BancorpSouth Announces Third Quarter 2021 Results
10/25/2021 - 04:45 PM
TUPELO, Miss. , Oct. 25, 2021 /PRNewswire/ -- BancorpSouth Bank (NYSE: BXS) (the Company) today announced financial results for the quarter ended September 30, 2021 .
Highlights for the third quarter of 2021 included:
Achieved quarterly net income available to common shareholders of $70.4 million , or $0.65 per diluted common share, and net operating income available to common shareholders – excluding MSR – of $73.3 million , or $0.68 per diluted common share. Generated $90.1 million in pre-tax pre-provision net revenue (PPNR), or 1.29 percent of average assets on an annualized basis. Generated organic total deposit and customer repo growth of $722.2 million for the quarter, or 12.2 percent on an annualized basis, and total organic net loan growth of approximately $121.6 million , or 3.3 percent on an annualized basis, excluding Paycheck Protection Program (PPP) activity. Fee income businesses continue to perform at a high level as mortgage origination volume totaled $788.9 million for the quarter while insurance commission revenue grew over 9 percent compared to the third quarter of 2020. Continued stability in credit quality metrics including net recoveries of $2.1 million for the quarter; recorded negative provision for credit losses of $7.0 million for the quarter. Repurchased 1,742,474 shares of outstanding common stock at a weighted average price of $28.69 per share. Maintained strong regulatory capital metrics; estimated total risk-based capital of 14.27 percent at September 30, 2021 compared to 14.50 percent at June 30, 2021 . Recorded a charge of $2.4 million in accordance with Accounting Standards Codification (ASC) 715 "Compensation – Retirement Benefits" to reflect the settlement accounting impact of elevated lump sum retirement payments that have occurred in 2021. Recently received shareholder and regulatory approval to complete merger with Cadence Bancorporation, the parent company of Cadence Bank N.A ., which is expected to close effective October 29, 2021 , and create an approximately $48 billion institution on a pro forma basis that will be the 6th largest bank headquartered in the Company's nine-state footprint. "Our third quarter financial results reflect many key successes despite certain continued industry headwinds, particularly related to the net interest margin dynamics," remarked Dan Rollins , Chairman and Chief Executive Officer. "While our back office and support teams have been focused on preparing for the closing and operational integration of the Cadence transaction, our customer facing teammates are continuing to generate growth. We reported deposit and customer repo growth of over $722 million for the quarter while net organic loan growth totaled approximately $122 million , which marks the second consecutive quarter of net organic loan growth. We are obviously pleased to see continued economic stability across our footprint as well as improved loan demand. We are also proud of the results reported by our fee income businesses. Our mortgage team generated $789 million in production volume for the quarter while our insurance commission revenue totaled $35.8 million , representing growth of just over nine percent compared to the third quarter of 2020."
"As we look at other highlights for the quarter, our credit quality metrics continue to remain very strong. We had a negative provision for credit losses of $7.0 million for the quarter, which was driven by net recoveries of $2.1 million for the quarter combined with stability in our other credit quality metrics. From a capital management standpoint, we were active in our share repurchase program as we repurchased approximately 1.7 million shares of common stock during the third quarter, which is the first activity in our repurchase program since prior to the pandemic. We still have approximately 4.3 million shares available for repurchase this year under our authorized repurchase plan."
Earnings Summary
The Company reported net income available to common shareholders of $70.4 million , or $0.65 per diluted common share, for the third quarter of 2021, compared with net income available to common shareholders of $71.5 million , or $0.69 per diluted common share, for the third quarter of 2020 and net income available to common shareholders of $73.2 million , or $0.69 per diluted common share, for the second quarter of 2021. The Company reported net operating income available to common shareholders – excluding MSR – of $73.3 million , or $0.68 per diluted common share, for the third quarter of 2021, compared with $71.2 million , or $0.69 per diluted common share, for the third quarter of 2020 and $90.6 million , or $0.86 per diluted common share, for the second quarter of 2021.
The Company reported PPNR of $90.1 million , or 1.29 percent of average assets on an annualized basis, for the third quarter of 2021 compared to $111.0 million , or 1.89 percent of average assets on an annualized basis, for the third quarter of 2020 and $119.9 million , or 1.80 percent of average assets on an annualized basis, for the second quarter of 2021.
Net Interest Revenue
Net interest revenue was $181.5 million for the third quarter of 2021, an increase of 3.2 percent from $175.9 million for the third quarter of 2020 and an increase of 0.7 percent from $180.2 million for the second quarter of 2021. The fully taxable equivalent net interest margin was 2.86 percent for the third quarter of 2021, compared with 3.31 percent for the third quarter of 2020 and 2.99 percent for the second quarter of 2021. Yields on net loans and leases were 4.46 percent for the third quarter of 2021, compared with 4.54 percent for the third quarter of 2020 and 4.43 percent for the second quarter of 2021, while yields on total interest earning assets were 3.15 percent for the third quarter of 2021, compared with 3.77 percent for the third quarter of 2020 and 3.31 percent for the second quarter of 2021.
The net interest margin, excluding accretable yield, was 2.81 percent for the third quarter of 2021, compared with 3.23 percent for the third quarter of 2020 and 2.94 percent for the second quarter of 2021, while yields on net loans and leases, excluding accretable yield, were 4.38 percent for the third quarter of 2021, compared with 4.44 percent for the third quarter of 2020 and 4.35 percent for the second quarter of 2021. Net interest income for the third quarter of 2021 included approximately $1.0 million of accelerated PPP fee income recognition resulting from the payoff of loans that were forgiven by the Small Business Administration (SBA) during the quarter. The average cost of deposits was 0.24 percent for the third quarter of 2021, compared with 0.44 percent for the third quarter of 2020 and 0.27 percent for the second quarter of 2021.
Balance Sheet Activity
Loans and leases, net of unearned income, decreased $12.8 million during the third quarter of 2021 while deposits and customer repos increased $722.2 million . Forgiveness payments were received on PPP loans during the quarter totaling approximately $135.0 million . Excluding the impact of PPP activity, total organic loan growth totaled approximately $121.6 million , or 3.3 percent annualized compared to June 30 , 2021. There were no acquisitions closed during the third quarter of 2021.
Provision for Credit Losses and Allowance for Credit Losses
Earnings for the third quarter of 2021 reflect a negative provision for credit losses of $7.0 million , compared with a provision for credit losses of $16.0 million for the third quarter of 2020 and a provision for credit losses of $11.5 million for the second quarter of 2021. The negative provision for credit losses recorded during the third quarter of 2021 is primarily attributed to improvement in overall credit quality and a reduction in the level of classified loan balances. Net recoveries for the third quarter of 2021 were $2.1 million , or 0.05 percent of net loans and leases on an annualized basis, compared with net charge-offs of $1.4 million for the third quarter of 2020 and net recoveries of $1.8 million for the second quarter of 2021. The allowance for credit losses was $260.3 million , or 1.74 percent of net loans and leases, at September 30, 2021 , compared with $250.6 million , or 1.64 percent of net loans and leases, at September 30, 2020 , and $265.7 million , or 1.77 percent of net loans and leases, at June 30 , 2021. The allowance for credit losses coverage, excluding the impact of PPP loans, was 1.74 percent of net loans and leases at September 30, 2021 , compared with 1.78 percent at September 30, 2020 and 1.79 percent at June 30 , 2021.
Total non-performing assets were $100.3 million , or 0.36 percent of total assets, at September 30, 2021 , compared with $157.3 million , or 0.67 percent of total assets, at September 30, 2020 , and $101.8 million , or 0.37 percent of total assets, at June 30 , 2021. Other real estate owned was $16.5 million at September 30, 2021 , compared with $6.4 million at September 30, 2020 and $17.3 million at June 30, 2021 .
Noninterest Revenue
Noninterest revenue was $84.4 million for the third quarter of 2021, compared with $89.9 million for the third quarter of 2020 and $101.9 million for the second quarter of 2021. These results include a positive mortgage servicing rights (MSR) valuation adjustment of $2.0 million for the third quarter of 2021, compared with a positive MSR valuation adjustment of $0.4 million for the third quarter of 2020 and a negative MSR valuation adjustment of $1.9 million for the second quarter of 2021. Valuation adjustments in the MSR asset are driven primarily by fluctuations in interest rates period over period.
Mortgage production and servicing revenue was $11.0 million for the third quarter of 2021, compared with $26.7 million for the third quarter of 2020 and $11.0 million for the second quarter of 2021. Mortgage origination volume for the third quarter of 2021 was $788.9 million , compared with $937.7 million for the third quarter of 2020 and $906.4 million for the second quarter of 2021. Home purchase money volume was $511.1 million for the third quarter of 2021, compared with $568.4 million for the third quarter of 2020 and $619.0 million for the second quarter of 2021. Of the total mortgage origination volume for the third quarter of 2021, $257.8 million was portfolio loans, compared with $218.0 million for the third quarter of 2020 and $344.1 million for the second quarter of 2021.
Credit card, debit card, and merchant fee revenue was $11.4 million for the third quarter of 2021, compared with $9.9 million for the third quarter of 2020 and $11.6 million for the second quarter of 2021. Deposit service charge revenue was $10.3 million for the third quarter of 2021, compared with $8.9 million for the third quarter of 2020 and $8.8 million for the second quarter of 2021. Wealth management revenue was $7.1 million for the third quarter of 2021, compared with $6.5 million for the third quarter of 2020 and $7.5 million for the second quarter of 2021. Insurance commission revenue was $35.8 million for the third quarter of 2021, compared with $32.8 million for the third quarter of 2020 and $36.1 million for the second quarter of 2021. Other noninterest revenue was $6.9 million for the third quarter of 2021, compared with $4.8 million for the third quarter of 2020 and $7.1 million for the second quarter of 2021. Additionally, second quarter 2021 results included a $21.6 million gain on the sale of PPP loans.
