fourth quarter of 2019 and $104.2 million for the third quarter of 2020. Occupancy expense was $13.0 million for the fourth quarter of 2020, compared with $12.3 million for the fourth quarter of 2019 and $13.1 million for the third quarter of 2020. Other noninterest expense was $45.4 million for the fourth quarter of 2020, compared with $46.0 million for the fourth quarter of 2019 and $32.2 million for the third quarter of 2020. Additionally, merger-related expense for the fourth quarter of 2020 was $0.2 million , compared with merger-related expense of $5.8 million for the fourth quarter of 2019 and $0.1 million for the third quarter of 2020.
Noninterest expense for the fourth quarter of 2020 included certain items that were either non-operating or non-routine in nature as defined by the Company. 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 11.72 percent at December 31, 2020 , compared with 12.75 percent at December 31, 2019 and 11.81 percent at September 30 , 2020. The ratio of tangible common shareholders' equity to tangible assets was 7.54 percent at December 31, 2020 , compared with 8.09 percent at December 31, 2019 and 7.56 percent at September 30 , 2020. The $975.4 million in PPP loans had an adverse impact of approximately 33 basis points on tangible common shareholders' equity to tangible assets at December 31, 2020 .
During the fourth quarter of 2020, the Company did not repurchase any shares of its common stock pursuant to its share repurchase program. On December 9, 2020 , the Company announced a new share repurchase program, pursuant to which the Board of Directors has authorized the repurchase of up to an aggregate of 6 million shares, which commenced on January 4, 2021 and will expire on December 31, 2021 .
Estimated regulatory capital ratios at December 31, 2020 were calculated in accordance with the Basel III capital framework as well as the interagency interim final rule published on March 31, 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 December 31, 2020 , with Tier 1 risk-based capital of 11.70 percent and total risk-based capital of 14.24 percent, compared with required minimum levels of 8 percent and 10 percent, respectively, in order to qualify for "well capitalized" classification.
Summary
Rollins concluded, "I am proud of the accomplishments that our teammates achieved over the course of the year in unprecedented circumstances. We reported record deposit growth and mortgage origination volume, while our bankers cultivated current relationships and built new ones through the government stimulus programs as well as other opportunities to assist customers during this time. As a company, we have taken other actions to drive continued efficiency improvement including our efforts to improve our branch structure and employee headcount as well as various other initiatives to enhance our technology offerings and customer experience. While we expect the industry to continue to experience revenue headwinds as we enter the New Year, we are glad 2020 is behind us. We look forward to the opportunity to continue to grow our Company and improve shareholder value."
TRANSACTIONS
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 December 31, 2020 , FNS collectively reported total assets of $797.0 million , total loans of $483.5 million and total deposits of $675.5 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 Federal Deposit Insurance Corporation ("FDIC") on January 13 , 2021. The FNS Merger Agreement has been unanimously approved by the Boards of Directors of the Company and FNS. FNS has agreed to convene a meeting of its shareholders to vote upon the approval of the FNS Merger Agreement. Subject to the satisfaction of all closing conditions, including the receipt of all required regulatory approvals, the FNS Merger is expected to be completed during the first half of 2021, although the Company can provide no assurance that the FNS Merger will close during this time period or at all.
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 December 31, 2020 , National United collectively reported total assets of $752.3 million , total loans of $446.0 million and total deposits of $676.7 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. The National United Merger Agreement has been unanimously approved by the Boards of Directors of the Company and National United. National United has agreed to convene a meeting of its shareholders to vote upon the approval of the National United Merger Agreement. Subject to the satisfaction of all closing conditions, including the receipt of all required regulatory approvals, the National United Merger is expected to be completed during the first half of 2021, although the Company can provide no assurance that the National United Merger will close during this time period or at all.
Texas First Bancshares, Inc.
On January 1, 2020 , the Company completed the merger with Texas First Bancshares, Inc., the parent company of Texas First State Bank, (collectively referred to as "Texas First"), pursuant to which Texas First was merged with and into the Company. Texas First operated 6 full-service banking offices in the Waco, Texas and Killeen -Temple, Texas metropolitan statistical areas ("MSA"). As of January 1, 2020 , Texas First collectively reported total assets of $396.9 million , total loans of $185.7 million and total deposits of $369.3 million . Under the terms of the definitive merger agreement, the Company issued approximately 1,040,000 shares of the Company's common stock plus $13.0 million in cash for all outstanding shares of Texas First. For more information regarding this transaction, see our Current Report on Form 8-K that was filed with the FDIC on January 2 , 2020.
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 26 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 the increases in its provision and allowance for credit losses and the discussion regarding negative pressure to its net interest revenue and net interest margin. 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 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 fourth quarter 2020 financial results on January 26, 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 $24 billion in assets. BancorpSouth operates approximately 305 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 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 our business; our: 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; mortgage production volume; 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 and natural disasters; adoption and use of critical accounting policies; adoption and implementation of new accounting standards and their effect on our financial results and our financial reporting; utilization of non-GAAP financial metrics; declaration and payment of dividends; ability to pay dividends or coupons on our 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 our 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, our 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 our 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 our 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 our 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 our 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, including any changes that result from the recent U.S. elections; FDIC special assessments or changes to regular assessments; 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 our 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, our operational or security systems or infrastructure, or those of third parties with whom we do 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 us or our 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 impact of actions taken to contain or treat COVID-19 on us, our employees, our customers, the global economy and the financial markets; international or political instability; impairment of our 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; and other factors as detailed from time to time in our press and news releases, periodic and current reports and other filings we file 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 our periodic and current reports filed with the FDIC, including those factors included in our Annual Report on Form 10-K for the year ended December 31, 2019 under the heading "Item 1A. Risk Factors," in our Quarterly Reports on Form 10-Q and in our Current Reports on Form 8-K.