Noninterest Expense
Noninterest expense for the third quarter of 2021 was $179.9 million , compared with $154.5 million for the third quarter of 2020 and $174.0 million for the second quarter of 2021. Salaries and employee benefits expense was $113.0 million for the third quarter of 2021, compared with $104.2 million for the third quarter of 2020 and $108.2 million for the second quarter of 2021. Occupancy expense was $13.4 million for the third quarter of 2021, compared with $13.1 million for the third quarter of 2020 and $13.2 million for the second quarter of 2021. Other noninterest expense was $43.2 million for the third quarter of 2021, compared with $31.2 million for the third quarter of 2020 and $46.0 million for the second quarter of 2021. Merger-related expense, which is included as a component of other noninterest expense, was $3.4 million for the third quarter of 2021, compared with merger-related expense of $0.1 million for the third quarter of 2020 and $10.0 million for the second quarter of 2021. Noninterest expense for the third quarter of 2021 included a charge of $2.4 million in accordance with ASC 715 "Compensation – Retirement Benefits" to reflect the settlement accounting impact of elevated lump sum retirement pension payouts in 2021.
Capital Management
The Company's ratio of shareholders' equity to assets was 10.77 percent at September 30, 2021 , compared with 11.81 percent at September 30, 2020 and 11.12 percent at June 30 , 2021. The ratio of tangible common shareholders' equity to tangible assets was 6.82 percent at September 30, 2021 , compared with 7.56 percent at September 30, 2020 and 7.11 percent at June 30 , 2021.
During the third quarter of 2021, the Company repurchased 1,742,474 shares of its common stock at a weighted average price of $28.69 pursuant to its share repurchase program. The Company has 4,257,526 shares remaining on its current share repurchase authorization, which will expire on December 31 , 2021.
Estimated regulatory capital ratios at September 30, 2021 were calculated in accordance with the Basel III capital framework as well as the interagency final rule published on September 30, 2020 entitled "Revised Transition of the Current Expected Credit Losses Methodology for Allowances". The Company is a "well capitalized" bank, as defined by federal regulations, at September 30, 2021 , with Tier 1 risk-based capital of 11.63 percent and total risk-based capital of 14.27 percent, compared with required minimum levels of 8 percent and 10 percent, respectively, in order to qualify for "well capitalized" classification.
Summary
Rollins concluded, "As we move into the fourth quarter, our team is looking forward to the opportunity to finish the year strong. With PPP being mostly behind us, the renewed focus of our bankers on getting out and taking care of customers is evident in our loan and deposit growth success. The economies across our footprint are open and performing quite well with minimal lingering impact from the pandemic. Our mortgage team continues to produce at strong levels despite the expected headwinds on refinance activity while our insurance team is winning new customers and taking advantage of a firmer premium market. Finally, we recently received shareholder and regulatory approval to complete our merger with Cadence and we look forward to the opportunity to close the transaction before the end of this month. The optimism around our Company regarding the impact the transaction will have for our teammates, customers, communities, and shareholders is at an all-time high."
TRANSACTIONS
Cadence Bancorporation (NYSE: CADE)
On April 12, 2021 , the Company announced the signing of a definitive merger agreement (the Cadence Merger Agreement) with Cadence Bancorporation, the parent company of Cadence Bank N.A ., (collectively referred to as Cadence), pursuant to which Cadence will be merged with and into the Company (the Cadence Merger). Cadence operates 99 full-service banking offices in the southeast. As of September 30, 2021 , Cadence collectively reported total assets of $19.8 billion , total loans of $11.5 billion and total deposits of $17.1 billion . Under the terms of the Cadence Merger Agreement, each Cadence shareholder will receive 0.70 shares of the Company's common stock in exchange for each share of Cadence common stock they hold. In addition, Cadence will pay a one-time special dividend of $1.25 per share on October 28 , 2021. For more information regarding the Cadence Merger, see our Current Report on Form 8-K that was filed with the Federal Deposit Insurance Corporation (FDIC) on April 12 , 2021. The Cadence Merger Agreement has been unanimously approved by the Boards of Directors and shareholders of the Company and Cadence. The Company recently received all required regulatory approvals to complete the merger with Cadence. Subject to the satisfaction of all closing conditions, the Cadence Merger is expected to close effective October 29, 2021 , although the Company can provide no assurance that the Cadence Merger will close on that date. The target closing date of October 29, 2021 has been accelerated from the previously announced date of October 31 , 2021. The Company will begin trading on the NYSE under the ticker symbol CADE on that date.
FNS Bancshares, Inc.
On May 1, 2021 , the Company completed the merger with FNS Bancshares, Inc., the parent company of FNB Bank, (collectively referred to as FNS), pursuant to which FNS was merged with and into the Company. FNS operated 17 full-service banking offices in Alabama , Georgia and Tennessee. The merger expanded 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 May 1, 2021 , FNS collectively reported total assets of $826.6 million , total loans of $464.7 million and total deposits of $720.7 million . Under the terms of the definitive merger agreement, the Company issued 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 this transaction, see our Current Report on Form 8-K that was filed with the FDIC on May 3 , 2021. The purchase accounting for this transaction is considered provisional as management continues to identify and assess information regarding the nature of the acquired assets and liabilities and reviews the associated valuation assumptions and methodologies.
National United Bancshares, Inc.
On May 1, 2021 , the Company completed the merger with National United Bancshares, Inc., the parent company of National United, (collectively referred to as National United), pursuant to which National United was merged with and into the Company. National United operated 6 full-service banking offices in the Killeen -Temple, Texas ; Waco, Texas ; and Austin -Round Rock -Georgetown, Texas metropolitan statistical areas. As of May 1, 2021 , National United collectively reported total assets of $817.3 million , total loans of $434.6 million and total deposits of $742.9 million . Under the terms of the definitive merger agreement, the Company issued 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 this transaction, see our Current Report on Form 8-K that was filed with the FDIC on May 3 , 2021. The purchase accounting for this transaction is considered provisional as management continues to identify and assess information regarding the nature of the acquired assets and liabilities and reviews the associated valuation assumptions and methodologies.
Non-GAAP Measures and Ratios
This news release presents certain financial measures and ratios that are not calculated in accordance with U.S. generally accepted accounting principles (GAAP). A discussion regarding these non-GAAP measures and ratios, including reconciliations of non-GAAP measures to the most directly comparable GAAP measures and definitions for non-GAAP ratios, appears under the caption "Reconciliation of Non-GAAP Measures and Other Non-GAAP Ratio Definitions" beginning on page 24 of this news release.
Statement Regarding Impact of COVID-19 Pandemic
The Company prioritizes the health and safety of its teammates and customers, and it will continue to do so throughout the duration of the COVID-19 pandemic. At the same time, the Company remains focused on improving shareholder value, managing credit exposure, challenging expenses, enhancing the customer experience and supporting the communities it serves. Lastly, as a SBA Preferred Lender, the Company participated 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 (including any variant of the COVID-19 virus) on the Company's assets, business, cash flows, financial condition, liquidity, prospects and results of operations, including the information and discussions regarding negative pressure on its net interest margin and loan demand. Although the Company believes that the statements that pertain to future events, results and trends and their impact on the Company's business are reasonable at the present time, those statements are not historical facts and are based upon current assumptions, expectations, estimates and projections, many of which, by their nature, are beyond the Company's control. Accordingly, all discussions regarding future events, results and trends and their impact on the Company's business, even in the near term, are necessarily uncertain given the fluid and evolving nature of the pandemic.
If the health, logistical or economic effects of the pandemic worsen, or if the assumptions, expectations, estimates or projections that underlie the Company's statements regarding future effects or trends prove to be incorrect, then the Company's actual assets, business, cash flows, financial condition, liquidity, prospects and results of operations and the trading prices of its capital stock may be materially and adversely impacted in ways that the Company cannot reasonably forecast.
Accordingly, when reading this news release and the accompanying presentation and when listening to the earnings conference call, undue reliance should not be placed upon any statement pertaining to future events, results and trends and their impact on the Company's business in future periods.
Conference Call and Webcast
The Company will conduct a conference call to discuss its third quarter 2021 financial results on October 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 $28 billion in assets. BancorpSouth operates approximately 315 full service branch locations as well as additional mortgage, insurance, and loan production offices in Alabama , Arkansas , Florida , Georgia , Louisiana , Mississippi , Missouri , Tennessee and Texas , including an insurance location in Illinois. BancorpSouth is committed to a culture of respect, diversity, and inclusion in both its workplace and communities. To learn more, visit our Community Commitment page at www.bancorpsouth.com . Like us on Facebook; follow us on Twitter and Instagram: @MyBXS; or connect with us through LinkedIn.
Forward-Looking Statements
Certain statements made in this news release are not statements of historical fact and constitute "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and are subject to the safe harbor created thereby under the Private Securities Litigation Reform Act of 1995. These statements are often, but not always, made through the use of words or phrases such as "anticipate," "aspire," "assume," "believe," "budget," "contemplate," "continue," "could," "estimate," "expect," "forecast," "foresee," "goal," "hope," "indicate," "intend," "may," "might," "outlook," "plan," "project," "projection," "predict," "prospect," "potential," "roadmap," "seek," "should," "target," "will," and "would," or the negative versions of those words or other comparable words of a future or forward-looking nature. These forward-looking statements include, without limitation, discussions regarding general economic, interest rate, real estate market, competitive, employment, and credit market conditions, including the impact of the COVID-19 pandemic (including any variant of the COVID-19 virus) on the Company's business; the Company's: assets; business; cash flows; financial condition; liquidity; prospects; results of operations; deposit and customer repo growth; interest and fee-based revenue; capital resources; capital metrics; efficiency ratio; valuation of mortgage servicing rights; net income; net interest revenue; non-interest revenue; net interest margin; interest expense; non-interest expense; earnings per share; interest rate sensitivity; interest rate risk; balance sheet and liquidity management; off-balance sheet arrangements; fair value determinations; asset quality; credit quality; credit losses; provision and allowance for credit losses, impairments, charge-offs, recoveries and changes in loan volumes; investment securities portfolio yields and values; ability to manage the impact of pandemics, natural disasters and other force majeure events; adoption and use of critical accounting policies; adoption and implementation of new accounting standards and their effect on the Company's financial results and the Company's financial reporting; utilization of non-GAAP financial metrics; declaration and payment of dividends; ability to pay dividends or coupons on the Company's 5.5% Series A Non-Cumulative Perpetual Preferred Stock, par value $0.01 per share, or the 4.125% Fixed-to-Floating Rate Subordinated Notes due November 20, 2029 ; mortgage origination volume; mortgage servicing and production revenue; insurance commission revenue; implementation and execution of cost savings initiatives; ability to successfully litigate, resolve or otherwise dispense with threatened, pending, ongoing and future litigation and governmental, administrative and investigatory matters; ability to successfully complete pending or future acquisitions, dispositions and other strategic growth opportunities and initiatives; ability to successfully obtain regulatory approval for acquisitions and other growth initiatives; ability to successfully integrate and manage acquisitions; opportunities and efforts to grow market share; reputation; ability to compete with other financial institutions; ability to recruit and retain key employees and personnel; access to capital markets; availability of capital; investments in the securities of other financial institutions; and ability to operate the Company's regulatory compliance programs in accordance with applicable law.
Forward-looking statements are based upon management's expectations as well as certain assumptions and estimates made by, and information available to, the Company's management at the time such statements were made. Forward-looking statements are not historical facts, are not guarantees of future results or performance and are subject to certain known and unknown risks, uncertainties and other factors that are beyond the Company's control and that may cause actual results to differ materially from those expressed in, or implied by, such forward-looking statements. These risks, uncertainties and other factors include, without limitation, potential delays or other problems in implementing and executing the Company's growth, expansion and acquisition strategies, including delays in obtaining regulatory or other necessary approvals or the failure to realize any anticipated benefits or synergies from any acquisitions or growth strategies; the risks of changes in interest rates and their effects on the level and composition of deposits, loan demand and the values of loan collateral, securities and interest sensitive assets and liabilities; the failure of assumptions underlying the establishment of reserves for possible credit losses, fair value for loans and other real estate owned; changes in real estate values; the availability of and access to capital; possible downgrades in the Company's credit ratings or outlook which could increase the costs or availability of funding from capital markets; the ability to attract new or retain existing deposits or to retain or grow loans; the ability to grow additional interest and fee income or to control noninterest expense; the potential impact of the proposed phase-out of the London Interbank Offered Rate ("LIBOR") or other changes involving LIBOR; competitive factors and pricing pressures, including their effect on the Company's net interest margin; general economic, unemployment, credit market and real estate market conditions, and the effect of such conditions on the creditworthiness of borrowers, collateral values, the value of investment securities and asset recovery values; changes in legal, financial and/or regulatory requirements; recently enacted and potential legislation and regulatory actions and the costs and expenses to comply with new and/or existing legislation and regulatory actions, including those actions in response to the COVID-19 pandemic such as the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"), the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (the "Economic Aid Act") and any related rules and regulations; changes in U.S. Government monetary and fiscal policy; FDIC special assessments or changes to regular assessments; the enforcement efforts of federal and state bank regulators; possible adverse rulings, judgments, settlements and other outcomes of pending, ongoing and future litigation and governmental, administrative and investigatory matters (including litigation or actions arising from the Company's participation in and administration of programs related to the COVID-19 pandemic (including, among other things, the PPP loan programs authorized by the CARES Act and the Economic Aid Act); the ability to keep pace with technological changes, including changes regarding maintaining cybersecurity; the impact of failure in, or breach of, the Company's operational or security systems or infrastructure, or those of third parties with whom the Company does business, including as a result of cyber-attacks or an increase in the incidence or severity of fraud, illegal payments, security breaches or other illegal acts impacting the Company or the Company's customers; natural disasters or acts of war or terrorism; the adverse effects of the ongoing global COVID-19 pandemic, including the magnitude and duration of the pandemic, and the effect of actions taken to mitigate the impact of the COVID-19 pandemic on the Company, the Company's employees, the Company's customers, the global economy and the financial markets; international or political instability; impairment of the Company's goodwill or other intangible assets; losses of key employees and personnel; adoption of new accounting standards, including the effects from the adoption of the current expected credit loss methodology on January 1, 2020 , or changes in existing standards; the occurrence of any event, change or other circumstances that could give rise to the right of one or both of the parties to terminate the Cadence Merger Agreement; the outcome of any legal proceedings that have been or may be instituted against the Company or Cadence in respect of the Cadence Merger; the possibility that the Cadence Merger will not close when expected or at all because required approvals are not received or other conditions to the closing are not satisfied on a timely basis or at all, or are obtained subject to conditions that are not anticipated; the ability of the Company and Cadence to meet expectations regarding the timing, completion and accounting and tax treatments of the Cadence Merger; the risk that any announcements relating to the Cadence Merger could have adverse effects on the market price of the common stock of either or both parties to the Cadence Merger; the possibility that the anticipated benefits of the Cadence Merger will not be realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors in the areas where the Company and Cadence do business; certain restrictions during the pendency of the Cadence Merger that may impact the parties' ability to pursue certain business opportunities or strategic transactions; the possibility that the Cadence Merger may be more expensive to complete than anticipated, including as a result of unexpected factors or events; diversion of management's attention from ongoing business operations and opportunities; the possibility that the parties may be unable to achieve expected synergies and operating efficiencies in the Cadence Merger within the expected timeframes or at all and to successfully integrate Cadence's operations and those of the Company; such integration may be more difficult, time consuming or costly than expected; revenues following the Cadence Merger may be lower than expected; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the Cadence Merger; the Company and Cadence's success in executing their respective business plans and strategies and managing the risks involved in the foregoing; the dilution caused by the Company's issuance of additional shares of its capital stock in connection with the Cadence Merger and other factors as detailed from time to time in the Company's press and news releases, periodic and current reports and other filings the Company files with the FDIC.
The foregoing factors should not be construed as exhaustive and should be read in conjunction with those factors that are set forth from time to time in the Company's periodic and current reports filed with the FDIC, including those factors included in the Company's Annual Report on Form 10-K for the year ended December 31, 2020 under the heading "Item 1A. Risk Factors," in the Company's Quarterly Reports on Form 10-Q under the heading "Part II-Item 1A. Risk Factors" and in the Company's Current Reports on Form 8-K.
Although the Company believes that the expectations reflected in these forward-looking statements are reasonable as of the date of this news release, if one or more events related to these or other risks or uncertainties materialize, or if the Company's underlying assumptions prove to be incorrect, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. Accordingly, undue reliance should not be placed on any forward-looking statements. The forward-looking statements speak only as of the date of this news release, and the Company does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by applicable law. New risks and uncertainties may emerge from time to time, and it is not possible for the Company to predict their occurrence or how they will affect the Company. All written or oral forward-looking statements attributable to the Company are expressly qualified in their entirety by this section.
BancorpSouth Bank
Selected Financial Information
(Dollars in thousands, except per share data)
(Unaudited)
Quarter Ended
Quarter Ended
Quarter Ended
Quarter Ended
Quarter Ended
Year to Date
Year to Date
9/30/2021
6/30/2021
3/31/2021
12/31/2020
9/30/2020
9/30/2021
9/30/2020
Earnings Summary:
Interest revenue
$ 199,511
$ 199,129
$ 192,783
$ 199,287
$ 200,670
$ 591,423
$ 600,206
Interest expense
17,967
18,947
19,994
22,351
24,739
56,908
86,175
Net interest revenue
181,544
180,182