Although we believe 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 our 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 we do 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 us to predict their occurrence or how they will affect us. All written or oral forward-looking statements attributable to us 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
Year Ended
Year Ended
12/31/2020
9/30/2020
6/30/2020
3/31/2020
12/31/2019
12/31/2020
12/31/2019
Earnings Summary:
Interest revenue
$ 199,287
$ 200,670
$ 197,472
$ 202,064
$ 203,812
$ 799,493
$ 775,012
Interest expense
22,351
24,739
26,902
34,534
33,038
108,526
125,068
Net interest revenue
176,936
175,931
170,570
167,530
170,774
690,967
649,944
Provision for credit losses
5,000
15,000
20,000
46,000
-
86,000
1,500
Net interest revenue, after provision
for credit losses
171,936
160,931
150,570
121,530
170,774
604,967
648,444
Noninterest revenue
78,826
89,924
91,258
76,496
74,697
336,504
280,681
Noninterest expense
167,911
155,505
162,504
168,006
162,351
653,926
629,607
Income before income taxes
82,851
95,350
79,324
30,020
83,120
287,545
299,518
Income tax expense
14,046
21,525
18,164
5,759
17,271
59,494
65,257
Net income
$ 68,805
$ 73,825
$ 61,160
$ 24,261
$ 65,849
$ 228,051
$ 234,261
Less: Preferred dividends
2,372
2,372
2,372
2,372
-
9,488
-
Net income available to common shareholders
$ 66,433
$ 71,453
$ 58,788
$ 21,889
$ 65,849
$ 218,563
$ 234,261
Balance Sheet - Period End Balances
Total assets
$ 24,081,194
$ 23,555,422
$ 23,236,176
$ 21,032,524
$ 21,052,576
$ 24,081,194
$ 21,052,576
Total earning assets
21,792,725
21,340,371
21,119,073
18,939,750
18,891,021
21,792,725
18,891,021
Total securities
6,231,006
5,659,785
4,973,171
4,468,340
4,481,974
6,231,006
4,481,974
Loans and leases, net of unearned income
15,022,479
15,327,735
15,427,421
14,224,645
14,089,683
15,022,479
14,089,683
Allowance for credit losses
244,422
250,624
237,025
218,199
119,066
244,422
119,066
Net book value of acquired loans (included in loans and leases above)
1,160,267
1,320,671
1,510,008
1,661,329
1,628,265
1,160,267
1,628,265
Paycheck protection program (PPP) loans (included in loans and leases above)
975,421
1,212,246
1,192,715
-
-
975,421
-
Remaining loan mark on acquired loans
13,886
16,198
19,977
22,286
46,240
13,886
46,240
Total deposits
19,846,441
19,412,979
19,179,486
16,887,916
16,410,699
19,846,441
16,410,699
Total deposits and securities sold under agreement to repurchase
20,484,156
20,024,434
19,849,502
17,426,878
16,924,121
20,484,156
16,924,121
Long-term debt
4,402
4,508
4,615
4,721
5,053
4,402
5,053
Junior subordinated debt securities
297,250
297,074
296,898
296,723
296,547
297,250
296,547
Total shareholders' equity
2,822,477
2,782,539
2,732,687
2,681,904
2,685,017
2,822,477
2,685,017
Common shareholders' equity
2,655,484
2,615,546
2,565,694
2,514,911
2,517,996
2,655,484
2,517,996
Balance Sheet - Average Balances
Total assets
$ 23,660,503
$ 23,318,877
$ 22,707,686
$ 21,189,637
$ 20,243,023
$ 22,723,386
$ 19,027,644
Total earning assets
21,497,938
21,241,896
20,594,889
19,113,449
18,125,676
20,616,184
17,036,618
Total securities
5,820,425
5,309,982
4,437,614
4,461,298
3,555,014
5,010,378
2,934,654
Loans and leases, net of unearned income
15,219,402
15,369,684
15,114,732
14,226,788
14,061,118
14,984,356
13,606,951
PPP loans (included in loans and leases above)
1,139,959
1,207,097
975,029
-
-
830,467
-
Total deposits
19,600,863
19,258,930
18,454,472
16,905,229
16,218,715
18,559,655
15,319,130
Total deposits and securities sold under agreement to repurchase
20,272,881
19,940,330
19,098,599
17,446,936
16,748,932
19,194,697
15,814,512
Long-term debt
4,488
4,592
4,699
4,800
5,138
4,644
5,415
Junior subordinated debt securities
297,145
296,969
296,793
296,617
135,535
296,882
34,162
Total shareholders' equity
2,774,589
2,729,870
2,738,434
2,658,699
2,572,750
2,725,545
2,366,745
Common shareholders' equity
2,607,596
2,562,877
2,571,441
2,491,678
2,498,033
2,558,545
2,347,913
Nonperforming Assets:
Non-accrual loans and leases
$ 96,378
$ 122,108
$ 126,753
$ 110,074
$ 78,796
$ 96,378
$ 78,796
Loans and leases 90+ days past due, still accruing
14,320
17,641
9,877
7,272
17,531
14,320
17,531
Restructured loans and leases, still accruing
10,475
11,154
11,575
11,284
15,184
10,475
15,184
Non-performing loans (NPLs)
121,173
150,903
148,205
128,630
111,511
121,173
111,511
Other real estate owned
11,395
6,397
7,164
9,200
6,746
11,395
6,746
Non-performing assets (NPAs)
$ 132,568
$ 157,300
$ 155,369
$ 137,830
$ 118,257
$ 132,568
$ 118,257
Financial Ratios and Other Data:
Return on average assets
1.16%
1.26%
1.08%
0.46%
1.29%
1.00%
1.23%
Operating return on average assets-excluding MSR*
1.23%
1.26%
1.12%
0.70%
1.33%
1.09%
1.34%
Return on average shareholders' equity
9.87%
10.76%
8.98%
3.67%
10.15%
8.37%
9.90%
Operating return on average shareholders' equity-excluding MSR*
10.49%
10.72%
9.29%
5.56%
10.46%
9.05%
10.79%
Return on average common shareholders' equity
10.14%
11.09%
9.19%
3.53%
10.46%
8.54%
9.98%
Operating return on average common shareholders' equity-excluding MSR*
10.80%
11.05%
9.53%
5.55%
10.78%
9.27%
10.88%
Return on average tangible equity*
14.66%
16.08%
13.43%
5.56%
15.47%
12.53%
15.04%
Operating return on average tangible equity-excluding MSR*
15.58%
16.03%
13.89%
8.42%
15.94%
13.56%
16.40%
Return on average tangible common equity*
15.54%
17.13%
14.20%
5.54%
16.19%
13.22%
15.22%
Operating return on average tangible common equity-excluding MSR*
16.56%
17.08%
14.71%
8.71%
16.68%
14.35%
16.60%
Pre-tax pre-provision net revenue to total average assets*
1.57%
1.88%
1.81%
1.74%
1.68%
1.75%
1.73%
Noninterest income to average assets
1.33%
1.53%
1.62%
1.45%
1.46%
1.48%
1.48%
Noninterest expense to average assets
2.82%
2.65%
2.88%
3.19%
3.18%
2.88%
3.31%
Net interest margin-fully taxable equivalent
3.29%
3.31%
3.35%
3.54%
3.76%
3.36%
3.84%
Net interest margin-fully taxable equivalent, excluding net accretion
on acquired loans and leases
3.24%
3.23%
3.30%
3.48%
3.61%
3.31%
3.72%
Net interest rate spread
3.07%
3.06%
3.08%
3.24%
3.44%
3.11%
3.53%
Efficiency ratio (tax equivalent)*
65.47%
58.36%
61.89%
68.65%
65.92%
63.47%
67.38%
Operating efficiency ratio-excluding MSR (tax equivalent)*
63.18%
58.41%
61.16%
63.89%
64.39%
61.62%
64.90%
Loan/deposit ratio
75.69%
78.96%
80.44%
84.23%
85.86%
75.69%
85.86%
Price to earnings multiple (close)
12.88
9.18
11.15
9.46
13.60
12.88
13.60
Market value to common book value
105.98%
75.99%
90.91%
77.21%
130.38%
105.98%
130.38%
Market value to common book value (avg)
97.56%
83.75%
84.79%
107.86%
128.18%
90.96%
122.58%
Market value to common tangible book value
161.00%
116.01%
140.44%
120.81%
201.13%
161.00%
201.13%
Market value to common tangible book value (avg)
148.21%
127.86%
130.99%
168.76%
197.74%
138.19%
189.09%
Employee FTE
4,596
4,691
4,742
4,737
4,693
4,596
4,693
*Denotes non-GAAP financial measure. Refer to related disclosure and reconciliation on pages 26 and 27.