172,789
176,936
175,931
534,515
514,031
Provision for credit losses
(7,000)
11,500
-
5,794
16,000
4,500
83,250
Net interest revenue, after provision
for credit losses
188,544
168,682
172,789
171,142
159,931
530,015
430,781
Noninterest revenue
84,420
101,943
87,936
78,826
89,924
274,299
257,678
Noninterest expense
179,889
173,984
155,823
167,117
154,505
509,696
483,765
Income before income taxes
93,075
96,641
104,902
82,851
95,350
294,618
204,694
Income tax expense
20,350
21,102
23,347
14,046
21,525
64,799
45,448
Net income
$ 72,725
$ 75,539
$ 81,555
$ 68,805
$ 73,825
$ 229,819
$ 159,246
Less: Preferred dividends
2,372
2,372
2,372
2,372
2,372
7,116
7,116
Net income available to common shareholders
$ 70,353
$ 73,167
$ 79,183
$ 66,433
$ 71,453
$ 222,703
$ 152,130
Balance Sheet - Period End Balances
Total assets
$ 28,060,496
$ 27,612,365
$ 25,802,497
$ 24,081,194
$ 23,555,422
$ 28,060,496
$ 23,555,422
Total earning assets
25,572,354
25,129,873
23,542,657
21,792,725
21,340,371
25,572,354
21,340,371
Total securities
10,053,372
9,084,111
7,640,268
6,231,006
5,659,785
10,053,372
5,659,785
Loans and leases, net of unearned income
14,991,245
15,004,039
15,038,808
15,022,479
15,327,735
14,991,245
15,327,735
Allowance for credit losses
260,276
265,720
241,117
244,422
250,624
260,276
250,624
Net book value of acquired loans (included in loans and leases above)
1,426,266
1,646,031
1,023,252
1,160,267
1,320,671
1,426,266
1,320,671
Paycheck protection program (PPP) loans (included in loans and leases above)
32,771
167,144
1,146,000
975,421
1,212,246
32,771
1,212,246
Remaining loan mark on acquired loans
9,863
13,037
10,069
13,886
16,198
9,863
16,198
Total deposits
23,538,711
22,838,486
21,173,186
19,846,441
19,412,979
23,538,711
19,412,979
Total deposits and securities sold under agreement to repurchase
24,243,834
23,521,621
21,833,671
20,484,156
20,024,434
24,243,834
20,024,434
Long-term debt
4,082
4,189
4,295
4,402
4,508
4,082
4,508
Junior subordinated debt securities
307,776
307,601
297,425
297,250
297,074
307,776
297,074
Total shareholders' equity
3,023,257
3,069,574
2,825,198
2,822,477
2,782,539
3,023,257
2,782,539
Common shareholders' equity
2,856,264
2,902,581
2,658,205
2,655,484
2,615,546
2,856,264
2,615,546
Balance Sheet - Average Balances
Total assets
$ 27,616,585
$ 26,666,296
$ 24,545,560
$ 23,660,503
$ 23,318,877
$ 26,287,396
$ 22,408,734
Total earning assets
25,220,602
24,211,759
22,346,075
21,497,938
21,241,896
23,936,675
20,320,121
Total securities
9,539,814
8,067,109
6,606,027
5,820,425
5,309,982
8,081,730
4,738,392
Loans and leases, net of unearned income
14,915,728
15,470,539
15,029,076
15,219,402
15,369,684
15,138,032
14,905,435
PPP loans (included in loans and leases above)
73,783
973,036
1,062,423
1,139,959
1,207,097
699,459
729,126
Total deposits
23,162,450
22,385,883
20,472,080
19,600,863
19,258,930
22,016,659
18,210,053
Total deposits and securities sold under agreement to repurchase
23,914,986
23,092,969
21,123,774
20,272,881
19,940,330
22,720,800
18,832,679
Long-term debt
4,168
4,714
4,378
4,488
4,592
4,419
4,697
Junior subordinated debt securities
307,671
304,056
297,318
297,145
296,969
303,053
296,794
Total shareholders' equity
3,058,307
2,954,834
2,813,001
2,774,589
2,729,870
2,942,946
2,709,077
Common shareholders' equity
2,891,314
2,787,841
2,646,008
2,607,596
2,562,877
2,775,952
2,542,075
Nonperforming Assets:
Non-accrual loans and leases
$ 59,622
$ 61,664
$ 73,142
$ 96,378
$ 122,108
$ 59,622
$ 122,108
Loans and leases 90+ days past due, still accruing
17,012
15,386
21,208
14,320
17,641
17,012
17,641
Restructured loans and leases, still accruing
7,165
7,368
6,971
10,475
11,154
7,165
11,154
Non-performing loans (NPLs)
83,799
84,418
101,321
121,173
150,903
83,799
150,903
Other real estate owned
16,515
17,333
9,351
11,395
6,397
16,515
6,397
Non-performing assets (NPAs)
$ 100,314
$ 101,751
$ 110,672
$ 132,568
$ 157,300
$ 100,314
$ 157,300
Financial Ratios and Other Data:
Return on average assets
1.04%
1.14%
1.35%
1.16%
1.26%
1.17%
0.95%
Operating return on average assets-excluding MSR*
1.09%
1.40%
1.28%
1.23%
1.26%
1.25%
1.03%
Return on average shareholders' equity
9.43%
10.25%
11.76%
9.87%
10.76%
10.44%
7.85%
Operating return on average shareholders' equity-excluding MSR*
9.82%
12.62%
11.13%
10.49%
10.72%
11.17%
8.56%
Return on average common shareholders' equity
9.65%
10.53%
12.14%
10.14%
11.09%
10.73%
7.99%
Operating return on average common shareholders' equity-excluding MSR*
10.06%
13.04%
11.47%
10.80%
11.05%
11.50%
8.75%
Return on average tangible equity*
14.10%
15.21%
17.35%
14.66%
16.08%
15.50%
11.79%
Operating return on average tangible equity-excluding MSR*
14.68%
18.73%
16.42%
15.58%
16.03%
16.59%
12.85%
Return on average tangible common equity*
14.85%
16.08%
18.46%
15.54%
17.13%
16.40%
12.41%
Operating return on average tangible common equity-excluding MSR*
15.48%
19.92%
17.44%
16.56%
17.08%
17.59%
13.58%
Pre-tax pre-provision net revenue to total average assets*
1.29%
1.80%
1.64%
1.59%
1.89%
1.57%
1.82%
Noninterest income to average assets
1.21%
1.53%
1.45%
1.33%
1.53%
1.40%
1.54%
Noninterest expense to average assets
2.58%
2.62%
2.57%
2.81%
2.64%
2.59%
2.88%
Net interest margin-fully taxable equivalent
2.86%
2.99%
3.15%
3.29%
3.31%
2.99%
3.39%
Net interest margin-fully taxable equivalent, excluding net accretion
on acquired loans and leases
2.81%
2.94%
3.08%
3.24%
3.23%
2.94%
3.33%
Net interest rate spread
2.72%
2.83%
2.97%
3.07%
3.06%
2.83%
3.12%
Efficiency ratio (tax equivalent)*
67.52%
61.55%
59.64%
65.16%
57.98%
62.90%
62.52%
Operating efficiency ratio-excluding MSR (tax equivalent)*
65.79%
57.66%
60.74%
62.87%
58.03%
61.31%
60.83%
Loan/deposit ratio
63.69%
65.70%
71.03%
75.69%
78.96%
63.69%
78.96%
Price to earnings multiple (close)
10.79
10.08
12.07
12.88
9.18
10.79
9.18
Market value to common book value
111.41%
106.01%
125.39%
105.98%
75.99%
111.41%
75.99%
Market value to common book value (avg)
104.34%
113.49%
119.10%
97.56%
83.75%
111.00%
90.07%
Market value to common tangible book value
172.40%
162.77%
190.14%
161.00%
116.01%
172.40%
116.01%
Market value to common tangible book value (avg)
161.46%
174.26%
180.60%
148.21%
127.86%
171.77%
137.50%
Employee FTE
4,770
4,835
4,546
4,596
4,691
4,770
4,691
*Denotes non-GAAP financial measure. Refer to related disclosure and reconciliation on pages 24 and 25.
BancorpSouth Bank
Selected Financial Information
(Dollars in thousands, except per share data)
(Unaudited)
Quarter Ended
Quarter Ended
Quarter Ended
Quarter Ended
Quarter Ended
Year to Date
Year to Date
9/30/2021
6/30/2021
3/31/2021
12/31/2020
9/30/2020
9/30/2021
9/30/2020
Credit Quality Ratios:
Net (recoveries)charge-offs to average loans and leases (annualized)
(0.05% )
(0.05% )
0.09%
0.29%
0.04%
0.00%
0.15%
Provision for credit losses to average loans and leases (annualized)
(0.19% )
0.30%
0.00%
0.15%
0.42%
0.04%
0.75%
Allowance for credit losses to net loans and leases
1.74%
1.77%
1.60%
1.63%
1.64%
1.74%
1.64%
Allowance for credit losses to net loans and leases, excluding PPP loans
1.74%
1.79%
1.74%
1.74%
1.78%
1.74%
1.78%
Allowance for credit losses to non-performing loans and leases
310.60%
314.77%
237.97%
201.71%
166.08%
310.60%
166.08%
Allowance for credit losses to non-performing assets
259.46%
261.15%
217.87%
184.37%
159.33%
259.46%
159.33%
Non-performing loans and leases to net loans and leases
0.56%
0.56%
0.67%
0.81%
0.98%
0.56%
0.98%
Non-performing loans and leases to net loans and leases, excluding
acquired loans and leases
0.50%
0.49%
0.54%
0.62%
0.74%
0.50%
0.74%
Non-performing assets to total assets
0.36%
0.37%
0.43%
0.55%
0.67%
0.36%
0.67%
Non-performing assets to total assets, excluding acquired loans and leases
0.31%
0.31%
0.34%
0.42%
0.49%
0.31%
0.49%
Equity Ratios:
Total shareholders' equity to total assets
10.77%
11.12%
10.95%
11.72%
11.81%
10.77%
11.81%
Total common shareholders' equity to total assets
10.18%
10.51%
10.30%
11.03%
11.10%
10.18%
11.10%
Tangible shareholders' equity to tangible assets*
7.44%
7.73%
7.71%
8.26%
8.30%
7.44%
8.30%
Tangible shareholders' equity to tangible assets-excluding PPP loans*
7.45%
7.78%
8.08%
8.63%
8.77%
7.45%
8.77%
Tangible common shareholders' equity to tangible assets*
6.82%
7.11%
7.04%
7.54%
7.56%
6.82%
7.56%
Tangible common shareholders' equity to tangible assets-excluding PPP loans*
6.83%
7.15%
7.38%
7.87%
7.99%
6.83%
7.99%
Capital Adequacy:
Common Equity Tier 1 capital
10.73%
10.89%
10.97%
10.74%
10.64%
10.73%
10.64%
Tier 1 capital
11.63%
11.80%
11.95%
11.74%
11.65%
11.63%
11.65%
Total capital
14.27%
14.50%
14.65%
14.48%
14.20%
14.27%
14.20%
Tier 1 leverage capital
8.13%
8.25%
8.59%
8.67%
8.59%
8.13%
8.59%
Estimated for current quarter
Common Share Data:
Basic earnings per share
$ 0.65
$ 0.69
$ 0.77
$ 0.65
$ 0.70
$ 2.11
$ 1.47
Diluted earnings per share
0.65
0.69
0.77
0.65
0.69
2.11
1.47
Operating earnings per share*
0.69
0.84
0.78
0.69
0.70
2.31
1.51
Operating earnings per share- excluding MSR*
0.68
0.86
0.73
0.69
0.69
2.26
1.61
Cash dividends per share
0.200
0.190
0.190
0.190
0.185
0.580
0.555
Book value per share
26.73
26.72
25.90
25.89
25.50
26.73
25.50
Tangible book value per share*
17.27
17.41
17.08
17.04
16.71
17.27
16.71
Market value per share (last)
29.78
28.33
32.48
27.44
19.38
29.78
19.38
Market value per share (high)
30.55
33.18
35.59
28.54
24.29
35.59
31.61
Market value per share (low)
24.87
27.59
26.95
18.77
18.11
24.87
17.21
Market value per share (avg)
27.89
30.33
30.85
25.26
21.36
29.67
22.97
Dividend payout ratio
30.71%
27.43%
24.62%
29.34%
26.56%
27.46%
37.64%
Total shares outstanding
106,853,316
108,614,595
102,624,818
102,561,480
102,558,459
106,853,316
102,558,459
Average shares outstanding - basic
108,028,577
105,626,612
102,622,111
102,569,547
102,564,466
105,425,767
103,174,106
Average shares outstanding - diluted
108,250,102
105,838,056
102,711,584
102,817,409
102,839,749
105,599,914
103,466,957
Yield/Rate:
(Taxable equivalent basis)
Loans, loans held for sale, and leases net of unearned income
4.46%
4.43%
4.53%
4.55%
4.54%
4.47%
4.70%
Loans, loans held for sale, and leases net of unearned income, excluding
net accretion on acquired loans and leases
4.38%
4.35%
4.43%
4.49%
4.44%
4.39%
4.62%
Loans, loans held for sale, and leases net of unearned income, excluding
net accretion on acquired loans and leases - excluding PPP loans
4.36%
4.39%
4.49%
4.53%
4.55%
4.42%
4.72%
PPP loans
8.79%
3.80%
3.69%
3.99%
3.11%
3.92%
2.84%
Available-for-sale securities:
Taxable
1.20%
1.21%
1.32%
1.53%
1.64%
1.24%
1.85%
Tax-exempt
2.88%
2.77%
3.52%
3.40%
3.67%
3.04%
3.97%
Short-term, FHLB and other equity investments
0.20%
0.16%
0.11%
0.13%
0.19%
0.16%
0.47%
Total interest earning assets and revenue
3.15%
3.31%
3.51%
3.70%
3.77%
3.31%
3.96%
Deposits
0.24%
0.27%
0.33%
0.38%
0.44%
0.28%
0.53%
Demand - interest bearing
0.31%
0.34%
0.40%
0.47%
0.53%
0.35%
0.66%
Savings
0.09%
0.09%
0.11%
0.15%
0.18%
0.10%
0.20%
Other time
0.91%
1.00%
1.14%
1.28%
1.41%
1.02%
1.53%
Total interest bearing deposits
0.36%
0.41%
0.48%
0.57%
0.65%
0.41%
0.77%
Short-term borrowings
0.10%
0.12%
0.13%
0.26%
0.25%
0.12%
0.63%
Total interest bearing deposits and short-term borrowings
0.35%
0.40%
0.46%
0.55%
0.63%
0.40%
0.76%
Junior subordinated debt
4.47%
4.47%
4.46%
4.05%
4.24%
4.46%
4.44%
Long-term debt
4.81%
4.46%
4.88%
4.84%
4.85%
4.71%
4.87%
Total interest bearing liabilities and expense
0.43%
0.47%
0.54%
0.63%
0.71%
0.48%
0.84%
Interest bearing liabilities to interest earning assets
66.04%
66.24%
66.87%
65.99%
65.61%
66.36%
67.58%
Net interest tax equivalent adjustment
$ 446
$ 550
$ 569
$ 709
$ 618
$ 1,564
$ 2,057
*Denotes non-GAAP financial measure. Refer to related disclosure and reconciliation on pages 24 and 25.
BancorpSouth Bank
Consolidated Balance Sheets
(Unaudited)
Sep-21
Jun-21
Mar-21
Dec-20
Sep-20
(Dollars in thousands)
Assets
Cash and due from banks
$ 301,246
$ 331,873
$ 263,289
$ 284,095
$ 306,164
Interest bearing deposits with other banks
and Federal funds sold
150,778
629,390
336,253
133,273
39,782
Available-for-sale securities, at fair value
10,053,372
9,084,111
7,640,268
6,231,006
5,659,785
Loans and leases*
15,011,588
15,023,228
15,056,559
15,039,239
15,344,006
Less: Unearned income
20,343
19,189
17,751
16,760
16,271
Allowance for credit losses
260,276
265,720
241,117
244,422
250,624
Net loans and leases
14,730,969
14,738,319
14,797,691
14,778,057
15,077,111
Loans held for sale
342,871
403,046
518,352
397,076
304,215
Premises and equipment, net
533,999
533,276
508,508
508,147
508,149
Accrued interest receivable
97,630
98,575
106,355
106,318
110,185
Goodwill
958,304
957,474
851,612
851,612
847,531
Other identifiable intangibles
52,235
54,659
53,581
55,899
54,757
Bank owned life insurance
359,740
355,660
335,707
333,264
331,799
Other real estate owned
16,515
17,333
9,351
11,395
6,397
Other assets
462,837
408,649
381,530
391,052
309,547
Total Assets
$ 28,060,496
$ 27,612,365
$ 25,802,497
$ 24,081,194
$ 23,555,422
Liabilities
Deposits:
Demand: Noninterest bearing
$ 7,700,216
$ 7,619,308
$ 6,990,880
$ 6,341,457
$ 6,336,792
Interest bearing
10,285,371
9,671,662
9,067,373
8,524,010
8,170,402
Savings
3,054,756
2,939,958
2,678,276
2,452,059
2,325,980
Other time
2,498,368
2,607,558
2,436,657
2,528,915
2,579,805
Total deposits
23,538,711
22,838,486
21,173,186
19,846,441
19,412,979
Securities sold under agreement to repurchase
705,123
683,135
660,485
637,715
611,455
Federal funds purchased
and other short-term borrowing
-
-
-
-
95,217
Accrued interest payable
11,334
8,718
11,879
10,885
15,286
Junior subordinated debt securities
307,776
307,601
297,425
297,250
297,074
Long-term debt
4,082
4,189
4,295
4,402
4,508
Other liabilities
470,213
700,662
830,029
462,024
336,364
Total Liabilities
25,037,239
24,542,791
22,977,299
21,258,717
20,772,883
Shareholders' Equity
Preferred stock
166,993
166,993
166,993
166,993
166,993
Common stock
267,133
271,536
256,562
256,404
256,396
Capital surplus
688,637
730,294
563,481
565,187
565,635
Accumulated other comprehensive (loss) income
(82,627)
(34,575)
(43,459)
11,923
18,490
Retained earnings
1,983,121
1,935,326
1,881,621
1,821,970
1,775,025
Total Shareholders' Equity
3,023,257
3,069,574
2,825,198
2,822,477
2,782,539
Total Liabilities & Shareholders' Equity
$ 28,060,496
$ 27,612,365
$ 25,802,497
$ 24,081,194
$ 23,555,422
*Includes $32.8 million , $167.1 million , $1.14 6 billion, $975.4 million and $1.21 2 billion in PPP loans at September 30, 2021, June 30, 2021, March 31, 2021, December 31, 2020 and September 30, 2020, respectively.
BancorpSouth Bank
Consolidated Average Balance Sheets
(Unaudited)
Sep-21
Jun-21
Mar-21
Dec-20
Sep-20
(Dollars in thousands)
Assets
Cash and due from banks
$ 288,199
$ 365,647
$ 261,519
$ 247,799
$ 232,421
Interest bearing deposits with other banks
and Federal funds sold
495,982
302,845
412,313
171,650
257,057
Available-for-sale securities, at fair value
9,539,814
8,067,109
6,606,027
5,820,425
5,309,982
Loans and leases*
14,935,392
15,488,980
15,045,837
15,235,827
15,386,721
Less: Unearned income
19,664
18,441
16,761
16,425
17,037
Allowance for credit losses
264,067
245,095
242,935
247,049
236,536
Net loans and leases
14,651,661
15,225,444
14,786,141
14,972,353
15,133,148
Loans held for sale
242,422
361,999
289,755
277,600
296,352
Premises and equipment, net
534,071
526,960
508,551
508,053
507,190
Accrued interest receivable
93,248
100,357
102,190
105,513
104,435
Goodwill
957,899
910,448
851,612
852,472
847,744
Other identifiable intangibles
53,567
52,564
54,876
54,858
56,045
Bank owned life insurance
357,429
348,378
333,837
332,543
330,642
Other real estate owned
16,939
12,293
11,043
14,872
7,754
Other assets
385,354
392,252
327,696
302,365
236,107
Total Assets
$ 27,616,585
$ 26,666,296
$ 24,545,560
$ 23,660,503
$ 23,318,877
Liabilities
Deposits:
Demand: Noninterest bearing
$ 7,579,513
$ 7,367,832
$ 6,484,703
$ 6,391,006
$ 6,340,942
Interest bearing
10,027,346
9,598,550
8,956,420
8,268,528
8,022,755
Savings
3,001,406
2,851,113
2,550,095
2,386,034
2,280,860
Other time
2,554,185
2,568,388
2,480,862
2,555,295
2,614,373
Total deposits
23,162,450
22,385,883
20,472,080
19,600,863
19,258,930
Securities sold under agreement to repurchase
752,536
707,086
651,694
672,018
681,400
Federal funds purchased
and other short-term borrowing
8,706
3,901
1,500
3,893
36,696
Accrued interest payable
10,801
11,169
11,607
14,175
15,589
Junior subordinated debt securities
307,671
304,056
297,318
297,145
296,969
Long-term debt
4,168
4,714
4,378
4,488
4,592
Other liabilities
311,946
294,653
293,982
293,332
294,831
Total Liabilities
24,558,278
23,711,462
21,732,559
20,885,914
20,589,007
Shareholders' Equity
Preferred stock
166,993
166,993
166,993
166,993
166,993
Common stock
270,098
266,676
256,536
256,422
256,412
Capital surplus
717,022
674,949
563,529
568,343
563,267
Accumulated other comprehensive (loss) income
(35,408)
(30,614)
(5,090)
12,432
24,758
Retained earnings
1,939,602
1,876,830
1,831,033
1,770,399
1,718,440
Total Shareholders' Equity
3,058,307
2,954,834
2,813,001
2,774,589
2,729,870
Total Liabilities & Shareholders' Equity
$ 27,616,585
$ 26,666,296
$ 24,545,560
$ 23,660,503
$ 23,318,877
*Includes $73.8 million , $973.0 million , $1.06 2 billion, $1.14 0 billion and $1.20 7 billion in PPP loans for the quarter ended September 30, 2021, June 30, 2021, March 31, 2021, December 31, 2020 and September 30, 2020, respectively.