Credit Quality Ratios:
Net charge-offs(recoveries) to average loans and leases (annualized)
0.29%
0.04%
0.03%
0.39%
(0.06% )
0.18%
0.02%
Provision for credit losses to average loans and leases (annualized)
0.13%
0.39%
0.53%
1.30%
0.00%
0.57%
0.01%
Allowance for credit losses to net loans and leases
1.63%
1.64%
1.54%
1.53%
0.85%
1.63%
0.85%
Allowance for credit losses to net loans and leases, excluding PPP loans
1.74%
1.78%
1.67%
1.53%
0.85%
1.74%
0.85%
Allowance for credit losses to non-performing loans and leases
201.71%
166.08%
159.93%
169.63%
106.78%
201.71%
106.78%
Allowance for credit losses to non-performing assets
184.37%
159.33%
152.56%
158.31%
100.68%
184.37%
100.68%
Non-performing loans and leases to net loans and leases
0.81%
0.98%
0.96%
0.90%
0.79%
0.81%
0.79%
Non-performing loans and leases to net loans and leases, excluding
acquired loans and leases
0.62%
0.74%
0.63%
0.64%
0.65%
0.62%
0.65%
Non-performing assets to total assets
0.55%
0.67%
0.67%
0.66%
0.56%
0.55%
0.56%
Non-performing assets to total assets, excluding acquired loans and leases
0.42%
0.49%
0.43%
0.44%
0.40%
0.42%
0.40%
Equity Ratios:
Total shareholders' equity to total assets
11.72%
11.81%
11.76%
12.75%
12.75%
11.72%
12.75%
Total common shareholders' equity to total assets
11.03%
11.10%
11.04%
11.96%
11.96%
11.03%
11.96%
Tangible shareholders' equity to tangible assets*
8.26%
8.30%
8.18%
8.82%
8.92%
8.26%
8.92%
Tangible shareholders' equity to tangible assets-excluding PPP loans*
8.63%
8.77%
8.65%
8.82%
8.92%
8.63%
8.92%
Tangible common shareholders' equity to tangible assets*
7.54%
7.56%
7.44%
7.99%
8.09%
7.54%
8.09%
Tangible common shareholders' equity to tangible assets-excluding PPP loans*
7.87%
7.99%
7.86%
7.99%
8.09%
7.87%
8.09%
Capital Adequacy:
Common Equity Tier 1 capital
10.70%
10.64%
10.21%
10.11%
10.57%
10.70%
10.57%
Tier 1 capital
11.70%
11.65%
11.22%
11.13%
11.60%
11.70%
11.60%
Total capital
14.24%
14.20%
13.79%
13.75%
14.17%
14.24%
14.17%
Tier 1 leverage capital
8.63%
8.59%
8.54%
8.90%
9.69%
8.63%
9.69%
Estimated for current quarter
Common Share Data:
Basic earnings per share
$ 0.65
$ 0.70
$ 0.57
$ 0.21
$ 0.63
$ 2.12
$ 2.31
Diluted earnings per share
0.65
0.69
0.57
0.21
0.63
2.12
2.30
Operating earnings per share*
0.69
0.70
0.57
0.25
0.67
2.20
2.40
Operating earnings per share- excluding MSR*
0.69
0.69
0.59
0.33
0.65
2.30
2.51
Cash dividends per share
0.190
0.185
0.185
0.185
0.185
0.745
0.710
Book value per share
25.89
25.50
25.01
24.50
24.09
25.89
24.09
Tangible book value per share*
17.04
16.71
16.19
15.66
15.62
17.04
15.62
Market value per share (last)
27.44
19.38
22.74
18.92
31.41
27.44
31.41
Market value per share (high)
28.54
24.29
25.93
31.61
32.97
31.61
33.45
Market value per share (low)
18.77
18.11
17.21
17.24
28.13
17.21
25.76
Market value per share (avg)
25.26
21.36
21.21
26.43
30.88
23.55
29.53
Dividend payout ratio
29.34%
26.56%
32.29%
88.20%
29.43%
35.12%
30.76%
Total shares outstanding
102,561,480
102,558,459
102,566,301
102,632,484
104,522,804
102,561,480
104,522,804
Average shares outstanding - basic
102,569,547
102,564,466
102,603,525
104,354,328
104,739,906
103,022,966
101,506,583
Average shares outstanding - diluted
102,817,409
102,839,749
102,827,225
104,733,897
105,144,032
103,304,570
101,810,640
Yield/Rate:
(Taxable equivalent basis)
Loans, loans held for sale, and leases net of unearned income
4.55%
4.54%
4.59%
5.00%
5.13%
4.66%
5.13%
Loans, loans held for sale, and leases net of unearned income, excluding
net accretion on acquired loans and leases
4.49%
4.44%
4.53%
4.93%
4.95%
4.59%
4.98%
Loans, loans held for sale, and leases net of unearned income, excluding
net accretion on acquired loans and leases - excluding PPP loans
4.53%
4.55%
4.67%
4.93%
4.95%
4.66%
4.98%
PPP loans
3.99%
3.11%
2.50%
N/A
N/A
3.38%
N/A
Available-for-sale securities:
Taxable
1.53%
1.64%
1.95%
1.99%
2.00%
1.75%
2.06%
Tax-exempt
3.40%
3.67%
3.86%
4.44%
4.69%
3.85%
4.82%
Short-term, FHLB and other equity investments
0.13%
0.19%
0.20%
1.53%
1.95%
0.43%
2.37%
Total interest earning assets and revenue
3.70%
3.77%
3.87%
4.27%
4.48%
3.89%
4.57%
Deposits
0.38%
0.44%
0.50%
0.67%
0.68%
0.49%
0.68%
Demand - interest bearing
0.47%
0.53%
0.61%
0.84%
0.88%
0.61%
0.89%
Savings
0.15%
0.18%
0.18%
0.26%
0.28%
0.19%
0.29%
Other time
1.28%
1.41%
1.54%
1.64%
1.68%
1.47%
1.61%
Total interest bearing deposits
0.57%
0.65%
0.74%
0.92%
0.96%
0.71%
0.95%
Short-term borrowings
0.26%
0.25%
0.39%
1.25%
1.51%
0.54%
1.93%
Total interest bearing deposits and short-term borrowings
0.55%
0.63%
0.71%
0.95%
1.01%
0.70%
1.03%
Junior subordinated debt
4.05%
4.24%
4.18%
4.42%
4.17%
4.40%
4.17%
Long-term debt
4.84%
4.85%
4.81%
4.96%
4.83%
4.87%
4.88%
Total interest bearing liabilities and expense
0.63%
0.71%
0.79%
1.03%
1.04%
0.78%
1.04%
Interest bearing liabilities to interest earning assets
65.99%
65.61%
66.65%
70.81%
69.37%
67.17%
70.25%
Net interest tax equivalent adjustment
$ 709
$ 618
$ 725
$ 714
$ 800
$ 2,766
$ 3,782
*Denotes non-GAAP financial measure. Refer to related disclosure and reconciliation on pages 26 and 27.
BancorpSouth Bank
Consolidated Balance Sheets
(Unaudited)
Dec-20
Sep-20
Jun-20
Mar-20
Dec-19
(Dollars in thousands)
Assets
Cash and due from banks
$ 284,095
$ 306,164
$ 240,354
$ 253,495
$ 261,773
Interest bearing deposits with other banks
and Federal funds sold
133,273
39,782
318,615
29,490
71,233
Available-for-sale securities, at fair value
6,231,006
5,659,785
4,973,171
4,468,340
4,481,974
Loans and leases*
15,039,239
15,344,006
15,444,794
14,241,912
14,107,743
Less: Unearned income
16,760
16,271
17,373
17,267
18,060
Allowance for credit losses
244,422
250,624
237,025
218,199
119,066
Net loans and leases
14,778,057
15,077,111
15,190,396
14,006,446
13,970,617
Loans held for sale
397,076
304,215
391,051
194,321
210,361
Premises and equipment, net
508,147
508,149
504,748
497,669
480,901
Accrued interest receivable
106,318
110,185
101,321
70,463
65,173
Goodwill
851,612
847,531
847,984
848,242
825,679
Other identifiable intangibles
55,899
54,757
56,989
59,345
60,008
Bank owned life insurance
333,264
331,799
329,167
327,312
326,417
Other real estate owned
11,395
6,397
7,164
9,200
6,746
Other assets
391,052
309,547
275,216
268,201
291,694
Total Assets
$ 24,081,194
$ 23,555,422
$ 23,236,176
$ 21,032,524
$ 21,052,576
Liabilities
Deposits:
Demand: Noninterest bearing
$ 6,341,457
$ 6,336,792
$ 6,385,370
$ 4,861,155
$ 4,661,821
Interest bearing
8,524,010
8,170,402
7,907,637
7,268,053
7,176,934
Savings
2,452,059
2,325,980
2,234,853
2,013,343
1,937,985
Other time
2,528,915
2,579,805
2,651,626
2,745,365
2,633,959
Total deposits
19,846,441
19,412,979
19,179,486
16,887,916
16,410,699
Securities sold under agreement to repurchase
637,715
611,455
670,016
538,962
513,422
Federal funds purchased
and other short-term borrowing
-
95,217
220
290,224
725,000
Accrued interest payable
10,885
15,286
13,476
17,482
15,124
Junior subordinated debt securities
297,250
297,074
296,898
296,723
296,547
Long-term debt
4,402
4,508
4,615
4,721
5,053
Other liabilities
462,024
336,364
338,778
314,592
401,714
Total Liabilities
21,258,717
20,772,883
20,503,489
18,350,620
18,367,559
Shareholders' Equity
Preferred stock
166,993
166,993
166,993
166,993
167,021
Common stock
256,404
256,396
256,416
256,581
261,307
Capital surplus
565,187
565,635
561,541
558,114
605,976
Accumulated other comprehensive income (loss)
11,923
18,490
25,191
17,849
(62,663)
Retained earnings
1,821,970
1,775,025
1,722,546
1,682,367
1,713,376
Total Shareholders' Equity
2,822,477
2,782,539
2,732,687
2,681,904
2,685,017
Total Liabilities & Shareholders' Equity
$ 24,081,194
$ 23,555,422
$ 23,236,176
$ 21,032,524
$ 21,052,576
*Includes $975.4 million , $1.21 2 billion and $1.19 3 billion in PPP loans at December 31, 2020, September 30, 2020 and June 30, 2020.