Consolidated Condensed Statements of Income
(Dollars in thousands, except per share data)
(Unaudited)
Quarter Ended
Year to Date
Sep-21
Jun-21
Mar-21
Dec-20
Sep-20
Sep-21
Sep-20
INTEREST REVENUE:
Loans and leases
$ 168,066
$ 171,305
$ 169,195
$ 174,072
$ 175,810
$ 508,566
$ 525,993
Deposits with other banks
195
97
108
50
74
400
1,020
Federal funds sold, securities purchased
under agreement to resell, FHLB and
other equity investments
67
28
6
6
52
101
545
Available-for-sale securities:
Taxable
28,617
23,983
21,192
21,895
21,280
73,792
63,571
Tax-exempt
490
676
687
760
986
1,853
3,224
Loans held for sale
2,076
3,040
1,595
2,504
2,468
6,711
5,853
Total interest revenue
199,511
199,129
192,783
199,287
200,670
591,423
600,206
INTEREST EXPENSE:
Interest bearing demand
7,723
8,247
8,796
9,766
10,773
24,766
37,926
Savings
672
626
700
872
1,012
1,998
3,245
Other time
5,861
6,428
6,966
8,189
9,287
19,255
30,751
Federal funds purchased and securities sold
under agreement to repurchase
204
206
203
276
279
613
2,006
Short-term and long-term debt
42
44
45
47
49
131
2,383
Junior subordinated debt
3,463
3,387
3,269
3,201
3,338
10,119
9,862
Other
2
9
15
-
1
26
2
Total interest expense
17,967
18,947
19,994
22,351
24,739
56,908
86,175
Net interest revenue
181,544
180,182
172,789
176,936
175,931
534,515
514,031
Provision for credit losses
(7,000)
11,500
-
5,794
16,000
4,500
83,250
Net interest revenue, after provision for
credit losses
188,544
168,682
172,789
171,142
159,931
530,015
430,781
NONINTEREST REVENUE:
Mortgage banking
13,058
9,105
25,310
20,129
27,097
47,473
66,124
Credit card, debit card and merchant fees
11,428
11,589
9,659
10,053
9,938
32,676
28,194
Deposit service charges
10,324
8,849
8,477
9,708
8,892
27,650
28,221
Security (losses)gains, net
(195)
96
82
63
18
(17)
(5)
Insurance commissions
35,773
36,106
30,667
29,815
32,750
102,546
95,471
Wealth management
7,147
7,543
8,465
6,751
6,471
23,155
19,462
Gain on sale of PPP loans
-
21,572
-
-
-
21,572
-
Other
6,885
7,083
5,276
2,307
4,758
19,244
20,211
Total noninterest revenue
84,420
101,943
87,936
78,826
89,924
274,299
257,678
NONINTEREST EXPENSE:
Salaries and employee benefits
112,968
108,188
101,060
97,215
104,219
322,216
320,594
Occupancy, net of rental income
13,443
13,187
12,814
13,004
13,053
39,444
38,651
Equipment
5,534
4,967
4,564
4,756
4,519
15,065
13,930
Deposit insurance assessments
2,330
1,638
1,455
1,696
1,522
5,423
5,030
Pension settlement expense
2,400
-
-
5,846
-
2,400
-
Other
43,214
46,004
35,930
44,600
31,192
125,148
105,560
Total noninterest expense
179,889
173,984
155,823
167,117
154,505
509,696
483,765
Income before income taxes
93,075
96,641
104,902
82,851
95,350
294,618
204,694
Income tax expense
20,350
21,102
23,347
14,046
21,525
64,799
45,448
Net income
$ 72,725
$ 75,539
$ 81,555
$ 68,805
$ 73,825
$ 229,819
$ 159,246
Less: Preferred dividends
2,372
2,372
2,372
2,372
2,372
7,116
7,116
Net income available to common shareholders
$ 70,353
$ 73,167
$ 79,183
$ 66,433
$ 71,453
$ 222,703
$ 152,130
Net income per common share: Basic
$ 0.65
$ 0.69
$ 0.77
$ 0.65
$ 0.70
$ 2.11
$ 1.47
Diluted
$ 0.65
$ 0.69
$ 0.77
$ 0.65
$ 0.69
$ 2.11
$ 1.47
BancorpSouth Bank
Selected Loan Data
(Dollars in thousands)
(Unaudited)
Quarter Ended
Sep-21
Jun-21
Mar-21
Dec-20
Sep-20
LOAN AND LEASE PORTFOLIO:
Commercial and industrial
Commercial and industrial-non real estate
2,005,206
2,056,034
2,865,706
2,673,429
2,937,608
Commercial and industrial-owner occupied
2,241,310
2,273,433
2,260,456
2,281,127
2,297,008
Total commercial and industrial
4,246,516
4,329,467
5,126,162
4,954,556
5,234,616
Commercial real estate
Agricultural
370,467
350,067
337,710
317,994
333,839
Construction, acquisition and development
1,797,559
1,926,421
1,707,800
1,728,682
1,700,030
Commercial real estate
3,443,967
3,323,883
3,127,510
3,211,434
3,229,959
Total commercial real estate
5,611,993
5,600,371
5,173,020
5,258,110
5,263,828
Consumer
Consumer mortgages
4,078,787
3,991,790
3,700,076
3,726,241
3,704,490
Home equity
619,541
625,365
608,924
630,097
658,708
Credit cards
83,764
84,699
81,499
89,077
85,760
Total consumer
4,782,092
4,701,854
4,390,499
4,445,415
4,448,958
All other
350,644
372,347
349,127
364,398
380,333
Total loans
$ 14,991,245
$ 15,004,039
$ 15,038,808
$ 15,022,479
$ 15,327,735
ALLOWANCE FOR CREDIT LOSSES:
Balance, beginning of period
$ 265,720
$ 241,117
$ 244,422
$ 250,624
$ 237,025
Loans and leases charged-off:
Commercial and industrial
(1,488)
(1,882)
(2,946)
(5,511)
(1,001)
Commercial real estate
(131)
(623)
(1,383)
(5,062)
(738)
Consumer
(831)
(961)
(1,076)
(1,584)
(804)
All other
(863)
(396)
(501)
(875)
(599)
Total loans charged-off
(3,313)
(3,862)
(5,906)
(13,032)
(3,142)
Recoveries:
Commercial and industrial
3,635
3,053
1,093
816
457
Commercial real estate
797
1,299
195
142
267
Consumer
585
965
920
592
754
All other
352
345
393
280
263
Total recoveries
5,369
5,662
2,601
1,830
1,741
Net recoveries(charge-offs)
2,056
1,800
(3,305)
(11,202)
(1,401)
Initial allowance on loans purchased with credit deterioration
-
12,803
-
-
-
Provision:
Initial provision for loans acquired during the quarter
-
11,500
-
-
-
Provision for credit losses related to loans and leases
(7,500)
(1,500)
-
5,000
15,000
Total provision for loans and leases
(7,500)
10,000
-
5,000
15,000
Balance, end of period
$ 260,276
$ 265,720
$ 241,117
$ 244,422
$ 250,624
Average loans for period
$ 14,915,728
$ 15,470,539
$ 15,029,076
$ 15,219,402
$ 15,369,684
Ratio:
Net (recoveries)charge-offs to average loans (annualized)
(0.05% )
(0.05% )
0.09%
0.29%
0.04%
RESERVE FOR UNFUNDED COMMITMENTS*
Balance, beginning of period
$ 8,544
$ 7,044
$ 7,044
$ 6,250
$ 5,250
Provision for credit losses for unfunded commitments
500
1,500
-
794
1,000
Balance, end of period
$ 9,044
$ 8,544
$ 7,044
$ 7,044
$ 6,250
*The Reserve for Unfunded Commitments is classified in other liabilities on the balance sheet.