BancorpSouth Bank
Consolidated Average Balance Sheets
(Unaudited)
Dec-20
Sep-20
Jun-20
Mar-20
Dec-19
(Dollars in thousands)
Assets
Cash and due from banks
$ 247,799
$ 232,421
$ 229,334
$ 246,860
$ 244,444
Interest bearing deposits with other banks
and Federal funds sold
171,650
257,057
760,789
239,766
300,495
Available-for-sale securities, at fair value
5,820,425
5,309,982
4,437,614
4,461,298
3,555,014
Loans and leases*
15,235,827
15,386,721
15,132,600
14,244,649
14,078,793
Less: Unearned income
16,425
17,037
17,868
17,861
17,675
Allowance for credit losses
247,049
236,536
217,508
193,796
117,668
Net loans and leases
14,972,353
15,133,148
14,897,224
14,032,992
13,943,450
Loans held for sale
277,600
296,352
261,377
147,798
173,649
Premises and equipment, net
508,053
507,190
499,767
494,413
481,623
Accrued interest receivable
105,513
104,435
137,456
64,010
60,678
Goodwill
852,472
847,744
848,160
844,635
823,812
Other identifiable intangibles
54,858
56,045
58,280
58,805
60,559
Bank owned life insurance
332,543
330,642
328,037
326,808
328,567
Other real estate owned
14,872
7,754
8,410
8,151
7,820
Other assets
302,365
236,107
241,238
264,101
262,912
Total Assets
$ 23,660,503
$ 23,318,877
$ 22,707,686
$ 21,189,637
$ 20,243,023
Liabilities
Deposits:
Demand: Noninterest bearing
$ 6,391,006
$ 6,340,942
$ 5,942,570
$ 4,717,202
$ 4,803,104
Interest bearing
8,268,528
8,022,755
7,674,479
7,466,674
6,872,921
Savings
2,386,034
2,280,860
2,152,092
1,975,690
1,913,650
Other time
2,555,295
2,614,373
2,685,331
2,745,663
2,629,040
Total deposits
19,600,863
19,258,930
18,454,472
16,905,229
16,218,715
Securities sold under agreement to repurchase
672,018
681,400
644,127
541,707
530,217
Federal funds purchased
and other short-term borrowing
3,893
36,696
269,121
502,257
487,272
Accrued interest payable
14,175
15,589
16,268
19,205
14,942
Junior subordinated debt securities
297,145
296,969
296,793
296,617
135,535
Long-term debt
4,488
4,592
4,699
4,800
5,138
Other liabilities
293,332
294,831
283,772
261,123
278,454
Total Liabilities
20,885,914
20,589,007
19,969,252
18,530,938
17,670,273
Shareholders' Equity
Preferred stock
166,993
166,993
166,993
167,021
74,717
Common stock
256,422
256,412
256,515
261,065
261,905
Capital surplus
568,343
563,267
559,737
600,880
611,667
Accumulated other comprehensive income (loss)
12,432
24,758
23,016
(36,367)
(53,111)
Retained earnings
1,770,399
1,718,440
1,732,173
1,666,100
1,677,572
Total Shareholders' Equity
2,774,589
2,729,870
2,738,434
2,658,699
2,572,750
Total Liabilities & Shareholders' Equity
$ 23,660,503
$ 23,318,877
$ 22,707,686
$ 21,189,637
$ 20,243,023
*Includes $1.14 0 billion, $1.20 7 billion and $975.0 million in PPP loans for the quarter ended December 31, 2020, September 30, 2020 and June 30, 2020.
BancorpSouth Bank
Consolidated Condensed Statements of Income
(Dollars in thousands, except per share data)
(Unaudited)
Quarter Ended
Year Ended
Dec-20
Sep-20
Jun-20
Mar-20
Dec-19
Dec-20
Dec-19
INTEREST REVENUE:
Loans and leases
$ 174,072
$ 175,810
$ 173,164
$ 177,019
$ 182,269
$ 700,065
$ 697,425
Deposits with other banks
50
74
207
739
1,225
1,070
6,489
Federal funds sold, securities purchased
under agreement to resell, FHLB and
other equity investments
6
52
178
315
426
551
2,077
Available-for-sale securities:
Taxable
21,895
21,280
20,783
21,508
17,241
85,466
56,660
Tax-exempt
760
986
1,178
1,060
1,266
3,984
7,160
Loans held for sale
2,504
2,468
1,962
1,423
1,385
8,357
5,201
Total interest revenue
199,287
200,670
197,472
202,064
203,812
799,493
775,012
INTEREST EXPENSE:
Interest bearing demand
9,766
10,773
11,631
15,522
15,202
47,692
58,771
Savings
872
1,012
943
1,290
1,334
4,117
5,361
Other time
8,189
9,287
10,296
11,168
11,134
38,940
39,380
Federal funds purchased and securities sold
under agreement to repurchase
276
279
291
1,436
1,591
2,282
7,195
Short-term and long-term debt
47
49
477
1,857
2,293
2,430
12,875
Junior subordinated debt
3,201
3,338
3,263
3,261
1,482
13,063
1,482
Other
-
1
1
-
2
2
4
Total interest expense
22,351
24,739
26,902
34,534
33,038
108,526
125,068
Net interest revenue
176,936
175,931
170,570
167,530
170,774
690,967
649,944
Provision for credit losses
5,000
15,000
20,000
46,000
-
86,000
1,500
Net interest revenue, after provision for
credit losses
171,936
160,931
150,570
121,530
170,774
604,967
648,444
NONINTEREST REVENUE:
Mortgage banking
20,129
27,097
29,557
9,470
10,102
86,253
19,782
Credit card, debit card and merchant fees
10,053
9,938
9,080
9,176
9,836
38,247
38,656
Deposit service charges
9,708
8,892
7,647
11,682
12,193
37,929
46,015
Security gains(losses), net
63
18
62
(85)
(41)
58
174
Insurance commissions
29,815
32,750
33,118
29,603
27,648
125,286
123,291
Wealth management
6,751
6,471
6,421
6,570
6,617
26,213
24,809
Other
2,307
4,758
5,373
10,080
8,342
22,518
27,954
Total noninterest revenue
78,826
89,924
91,258
76,496
74,697
336,504
280,681
NONINTEREST EXPENSE:
Salaries and employee benefits
97,215
104,219
108,103
108,272
97,137
417,809
396,500
Occupancy, net of rental income
13,004
13,053
12,890
12,708
12,267
51,655
48,129
Equipment
4,756
4,519
4,762
4,649
4,725
18,686
17,712
Deposit insurance assessments
1,696
1,522
1,962
1,546
2,200
6,726
9,143
Pension settlement expense
5,846
-
-
-
-
5,846
-
Other
45,394
32,192
34,787
40,831
46,022
153,204
158,123
Total noninterest expense
167,911
155,505
162,504
168,006
162,351
653,926
629,607
Income before income taxes
82,851
95,350
79,324
30,020
83,120
287,545
299,518
Income tax expense
14,046
21,525
18,164
5,759
17,271
59,494
65,257
Net income
$ 68,805
$ 73,825
$ 61,160
$ 24,261
$ 65,849
$ 228,051
$ 234,261
Less: Preferred dividends
2,372
2,372
2,372
2,372
-
9,488
-
Net income available to common shareholders
$ 66,433
$ 71,453
$ 58,788
$ 21,889
$ 65,849
$ 218,563
$ 234,261
Net income per common share: Basic
$ 0.65
$ 0.70
$ 0.57
$ 0.21
$ 0.63
$ 2.12
$ 2.31
Diluted
$ 0.65
$ 0.69
$ 0.57
$ 0.21
$ 0.63
$ 2.12
$ 2.30
BancorpSouth Bank
Selected Loan Data
(Dollars in thousands)
(Unaudited)
Quarter Ended
Dec-20
Sep-20
Jun-20
Mar-20
Dec-19
LOAN AND LEASE PORTFOLIO:
Commercial and industrial
Commercial and industrial-non real estate
2,673,429
2,937,608
3,038,957
2,008,043
1,979,507
Commercial and industrial-owner occupied
2,281,127
2,297,008
2,296,287
2,290,585
2,268,813
Total commercial and industrial
4,954,556
5,234,616
5,335,244
4,298,628
4,248,320
Commercial real estate
Agricultural
317,994
333,839
333,615
339,539
337,349
Construction, acquisition and development
1,728,682
1,700,030
1,658,678
1,582,039
1,577,342
Commercial real estate
3,211,434
3,229,959
3,323,744
3,303,537
3,220,914
Total commercial real estate
5,258,110
5,263,828
5,316,037
5,225,115
5,135,605
Consumer
Consumer mortgages
3,726,241
3,704,490
3,646,168
3,572,277
3,543,075
Home equity
630,097
658,708
655,543
686,202
683,515
Credit cards
89,077
85,760
86,592
93,896
102,559
Total consumer
4,445,415
4,448,958
4,388,303
4,352,375
4,329,149
All other
364,398
380,333
387,837
348,527
376,609
Total loans
$ 15,022,479
$ 15,327,735
$ 15,427,421
$ 14,224,645
$ 14,089,683
ALLOWANCE FOR CREDIT LOSSES:
Balance, beginning of period
$ 250,624
$ 237,025
$ 218,199
$ 119,066
$ 116,908
Impact of adopting ASC 326 - cumulative effect adjustment
-
-
-
40,000
-
Impact of adopting ASC 326 - purchased loans with credit
deterioration
-
-
-
22,634
-
Loans and leases charged-off:
Commercial and industrial
Commercial and industrial-non real estate
(4,343)
(560)
(1,506)
(10,792)
(1,273)
Commercial and industrial-owner occupied
(1,168)
(441)
(13)
(184)
(192)
Total commercial and industrial
(5,511)
(1,001)
(1,519)
(10,976)
(1,465)
Commercial real estate
Agricultural
(155)
-
(21)
(65)
(11)
Construction, acquisition and development
(1,773)
-
(9)
(3,173)
(26)
Commercial real estate
(3,134)
(738)
-
(67)
-
Total commercial real estate
(5,062)
(738)
(30)
(3,305)
(37)
Consumer
Consumer mortgages
(731)
(81)
(124)
(524)
(687)
Home equity
(395)
(41)
(162)
(236)
(173)
Credit cards
(458)
(682)
(703)
(798)
(797)
Total consumer
(1,584)
(804)
(989)
(1,558)
(1,657)
All other
(875)
(599)
(396)
(914)
(965)
Total loans charged-off
(13,032)
(3,142)
(2,934)
(16,753)
(4,124)
Recoveries:
Commercial and industrial
Commercial and industrial-non real estate
779
294
277
355
353
Commercial and industrial-owner occupied
37
163
136
1,179
30
Total commercial and industrial
816
457
413
1,534
383
Commercial real estate
Agricultural
24
3
6
6
4
Construction, acquisition and development
73
55
172
245
584
Commercial real estate
45
209
50
135
4,212
Total commercial real estate
142
267
228
386
4,800
Consumer
Consumer mortgages
230
352
345
397
407
Home equity
151
132
259
80
216
Credit cards
211
270
195
285
218
Total consumer
592
754
799
762
841
All other
280
263
320
344
258
Total recoveries
1,830
1,741
1,760
3,026
6,282
Net (charge-offs)recoveries
(11,202)
(1,401)
(1,174)
(13,727)
2,158
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
$ 244,422
$ 250,624
$ 237,025
$ 218,199
$ 119,066
Average loans for period
$ 15,219,402
$ 15,369,684
$ 15,114,732
$ 14,226,788
$ 14,061,118
Ratio:
Net charge-offs(recoveries) to average loans (annualized)
0.29%
0.04%
0.03%
0.39%
(0.06% )
BancorpSouth Bank
Selected Loan Data
(Dollars in thousands)
(Unaudited)
Quarter Ended
Dec-20
Sep-20
Jun-20
Mar-20
Dec-19
BXS ORIGINATED LOANS AND LEASES:
Loans and leases charged off:
Commercial and industrial
Commercial and industrial-non real estate
$ (1,991)
$ (490)
$ (420)
$ (230)
$ (844)
Commercial and industrial-owner occupied
(303)
(434)
(13)
(19)
(184)
Total commercial and industrial
(2,294)
(924)
(433)
(249)
(1,028)
Commercial real estate
Agricultural
(124)
-
-
(65)
(6)
Construction, acquisition and development
(1,709)
-
-
(121)
(26)
Commercial real estate
(1,704)
(155)
-
(67)
-
Total real estate
(3,537)
(155)
-
(253)
(32)
Consumer
Consumer mortgages
(537)
(70)
(113)
(357)
(648)
Home equity
(395)
(41)
(162)
(236)
(173)
Credit cards
(458)
(682)
(703)
(798)
(797)
Total consumer
(1,390)
(793)
(978)
(1,391)
(1,618)
All other
(698)
(459)
(288)
(704)
(782)
Total loans charged off
(7,919)
(2,331)
(1,699)
(2,597)
(3,460)
Recoveries:
Commercial and industrial
Commercial and industrial-non real estate
645
231
210
325
277
Commercial and industrial-owner occupied
27
163
136
1,177
30
Total commercial and industrial
672
394
346
1,502
307
Commercial real estate
Agricultural
23
3
5
4
4
Construction, acquisition and development
73
55
170
244
583
Commercial real estate
45
208
50
135
4,212
Total real estate
141
266
225
383
4,799
Consumer
Consumer mortgages
221
350
343
395
405
Home equity
149
130
258
79
215
Credit cards
211
270
195
285
218
Total consumer
581
750
796
759
838
All other
249
235
275
316
245
Total recoveries
1,643
1,645
1,642
2,960
6,189
Net (charge-offs)/recoveries
$ (6,276)
$ (686)
$ (57)
$ 363
$ 2,729
BancorpSouth Bank
Selected Loan Data
(Dollars in thousands)
(Unaudited)
Quarter Ended
Dec-20
Sep-20
Jun-20
Mar-20
Dec-19
ACQUIRED LOANS AND LEASES:
Loans and leases charged off:
Commercial and industrial
Commercial and industrial-non real estate
$ (2,352)
$ (70)
$ (1,086)
$ (10,562)
$ (429)
Commercial and industrial-owner occupied
(865)
(7)
-
(165)
(8)
Total commercial and industrial
(3,217)
(77)
(1,086)
(10,727)
(437)
Commercial real estate
Agricultural
(31)
-
(21)
-
(5)
Construction, acquisition and development
(64)
-
(9)
(3,052)
-
Commercial real estate
(1,430)
(583)
-
-
-
Total real estate
(1,525)
(583)
(30)
(3,052)
(5)
Consumer
Consumer mortgages
(194)
(11)
(11)
(167)
(39)
Home equity
-
-
-
-
-
Credit cards
-
-
-
-
-
Total consumer
(194)
(11)
(11)
(167)
(39)
All other
(177)
(140)
(108)
(210)
(183)
Total loans charged off
(5,113)
(811)
(1,235)
(14,156)
(664)
Recoveries:
Commercial and industrial
Commercial and industrial-non real estate
134
63
67
30
76
Commercial and industrial-owner occupied
10
-
-
2
-
Total commercial and industrial
144
63
67
32
76
Commercial real estate
Agricultural
1
-
1
2
-
Construction, acquisition and development
-
-
2
1
1
Commercial real estate
-
1
-
-
-
Total real estate
1
1
3
3
1
Consumer
Consumer mortgages
9
2
2
2
2
Home equity
2
2
1
1
1
Credit cards
-
-
-
-
-
Total consumer
11
4
3
3
3
All other
31
28
45
28
13
Total recoveries
187
96
118
66
93
Net (charge-offs)/recoveries
$ (4,926)
$ (715)
$ (1,117)
$ (14,090)
$ (571)
BancorpSouth Bank
Selected Loan Data
(Dollars in thousands)
(Unaudited)
Quarter Ended
Dec-20
Sep-20
Jun-20
Mar-20
Dec-19
NON-PERFORMING ASSETS
NON-PERFORMING LOANS AND LEASES:
Nonaccrual Loans and Leases
Commercial and industrial
Commercial and industrial-non real estate
$ 12,768
$ 17,936
$ 16,124
$ 16,589
$ 11,105
Commercial and industrial-owner occupied
15,783
18,343
16,745
11,212
7,838
Total commercial and industrial
28,551
36,279
32,869
27,801
18,943
Commercial real estate