BancorpSouth Bank
Selected Loan Data
(Dollars in thousands)
(Unaudited)
Quarter Ended
Sep-21
Jun-21
Mar-21
Dec-20
Sep-20
BXS ORIGINATED LOANS AND LEASES:
Loans and leases charged off:
Commercial and industrial
Commercial and industrial-non real estate
$ (901)
$ (1,108)
$ (1,971)
$ (1,991)
$ (490)
Commercial and industrial-owner occupied
(331)
(471)
(187)
(303)
(434)
Total commercial and industrial
(1,232)
(1,579)
(2,158)
(2,294)
(924)
Commercial real estate
Agricultural
-
-
(94)
(124)
-
Construction, acquisition and development
-
(113)
(344)
(1,709)
-
Commercial real estate
(3)
(110)
(27)
(1,704)
(155)
Total real estate
(3)
(223)
(465)
(3,537)
(155)
Consumer
Consumer mortgages
(243)
(398)
(181)
(537)
(70)
Home equity
(112)
(64)
(50)
(395)
(41)
Credit cards
(435)
(476)
(733)
(458)
(682)
Total consumer
(790)
(938)
(964)
(1,390)
(793)
All other
(723)
(315)
(399)
(698)
(459)
Total loans charged off
(2,748)
(3,055)
(3,986)
(7,919)
(2,331)
Recoveries:
Commercial and industrial
Commercial and industrial-non real estate
305
1,014
387
645
231
Commercial and industrial-owner occupied
673
325
61
27
163
Total commercial and industrial
978
1,339
448
672
394
Commercial real estate
Agricultural
3
(65)
5
23
3
Construction, acquisition and development
87
1,184
51
73
55
Commercial real estate
19
(403)
36
45
208
Total real estate
109
716
92
141
266
Consumer
Consumer mortgages
200
359
392
221
350
Home equity
75
199
219
149
130
Credit cards
271
254
297
211
270
Total consumer
546
812
908
581
750
All other
310
287
325
249
235
Total recoveries
1,943
3,154
1,773
1,643
1,645
Net (charge-offs)/recoveries
$ (805)
$ 99
$ (2,213)
$ (6,276)
$ (686)
BancorpSouth Bank
Selected Loan Data
(Dollars in thousands)
(Unaudited)
Quarter Ended
Sep-21
Jun-21
Mar-21
Dec-20
Sep-20
ACQUIRED LOANS AND LEASES:
Loans and leases charged off:
Commercial and industrial
Commercial and industrial-non real estate
$ (255)
$ (303)
$ (298)
$ (2,352)
$ (70)
Commercial and industrial-owner occupied
(1)
-
(490)
(865)
(7)
Total commercial and industrial
(256)
(303)
(788)
(3,217)
(77)
Commercial real estate
Agricultural
-
-
(4)
(31)
-
Construction, acquisition and development
-
(12)
(463)
(64)
-
Commercial real estate
(128)
(388)
(451)
(1,430)
(583)
Total real estate
(128)
(400)
(918)
(1,525)
(583)
Consumer
Consumer mortgages
(21)
(23)
(112)
(194)
(11)
Home equity
(20)
-
-
-
-
Credit cards
-
-
-
-
-
Total consumer
(41)
(23)
(112)
(194)
(11)
All other
(140)
(81)
(102)
(177)
(140)
Total loans charged off
(565)
(807)
(1,920)
(5,113)
(811)
Recoveries:
Commercial and industrial
Commercial and industrial-non real estate
328
1,304
644
134
63
Commercial and industrial-owner occupied
2,329
410
1
10
-
Total commercial and industrial
2,657
1,714
645
144
63
Commercial real estate
Agricultural
148
73
81
1
-
Construction, acquisition and development
-
81
2
-
-
Commercial real estate
540
429
20
-
1
Total real estate
688
583
103
1
1
Consumer
Consumer mortgages
38
151
11
9
2
Home equity
1
2
1
2
2
Credit cards
-
-
-
-
-
Total consumer
39
153
12
11
4
All other
42
58
68
31
28
Total recoveries
3,426
2,508
828
187
96
Net recoveries/(charge-offs)
$ 2,861
$ 1,701
$ (1,092)
$ (4,926)
$ (715)
BancorpSouth Bank
Selected Loan Data
(Dollars in thousands)
(Unaudited)
Quarter Ended
Sep-21
Jun-21
Mar-21
Dec-20
Sep-20
NON-PERFORMING ASSETS
NON-PERFORMING LOANS AND LEASES:
Nonaccrual Loans and Leases
Commercial and industrial
Commercial and industrial-non real estate
$ 13,170
$ 10,485
$ 9,703
$ 12,768
$ 17,936
Commercial and industrial-owner occupied
11,382
11,872
15,019
15,783
18,343
Total commercial and industrial
24,552
22,357
24,722
28,551
36,279
Commercial real estate
Agricultural
2,356
1,284
2,293
5,013
5,907
Construction, acquisition and development
3,292
2,582
8,494
9,738
10,434
Commercial real estate
8,403
13,483
12,838
16,249
32,554
Total commercial real estate
14,051
17,349
23,625
31,000
48,895
Consumer
Consumer mortgages
20,035
20,532
23,535
32,951
32,872
Home equity
786
686
847
2,657
3,325
Credit cards
74
122
131
173
144
Total consumer
20,895
21,340
24,513
35,781
36,341
All other
124
618
282
1,046
593
Total nonaccrual loans and leases
$ 59,622
$ 61,664
$ 73,142
$ 96,378
$ 122,108
Loans and Leases 90+ Days Past Due, Still Accruing:
17,012
15,386
21,208
14,320
17,641
Restructured Loans and Leases, Still Accruing
7,165
7,368
6,971
10,475
11,154
Total non-performing loans and leases
$ 83,799
$ 84,418
$ 101,321
$ 121,173
$ 150,903
OTHER REAL ESTATE OWNED:
16,515
17,333
9,351
11,395
6,397
Total Non-performing Assets
$ 100,314
$ 101,751
$ 110,672
$ 132,568
$ 157,300
BXS originated assets
$ 83,420
$ 81,039
$ 85,266
$ 97,025
$ 109,418
Acquired assets
16,894
20,712
25,406
35,543
47,882
Total Non-performing Assets
$ 100,314
$ 101,751
$ 110,672
$ 132,568
$ 157,300
Additions to Nonaccrual Loans and Leases During the Quarter
$ 19,858
$ 16,005
$ 10,029
$ 11,087
$ 19,973
Loans and Leases 30-89 Days Past Due, Still Accruing:
BXS originated loans
$ 33,476
$ 36,748
$ 34,929
$ 40,424
$ 42,978
Acquired loans
7,452
10,701
2,798
6,048
5,694
Total Loans and Leases 30-89 days past due, still accruing
$ 40,928
$ 47,449
$ 37,727
$ 46,472
$ 48,672
BancorpSouth Bank
Selected Loan Data
(Dollars in thousands)
(Unaudited)
September 30, 2021
Purchased
Special
Credit
Pass
Mention
Substandard
Doubtful
Loss
Impaired
Deteriorated (Loss)
Total
LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE:
Commercial and industrial
Commercial and industrial-non real estate
$ 1,959,590
$ 1,691
$ 31,373
$ 161
$ -
$ 5,150
$ 7,241
$ 2,005,206
Commercial and industrial-owner occupied
2,178,251
-
50,892
-
-
9,582
2,585
2,241,310
Total commercial and industrial
4,137,841
1,691
82,265
161
-
14,732
9,826
4,246,516
Commercial real estate
Agricultural
363,182
-
4,982
-
-
-
2,303
370,467
Construction, acquisition and development
1,752,717
-
36,992
-
-
1,209
6,641
1,797,559
Commercial real estate
3,280,770
-
154,459
-
-
4,934
3,804
3,443,967
Total commercial real estate
5,396,669
-
196,433
-
-
6,143
12,748
5,611,993
Consumer
Consumer mortgages
4,013,294
-
63,495
-
-
1,817
181
4,078,787
Home equity
613,923
-
5,618
-
-
-
-
619,541
Credit cards
83,764
-
-
-
-
-
-
83,764
Total consumer
4,710,981
-
69,113
-
-
1,817
181
4,782,092
All other
341,464
-
9,118
-
-
-
62
350,644
Total loans
$ 14,586,955
$ 1,691
$ 356,929
$ 161
$ -
$ 22,692
$ 22,817
$ 14,991,245
BXS originated loans
$ 13,242,424
$ 947
$ 191,135
$ 161
$ -
$ 20,756
$ -
$ 13,455,423
Acquired loans*
1,344,531
744
165,794
-
-
1,936
22,817
1,535,822
Total Loans
$ 14,586,955
$ 1,691
$ 356,929
$ 161
$ -
$ 22,692
$ 22,817
$ 14,991,245
June 30, 2021
Purchased
Special
Credit
Pass
Mention
Substandard
Doubtful
Loss
Impaired
Deteriorated (Loss)
Total
LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE:
Commercial and industrial
Commercial and industrial-non real estate
$ 2,005,765
$ -
$ 40,286
$ 171
$ -
$ 1,885
$ 7,927
$ 2,056,034
Commercial and industrial-owner occupied
2,193,141
4,000
63,638
-
-
7,452
5,202
2,273,433
Total commercial and industrial
4,198,906
4,000
103,924
171
-
9,337
13,129
4,329,467
Commercial real estate
Agricultural
341,430
-
6,326
-
-
-
2,311
350,067
Construction, acquisition and development
1,879,040
-
40,498
-
-
714
6,169
1,926,421
Commercial real estate
3,150,789
-
159,066
-
-
9,316
4,712
3,323,883
Total commercial real estate
5,371,259
-
205,890
-
-
10,030
13,192
5,600,371
Consumer
Consumer mortgages
3,926,705
-
63,645
-
-
1,256
184
3,991,790
Home equity
619,269
-
6,096
-
-
-
-
625,365
Credit cards
84,699
-
-
-
-
-
-
84,699
Total consumer
4,630,673
-
69,741
-
-
1,256
184
4,701,854
All other
362,556
-
9,726
-
-
-
65
372,347
Total loans
$ 14,563,394
$ 4,000
$ 389,281
$ 171
$ -
$ 20,623
$ 26,570
$ 15,004,039
BXS originated loans
$ 13,007,886
$ 4,000
$ 219,242
$ 171
$ -
$ 13,989
$ -
$ 13,245,288
Acquired loans*
1,555,508
-
170,039
-
-
6,634
26,570
1,758,751
Total Loans
$ 14,563,394
$ 4,000
$ 389,281
$ 171
$ -
$ 20,623
$ 26,570
$ 15,004,039
*Includes certain loans that are no longer included in the "Net book value of acquired loans" on page 10 as a result of maturity, refinance, or other triggering event.