Agricultural
5,013
5,907
5,244
5,454
4,772
Construction, acquisition and development
9,738
10,434
9,715
13,899
6,225
Commercial real estate
16,249
32,554
45,047
29,697
16,199
Total commercial real estate
31,000
48,895
60,006
49,050
27,196
Consumer
Consumer mortgages
32,951
32,872
30,672
29,834
28,879
Home equity
2,657
3,325
2,584
2,597
2,993
Credit cards
173
144
90
122
63
Total consumer
35,781
36,341
33,346
32,553
31,935
All other
1,046
593
532
670
722
Total nonaccrual loans and leases
$ 96,378
$ 122,108
$ 126,753
$ 110,074
$ 78,796
Loans and Leases 90+ Days Past Due, Still Accruing:
14,320
17,641
9,877
7,272
17,531
Restructured Loans and Leases, Still Accruing
10,475
11,154
11,575
11,284
15,184
Total non-performing loans and leases
$ 121,173
$ 150,903
$ 148,205
$ 128,630
$ 111,511
OTHER REAL ESTATE OWNED:
11,395
6,397
7,164
9,200
6,746
Total Non-performing Assets
$ 132,568
$ 157,300
$ 155,369
$ 137,830
$ 118,257
BXS originated assets
$ 97,025
$ 109,418
$ 94,155
$ 85,908
$ 78,295
Acquired assets
35,543
47,882
61,214
51,922
39,962
Total Non-performing Assets
$ 132,568
$ 157,300
$ 155,369
$ 137,830
$ 118,257
Additions to Nonaccrual Loans and Leases During the Quarter
$ 11,087
$ 19,973
$ 36,619
$ 47,523
$ 25,147
Loans and Leases 30-89 Days Past Due, Still Accruing:
BXS originated loans
$ 40,424
$ 42,978
$ 35,002
$ 54,315
$ 44,559
Acquired loans
6,048
5,694
10,450
14,405
23,054
Total Loans and Leases 30-89 days past due, still accruing
$ 46,472
$ 48,672
$ 45,452
$ 68,720
$ 67,613
BancorpSouth Bank
Selected Loan Data
(Dollars in thousands)
(Unaudited)
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
September 30, 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
$ 2,875,468
$ -
$ 47,526
$ 178
$ -
$ 3,664
$ 10,772
$ 2,937,608
Commercial and industrial-owner occupied
2,224,302
-
56,919
-
-
12,116
3,671
2,297,008
Total commercial and industrial
5,099,770
-
104,445
178
-
15,780
14,443
5,234,616
Commercial real estate
Agricultural
324,010
-
7,109
-
-
725
1,995
333,839
Construction, acquisition and development
1,656,961
-
34,197
-
-
2,961
5,911
1,700,030
Commercial real estate
3,070,472
-
127,835
-
-
27,493
4,159
3,229,959
Total commercial real estate
5,051,443
-
169,141
-
-
31,179
12,065
5,263,828
Consumer
Consumer mortgages
3,615,071
-
85,827
-
-
2,859
733
3,704,490
Home equity
651,525
-
7,183
-
-
-
-
658,708
Credit cards
85,760
-
-
-
-
-
-
85,760
Total consumer
4,352,356
-
93,010
-
-
2,859
733
4,448,958
All other
374,374
-
5,887
-
-
-
72
380,333
Total loans
$ 14,877,943
$ -
$ 372,483
$ 178
$ -
$ 49,818
$ 27,313
$ 15,327,735
BXS originated loans
$ 13,592,460
$ -
$ 252,875
$ 178
$ -
$ 30,909
$ -
$ 13,876,422
Acquired loans*
1,285,483
-
119,608
-
-
18,909
27,313
1,451,313
Total Loans
$ 14,877,943
$ -
$ 372,483
$ 178
$ -
$ 49,818
$ 27,313
$ 15,327,735
*Includes certain loans that are no longer included in the "Net book value of acquired loans" on page 12 as a result of maturity, refinance, or other triggering event.
BancorpSouth Bank
Selected Loan Data
(Dollars in thousands)
(Unaudited)
Quarter Ended
Dec-20
Sep-20
Jun-20
Mar-20
Dec-19
LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE:
Pass
$ 14,602,079
$ 14,877,943
$ 14,985,673
$ 13,821,602
$ 13,738,979
Special Mention
8,736
-
4,264
7,129
2,240
Substandard
358,988
372,483
350,264
323,697
298,491
Doubtful
172
178
179
191
194
Loss
-
-
-
667
-
Impaired
29,545
49,818
57,406
40,627
24,094
Purchased Credit Deteriorated (Loss)
22,959
27,313
29,635
30,732
-
Purchased Credit Impaired
-
-
-
-
25,685
Total
$ 15,022,479
$ 15,327,735
$ 15,427,421
$ 14,224,645
$ 14,089,683
BXS ORIGINATED LOAN PORTFOLIO BY INTERNALLY
ASSIGNED GRADE:
Pass
$ 13,459,529
$ 13,592,460
$ 13,516,292
$ 12,150,616
$ 12,080,336
Special Mention
8,736
-
2,741
2,045
-
Substandard
259,682
252,875
231,687
225,506
202,017
Doubtful
172
178
179
191
194
Loss
-
-
-
-
-
Impaired
17,520
30,909
28,288
22,356
17,110
Purchased Credit Deteriorated (Loss)
-
-
-
-
-
Purchased Credit Impaired
-
-
-
-
-
Total
$ 13,745,639
$ 13,876,422
$ 13,779,187
$ 12,400,714
$ 12,299,657
ACQUIRED LOAN PORTFOLIO BY INTERNALLY
ASSIGNED GRADE:
Pass
$ 1,142,550
$ 1,285,483
$ 1,469,381
$ 1,670,986
$ 1,658,643
Special Mention
-
-
1,523
5,084
2,240
Substandard
99,306
119,608
118,577
98,191
96,474
Doubtful
-
-
-
-
-
Loss
-
-
-
667
-
Impaired
12,025
18,909
29,118
18,271
6,984
Purchased Credit Deteriorated (Loss)
22,959
27,313
29,635
30,732
-
Purchased Credit Impaired
-
-
-
-
25,685
Total
$ 1,276,840
$ 1,451,313
$ 1,648,234
$ 1,823,931
$ 1,790,026
BancorpSouth Bank
Geographical Information
(Dollars in thousands)
(Unaudited)
December 31, 2020
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
$ 235,705
$ 203,719
$ 315,937
$ 685,643
$ 78,660
$ 156,025
$ 993,617
$ 4,123
$ 2,673,429
Commercial and industrial-owner occupied
266,149
184,830
230,662
615,647
64,430
123,899
785,629
9,881
2,281,127
Total commercial and industrial
501,854
388,549
546,599
1,301,290
143,090
279,924
1,779,246
14,004
4,954,556
Commercial real estate
Agricultural
26,568
67,754
18,735
69,091
6,818
10,552
117,374
1,102
317,994
Construction, acquisition and development
176,272
56,042
79,577
333,078
20,293
87,469
975,951
-
1,728,682
Commercial real estate
332,075
336,629
260,110
664,930
221,773
221,706
1,171,593
2,618
3,211,434
Total commercial real estate
534,915
460,425
358,422
1,067,099
248,884
319,727
2,264,918
3,720
5,258,110
Consumer
Consumer mortgages
598,700
325,951
342,591
820,025
111,956
326,826
1,148,809
51,383
3,726,241
Home equity
94,774
46,559
77,749
218,451
16,314
133,636
42,268
346
630,097
Credit cards
-
-
-
-
-
-
-
89,077
89,077
Total consumer
693,474
372,510
420,340
1,038,476
128,270
460,462
1,191,077
140,806
4,445,415
All other
56,584
39,079
37,097
114,565
3,054
24,281
80,821
8,917
364,398
Total loans
$ 1,786,827
$ 1,260,563
$ 1,362,458
$ 3,521,430
$ 523,298
$ 1,084,394
$ 5,316,062
$ 167,447
$ 15,022,479
Loan growth, excluding loans acquired during
the quarter (annualized)
(8.03% )
(14.12% )
(27.10% )
(8.00% )
(6.33% )
(26.19% )
2.81%
(6.11% )
(7.92% )
Loan growth, excluding PPP loans (annualized)
0.96%
(7.80% )
(21.61% )
(2.52% )
(3.49% )
(17.32% )
8.16%
4.28%
(1.78% )
NON-PERFORMING LOANS AND LEASES:
Commercial and industrial
Commercial and industrial-non real estate
$ 233
$ 1,050
$ 1,774
$ 1,113
$ 1,408
$ 530
$ 7,202
$ 283
$ 13,593
Commercial and industrial-owner occupied
1,211
1,630
497
3,196
166
280
13,938
-
20,918
Total commercial and industrial
1,444
2,680
2,271
4,309
1,574
810
21,140
283
34,511
Commercial real estate
Agricultural
312
409
44
988
-
-
3,264
-
5,017
Construction, acquisition and development
102
133
1,692
932
-
215
6,949
-
10,023
Commercial real estate
3,027
204
4,488
1,054
-
94
8,282
-
17,149
Total commercial real estate
3,441
746
6,224
2,974
-
309
18,495
-
32,189
Consumer
Consumer mortgages
9,401
3,621
4,345
13,420
1,807
2,646
12,738
1,323
49,301
Home equity
331
115
306
859
103
1,038
399
-
3,151
Credit cards
-
-
-
-
-
-
-
918
918
Total consumer
9,732
3,736
4,651
14,279
1,910
3,684
13,137
2,241
53,370
All other
191
2
97
116
-
14
678
5
1,103
Total loans
$ 14,808
$ 7,164
$ 13,243
$ 21,678
$ 3,484
$ 4,817
$ 53,450
$ 2,529
$ 121,173
NON-PERFORMING LOANS AND LEASES
AS A PERCENTAGE OF OUTSTANDING:
Commercial and industrial
Commercial and industrial-non real estate
0.10%
0.52%
0.56%
0.16%
1.79%
0.34%
0.72%
6.86%
0.51%
Commercial and industrial-owner occupied
0.46%
0.88%
0.22%
0.52%
0.26%
0.23%
1.77%
0.00%
0.92%
Total commercial and industrial
0.29%
0.69%
0.42%
0.33%
1.10%
0.29%
1.19%
2.02%
0.70%
Commercial real estate
Agricultural
1.17%
0.60%
0.23%
1.43%
0.00%
0.00%
2.78%
0.00%
1.58%
Construction, acquisition and development
0.06%
0.24%
2.13%
0.28%
0.00%
0.25%
0.71%
N/A
0.58%
Commercial real estate
0.91%
0.06%
1.73%
0.16%
0.00%
0.04%
0.71%
0.00%
0.53%
Total commercial real estate
0.64%
0.16%
1.74%
0.28%
0.00%
0.10%
0.82%
0.00%
0.61%
Consumer
Consumer mortgages
1.57%
1.11%
1.27%
1.64%
1.61%
0.81%
1.11%
2.57%
1.32%
Home equity
0.35%
0.25%
0.39%
0.39%
0.63%
0.78%
0.94%
0.00%
0.50%
Credit cards
N/A
N/A
N/A
N/A
N/A
N/A
N/A
1.03%
1.03%
Total consumer
1.40%
1.00%
1.11%
1.37%
1.49%
0.80%
1.10%
1.59%
1.20%
All other
0.34%
0.01%
0.26%
0.10%
0.00%
0.06%
0.84%
0.06%
0.30%
Total loans
0.83%
0.57%
0.97%
0.62%
0.67%
0.44%
1.01%
1.51%
0.81%
BancorpSouth Bank
Noninterest Revenue and Expense
(Dollars in thousands)
(Unaudited)
Quarter Ended
Year Ended
Dec-20
Sep-20
Jun-20
Mar-20
Dec-19
Dec-20
Dec-19
NONINTEREST REVENUE:
Mortgage banking excl. MSR and MSR Hedge market value adj
$ 19,917
$ 26,667
$ 31,930
$ 20,553
$ 6,938
$ 99,067
$ 34,297
MSR and MSR Hedge market value adjustment
212
430
(2,373)
(11,083)
3,164
(12,814)
(14,515)
Credit card, debit card and merchant fees
10,053
9,938
9,080
9,176
9,836
38,247
38,656
Deposit service charges
9,708
8,892
7,647
11,682
12,193
37,929
46,015
Securities gains (losses), net
63
18
62
(85)
(41)
58
174
Insurance commissions
29,815
32,750
33,118
29,603
27,648
125,286
123,291
Trust income
4,046
3,902
4,064
4,013
3,951
16,025
16,042
Annuity fees
53
53
54
55
136
215
830
Brokerage commissions and fees
2,652
2,516
2,303
2,502
2,530
9,973
7,937
Bank-owned life insurance
2,425
1,902
1,855
1,999
3,427
8,181
9,632
Other miscellaneous income
(118)
2,856
3,518
8,081
4,915
14,337
18,322
Total noninterest revenue
$ 78,826
$ 89,924
$ 91,258
$ 76,496
$ 74,697
$ 336,504
$ 280,681
NONINTEREST EXPENSE:
Salaries and employee benefits
$ 97,215
$ 104,219
$ 108,103
$ 108,272
$ 97,137
$ 417,809
$ 396,500
Occupancy, net of rental income
13,004
13,053
12,890
12,708
12,267
51,655
48,129
Equipment
4,756
4,519
4,762
4,649
4,725
18,686
17,712
Deposit insurance assessments
1,696
1,522
1,962
1,546
2,200
6,726
9,143
Pension settlement expense
5,846
-
-
-
-
5,846
-
Advertising
899
826
918
1,099
1,153
3,742
4,909
Foreclosed property expense
2,122
(278)
1,306
924
855
4,074
2,868
Telecommunications
1,448
1,462
1,512
1,461
1,504
5,883
5,663
Public relations
897
1,130
459
680
880
3,166
3,648
Data processing
9,980
9,477
9,693
9,646
10,041
38,796
35,517
Computer software
5,301
4,779
4,979
4,315
4,478
19,374
15,837
Amortization of intangibles
2,499
2,357
2,355
2,394
2,508
9,605
9,118
Legal
1,474
(316)
1,375
898
854
3,431
3,555
Merger expense
212
129
510
4,494
5,782
5,345
13,871
Postage and shipping
1,418
1,199
1,198
1,441
1,353
5,256
5,263
Other miscellaneous expense
19,144
11,427
10,482
13,479
16,614
54,532
57,874
Total noninterest expense
$ 167,911
$ 155,505
$ 162,504
$ 168,006
$ 162,351
$ 653,926
$ 629,607
INSURANCE COMMISSIONS:
Property and casualty commissions
$ 21,304
$ 24,060
$ 23,644
$ 21,246
$ 19,994
$ 90,254
$ 87,304
Life and health commissions
5,915
6,072
6,771
6,175
5,979
24,933
25,432
Risk management income
829
609
540
532
667
2,510
2,440
Other
1,767
2,009
2,163
1,650
1,008
7,589
8,115
Total insurance commissions
$ 29,815
$ 32,750
$ 33,118
$ 29,603
$ 27,648
$ 125,286
$ 123,291
BancorpSouth Bank
Selected Additional Information
(Dollars in thousands)
(Unaudited)
Quarter Ended
Dec-20
Sep-20
Jun-20
Mar-20
Dec-19
MORTGAGE SERVICING RIGHTS:
Fair value, beginning of period
$ 44,944
$ 40,821
$ 42,243
$ 57,109
$ 51,492
Additions to mortgage servicing rights:
Originations of servicing assets
6,608
7,041
4,297
3,079
4,025
Changes in fair value:
Due to payoffs/paydowns
(3,898)
(3,198)
(3,144)
(2,506)
(2,323)
Due to change in valuation inputs or
assumptions used in the valuation model
(83)
280
(2,575)
(15,438)
3,915
Other changes in fair value
-
-
-
(1)
-
Fair value, end of period
$ 47,571
$ 44,944
$ 40,821
$ 42,243
$ 57,109
MORTGAGE BANKING REVENUE:
Production revenue:
Origination
$ 18,561
$ 23,632
$ 30,194
$ 17,906
$ 4,326
Servicing
5,254
6,233
4,880
5,153
4,935
Payoffs/Paydowns
(3,898)
(3,198)
(3,144)
(2,506)
(2,323)
Total production revenue
19,917
26,667
31,930
20,553
6,938
Market value adjustment on MSR
(83)
280
(2,575)
(15,438)
3,915
Market value adjustment on MSR Hedge
295
150
202
4,355
(751)
Total mortgage banking revenue
$ 20,129
$ 27,097
$ 29,557
$ 9,470
$ 10,102
Mortgage loans serviced
$ 7,330,293
$ 7,218,090
$ 7,000,425
$ 6,999,383
$ 6,898,195
MSR/mtg loans serviced
0.65%
0.62%
0.58%
0.60%
0.83%
AVAILABLE-FOR-SALE SECURITIES, at fair value
U.S. Government agencies
2,871,408
$ 3,116,458
$ 3,348,206
$ 3,532,905
$ 3,599,317
U.S. Government agency issued residential
mortgage-back securities
2,421,409
1,625,325
699,864
132,902
133,375
U.S. Government agency issued commercial
mortgage-back securities
806,206
758,116
759,980
595,885
609,009
Obligations of states and political subdivisions
113,953
141,896
163,121
206,648
140,273
Corporate bonds
18,030
17,990
2,000
-
-
Total available-for-sale securities
$ 6,231,006
$ 5,659,785
$ 4,973,171
$ 4,468,340
$ 4,481,974
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 tangible equity, return on tangible common equity, operating return on tangible equity-excluding MSR, operating return on 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, 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
Year Ended
12/31/2020
9/30/2020
6/30/2020
3/31/2020
12/31/2019
12/31/2020
12/31/2019
Net income
$ 68,805
$ 73,825
$ 61,160
$ 24,261
$ 65,849
$ 228,051
$ 234,261
Plus:
Merger expense, net of tax
159
97
383
3,372
4,339
4,011
10,411
Initial provision for acquired loans,
net of tax
-
-
-
751
-
751
-
Pension settlement expense, net of tax
4,388
-
-
-
-
4,388
-
Less:
Security gains(losses), net of tax
48
13
47
(64)
(30)
44
132
Net operating income
$ 73,304
$ 73,909
$ 61,496
$ 28,448
$ 70,218
$ 237,157
$ 244,540
Less:
Preferred dividends
2,372
2,372
2,372
2,372
-
9,488
-
Net operating income available to
common shareholders
$ 70,932
$ 71,537
$ 59,124
$ 26,076
$ 70,218
$ 227,669
$ 244,540
Net operating income
$ 73,304
$ 73,909
$ 61,496
$ 28,448
$ 70,218
$ 237,157
$ 244,540
Less:
MSR market value adjustment, net of tax
159
323
(1,781)
(8,318)
2,374
(9,617)
(10,894)
Net operating income-excluding MSR
$ 73,145
$ 73,586
$ 63,277
$ 36,766
$ 67,844
$ 246,774
$ 255,434
Less:
Preferred dividends
2,372
2,372
2,372
2,372
-
9,488
-
Net operating income available to common
shareholders-excluding MSR
$ 70,773
$ 71,214
$ 60,905
$ 34,394
$ 67,844
$ 237,286
$ 255,434
Reconciliation of Net Income to Pre-Tax Pre-Provision Net Revenue
Net income
$ 68,805
$ 73,825
$ 61,160
$ 24,261
$ 65,849
$ 228,051
$ 234,261
Plus:
Provision for credit losses
5,000
15,000
20,000
46,000
-
86,000
1,500
Merger expense
212
129
510
4,494
5,782
5,345
13,871
Pension settlement expense
5,846
-
-
-
-
5,846
-
Income tax expense
14,046
21,525
18,164
5,759
17,271
59,494
65,257
Less:
Security gains(losses)
63
18
62
(85)
(41)
58
174
MSR market value adjustment
212
430
(2,373)
(11,083)
3,164
(12,814)
(14,515)
Pre-tax pre-provision net revenue
$ 93,634
$ 110,031
$ 102,145
$ 91,682
$ 85,779
$ 397,492
$ 329,230
Reconciliation of Total Operating Expense to Total Noninterest Expense:
Total noninterest expense
$ 167,911
$ 155,505
$ 162,504
$ 168,006
$ 162,351
$ 653,926
$ 629,607
Less:
Merger expense
212
129
510
4,494
5,782
5,345
13,871
Pension settlement expense
5,846
-
-
-
-
5,846
-
Total operating expense
$ 161,853
$ 155,376
$ 161,994
$ 163,512
$ 156,569
$ 642,735
$ 615,736
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
12/31/2020
9/30/2020
6/30/2020
3/31/2020
12/31/2019
12/31/2020
12/31/2019
Tangible assets
Total assets
$ 24,081,194
$ 23,555,422
$ 23,236,176
$ 21,032,524
$ 21,052,576
$ 24,081,194
$ 21,052,576
Less:
Goodwill
851,612
847,531
847,984
848,242
825,679
851,612
825,679
Other identifiable intangible assets
55,899
54,757
56,989
59,345
60,008
55,899
60,008
Total tangible assets
$ 23,173,683
$ 22,653,134
$ 22,331,203
$ 20,124,937
$ 20,166,889
$ 23,173,683
$ 20,166,889
Less:
PPP loans
975,421
1,212,246
1,192,715
-
-
975,421
-
Total tangible assets-excluding PPP loans
$ 22,198,262
$ 21,440,888
$ 21,138,488
$ 20,124,937
$ 20,166,889
$ 22,198,262
$ 20,166,889
PERIOD END BALANCES:
Tangible shareholders' equity
Total shareholders' equity
$ 2,822,477
$ 2,782,539
$ 2,732,687
$ 2,681,904
$ 2,685,017
$ 2,822,477
$ 2,685,017
Less:
Goodwill
851,612
847,531
847,984
848,242
825,679
851,612
825,679
Other identifiable intangible assets
55,899
54,757
56,989
59,345
60,008
55,899
60,008
Total tangible shareholders' equity
$ 1,914,966
$ 1,880,251
$ 1,827,714
$ 1,774,317
$ 1,799,330
$ 1,914,966
$ 1,799,330
Less:
Preferred stock
166,993
166,993
166,993
166,993
167,021
166,993
167,021
Total tangible common shareholders' equity
$ 1,747,973
$ 1,713,258
$ 1,660,721
$ 1,607,324
$ 1,632,309
$ 1,747,973
$ 1,632,309
AVERAGE BALANCES:
Tangible shareholders' equity
Total shareholders' equity
$ 2,774,589
$ 2,729,870
$ 2,738,434
$ 2,658,699
$ 2,572,750
$ 2,725,545
$ 2,366,745
Less:
Goodwill
852,472
847,744
848,160
844,635
823,812
848,263
754,426
Other identifiable intangible assets
54,858
56,045
58,280
58,805
60,559
56,988
54,787
Total tangible shareholders' equity
$ 1,867,259
$ 1,826,081
$ 1,831,994
$ 1,755,259
$ 1,688,379
$ 1,820,294
$ 1,557,532
Less:
Preferred stock
166,993
166,993
166,993
167,021
74,717
167,000
18,833
Total tangible common shareholders' equity
$ 1,700,266
$ 1,659,088
$ 1,665,001
$ 1,588,238
$ 1,613,662
$ 1,653,294
$ 1,538,699
Total average assets
$ 23,660,503
$ 23,318,877
$ 22,707,686
$ 21,189,637
$ 20,243,023
$ 22,723,386
$ 19,027,644
Total shares of common stock outstanding
102,561,480
102,558,459
102,566,301
102,632,484
104,522,804
102,561,480
104,522,804
Average shares outstanding-diluted
102,817,409
102,839,749
102,827,225
104,733,897
105,144,032
103,304,570
101,810,640
Tangible shareholders' equity to tangible assets (1)
8.26%
8.30%
8.18%
8.82%
8.92%
8.26%
8.92%
Tangible shareholders' equity to tangible assets-excluding PPP loans (2)
8.63%
8.77%
8.65%
8.82%
8.92%
8.63%
8.92%
Tangible common shareholders' equity to tangible assets (3)
7.54%
7.56%
7.44%
7.99%
8.09%
7.54%
8.09%
Tangible common shareholders' equity to tangible assets-excluding PPP loans (4)
7.87%
7.99%
7.86%
7.99%
8.09%
7.87%
8.09%
Return on average tangible equity (5)
14.66%
16.08%
13.43%
5.56%
15.47%
12.53%
15.04%
Return on average tangible common equity (6)
15.54%
17.13%
14.20%
5.54%
16.19%
13.22%
15.22%
Operating return on average tangible equity-excluding MSR (7)
15.58%
16.03%
13.89%
8.42%
15.94%
13.56%
16.40%
Operating return on average tangible common equity-excluding MSR (8)
16.56%
17.08%
14.71%
8.71%
16.68%
14.35%
16.60%
Operating return on average assets-excluding MSR (9)
1.23%
1.26%
1.12%
0.70%
1.33%
1.09%
1.34%
Operating return on average shareholders' equity-excluding MSR (10)
10.49%
10.72%
9.29%
5.56%
10.46%
9.05%
10.79%
Operating return on average common shareholders' equity-excluding MSR (11)
10.80%
11.05%
9.53%
5.55%
10.78%
9.27%
10.88%
Pre-tax pre-provision net revenue to total average assets (12)
1.57%
1.88%
1.81%
1.74%
1.68%
1.75%
1.73%
Tangible book value per common share (13)
$ 17.04
$ 16.71
$ 16.19
$ 15.66
$ 15.62
$ 17.04
$ 15.62
Operating earnings per common share (14)
$ 0.69
$ 0.70
$ 0.57
$ 0.25
$ 0.67
$ 2.20
$ 2.40
Operating earnings per common share-excluding MSR (15)
$ 0.69
$ 0.69
$ 0.59
$ 0.33
$ 0.65
$ 2.30
$ 2.51
(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