BancorpSouth Bank
Selected Loan Data
(Dollars in thousands)
(Unaudited)
Quarter Ended
Sep-21
Jun-21
Mar-21
Dec-20
Sep-20
LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE:
Pass
$ 14,586,955
$ 14,563,394
$ 14,646,582
$ 14,602,079
$ 14,877,943
Special Mention
1,691
4,000
5,005
8,736
-
Substandard
356,929
389,281
336,410
358,988
372,483
Doubtful
161
171
171
172
178
Loss
-
-
-
-
-
Impaired
22,692
20,623
28,615
29,545
49,818
Purchased Credit Deteriorated (Loss)
22,817
26,570
22,025
22,959
27,313
Total
$ 14,991,245
$ 15,004,039
$ 15,038,808
$ 15,022,479
$ 15,327,735
BXS ORIGINATED LOAN PORTFOLIO BY INTERNALLY
ASSIGNED GRADE:
Pass
$ 13,242,424
$ 13,007,886
$ 13,635,053
$ 13,459,529
$ 13,592,460
Special Mention
947
4,000
5,005
8,736
-
Substandard
191,135
219,242
252,140
259,682
252,875
Doubtful
161
171
171
172
178
Loss
-
-
-
-
-
Impaired
20,756
13,989
18,188
17,520
30,909
Purchased Credit Deteriorated (Loss)
-
-
-
-
-
Total
$ 13,455,423
$ 13,245,288
$ 13,910,557
$ 13,745,639
$ 13,876,422
ACQUIRED LOAN PORTFOLIO BY INTERNALLY
ASSIGNED GRADE:
Pass
$ 1,344,531
$ 1,555,508
$ 1,011,529
$ 1,142,550
$ 1,285,483
Special Mention
744
-
-
-
-
Substandard
165,794
170,039
84,270
99,306
119,608
Doubtful
-
-
-
-
-
Loss
-
-
-
-
-
Impaired
1,936
6,634
10,427
12,025
18,909
Purchased Credit Deteriorated (Loss)
22,817
26,570
22,025
22,959
27,313
Total
$ 1,535,822
$ 1,758,751
$ 1,128,251
$ 1,276,840
$ 1,451,313
BancorpSouth Bank
Geographical Information
(Dollars in thousands)
(Unaudited)
September 30, 2021
Alabama
Tennessee
and Florida
and
Panhandle
Arkansas
Louisiana
Mississippi
Missouri
Georgia
Texas
Other
Total
LOAN AND LEASE PORTFOLIO:
Commercial and industrial
Commercial and industrial-non real estate
$ 182,165
$ 147,774
$ 164,144
$ 358,266
$ 46,722
$ 119,220
$ 980,483
$ 6,432
$ 2,005,206
Commercial and industrial-owner occupied
296,901
150,397
212,613
568,629
64,155
125,754
822,219
642
2,241,310
Total commercial and industrial
479,066
298,171
376,757
926,895
110,877
244,974
1,802,702
7,074
4,246,516
Commercial real estate
Agricultural
31,474
66,918
19,761
68,667
7,740
12,433
161,840
1,634
370,467
Construction, acquisition and development
218,553
62,127
49,126
268,816
25,166
112,315
1,061,430
26
1,797,559
Commercial real estate
480,620
288,383
235,542
712,747
200,883
230,962
1,290,255
4,575
3,443,967
Total commercial real estate
730,647
417,428
304,429
1,050,230
233,789
355,710
2,513,525
6,235
5,611,993
Consumer
Consumer mortgages
718,510
323,108
344,606
799,621
117,138
366,822
1,371,961
37,021
4,078,787
Home equity
125,707
43,229
68,332
197,630
15,971
119,929
48,554
189
619,541
Credit cards
-
-
-
-
-
-
-
83,764
83,764
Total consumer
844,217
366,337
412,938
997,251
133,109
486,751
1,420,515
120,974
4,782,092
All other
60,220
27,091
31,581
118,815
1,391
20,895
89,544
1,107
350,644
Total loans
$ 2,114,150
$ 1,109,027
$ 1,125,705
$ 3,093,191
$ 479,166
$ 1,108,330
$ 5,826,286
$ 135,390
$ 14,991,245
Loan growth, excluding loans acquired during
the quarter (annualized)
(6.76% )
(9.79% )
(19.52% )
(15.13% )
(9.53% )
9.61%
15.15%
12.31%
(0.34% )
Loan growth, excluding PPP loans (annualized)
(3.90% )
(6.78% )
(14.13% )
(12.34% )
(5.13% )
17.14%
17.98%
28.99%
3.21%
NON-PERFORMING LOANS AND LEASES:
Commercial and industrial
Commercial and industrial-non real estate
$ 447
$ 721
$ 2,233
$ 4,090
$ 938
$ 314
$ 5,243
$ 187
$ 14,173
Commercial and industrial-owner occupied
361
554
923
1,986
161
-
9,023
-
13,008
Total commercial and industrial
808
1,275
3,156
6,076
1,099
314
14,266
187
27,181
Commercial real estate
Agricultural
63
218
-
1,521
-
-
612
-
2,414
Construction, acquisition and development
1,094
629
128
25
-
193
1,351
-
3,420
Commercial real estate
1,807
169
2,460
845
-
-
4,375
-
9,656
Total commercial real estate
2,964
1,016
2,588
2,391
-
193
6,338
-
15,490
Consumer
Consumer mortgages
8,955
4,071
3,234
9,961
1,204
3,349
5,752
2,197
38,723
Home equity
111
39
250
357
73
506
-
-
1,336
Credit cards
-
-
-
-
-
-
-
673
673
Total consumer
9,066
4,110
3,484
10,318
1,277
3,855
5,752
2,870
40,732
All other
47
2
43
151
-
6
141
6
396
Total loans
$ 12,885
$ 6,403
$ 9,271
$ 18,936
$ 2,376
$ 4,368
$ 26,497
$ 3,063
$ 83,799
NON-PERFORMING LOANS AND LEASES
AS A PERCENTAGE OF OUTSTANDING:
Commercial and industrial
Commercial and industrial-non real estate
0.25%
0.49%
1.36%
1.14%
2.01%
0.26%
0.53%
2.91%
0.71%
Commercial and industrial-owner occupied
0.12%
0.37%
0.43%
0.35%
0.25%
0.00%
1.10%
0.00%
0.58%
Total commercial and industrial
0.17%
0.43%
0.84%
0.66%
0.99%
0.13%
0.79%
2.64%
0.64%
Commercial real estate
Agricultural
0.20%
0.33%
0.00%
2.22%
0.00%
0.00%
0.38%
0.00%
0.65%
Construction, acquisition and development
0.50%
1.01%
0.26%
0.01%
0.00%
0.17%
0.13%
0.00%
0.19%
Commercial real estate
0.38%
0.06%
1.04%
0.12%
0.00%
0.00%
0.34%
0.00%
0.28%
Total commercial real estate
0.41%
0.24%
0.85%
0.23%
0.00%
0.05%
0.25%
0.00%
0.28%
Consumer
Consumer mortgages
1.25%
1.26%
0.94%
1.25%
1.03%
0.91%
0.42%
5.93%
0.95%
Home equity
0.09%
0.09%
0.37%
0.18%
0.46%
0.42%
0.00%
0.00%
0.22%
Credit cards
N/A
N/A
N/A
N/A
N/A
N/A
N/A
0.80%
0.80%
Total consumer
1.07%
1.12%
0.84%
1.03%
0.96%
0.79%
0.40%
2.37%
0.85%
All other
0.08%
0.01%
0.14%
0.13%
0.00%
0.03%
0.16%
0.54%
0.11%
Total loans
0.61%
0.58%
0.82%
0.61%
0.50%
0.39%
0.45%
2.26%
0.56%
BancorpSouth Bank
Noninterest Revenue and Expense
(Dollars in thousands)
(Unaudited)
Quarter Ended
Year to Date
Sep-21
Jun-21
Mar-21
Dec-20
Sep-20
Sep-21
Sep-20
NONINTEREST REVENUE:
Mortgage banking excl. MSR and MSR Hedge market value adj
$ 11,009
$ 11,013
$ 17,929
$ 19,917
$ 26,667
$ 39,951
$ 79,150
MSR and MSR Hedge market value adjustment
2,049
(1,908)
7,381
212
430
7,522
(13,026)
Credit card, debit card and merchant fees
11,428
11,589
9,659
10,053
9,938
32,676
28,194
Deposit service charges
10,324
8,849
8,477
9,708
8,892
27,650
28,221
Securities (losses)gains, net
(195)
96
82
63
18
(17)
(5)
Insurance commissions
35,773
36,106
30,667
29,815
32,750
102,546
95,471
Trust income
4,735
4,434
5,129
4,046
3,902
14,298
11,979
Annuity fees
50
50
51
53
53
151
162
Brokerage commissions and fees
2,362
3,059
3,285
2,652
2,516
8,706
7,321
Gain on sale of PPP loans
-
21,572
-
-
-
21,572
-
Bank-owned life insurance
4,217
1,845
2,020
2,425
1,902
8,082
5,756
Other miscellaneous income
2,668
5,238
3,256
(118)
2,856
11,162
14,455
Total noninterest revenue
$ 84,420
$ 101,943
$ 87,936
$ 78,826
$ 89,924
$ 274,299
$ 257,678
NONINTEREST EXPENSE:
Salaries and employee benefits
$ 112,968
$ 108,188
$ 101,060
$ 97,215
$ 104,219
$ 322,216
$ 320,594
Occupancy, net of rental income
13,443
13,187
12,814
13,004
13,053
39,444
38,651
Equipment
5,534
4,967
4,564
4,756
4,519
15,065
13,930
Deposit insurance assessments
2,330
1,638
1,455
1,696
1,522
5,423
5,030
Pension settlement expense
2,400
-
-
5,846
-
2,400
-
Advertising
988
783
1,004
899
826
2,775
2,843
Foreclosed property expense
2,189
649
1,021
2,122
(278)
3,859
1,952
Telecommunications
1,600
1,517
1,398
1,448
1,462
4,515
4,435
Public relations
1,166
1,012
741
897
1,130
2,919
2,269
Data processing
11,297
11,024
10,424
9,980
9,477
32,745
28,816
Computer software
5,502
4,887
5,113
5,301
4,779
15,502
14,073
Amortization of intangibles
2,424
2,401
2,318
2,499
2,357
7,143
7,106
Legal
814
774
1,166
1,474
(316)
2,754
1,957
Merger expense
3,442
9,962
1,649
212
129
15,053
5,133
Postage and shipping
1,414
1,317
1,547
1,418
1,199
4,278
3,838
Other miscellaneous expense
12,378
11,678
9,549
18,350
10,427
33,605
33,138
Total noninterest expense
$ 179,889
$ 173,984
$ 155,823
$ 167,117
$ 154,505
$ 509,696
$ 483,765
INSURANCE COMMISSIONS:
Property and casualty commissions
$ 26,413
$ 26,040
$ 21,949
$ 21,304
$ 24,060
$ 74,402
$ 68,950
Life and health commissions
6,543
7,130
6,494
5,915
6,072
20,167
19,018
Risk management income
676
611
613
829
609
1,900
1,681
Other
2,141
2,325
1,611
1,767
2,009
6,077
5,822
Total insurance commissions
$ 35,773
$ 36,106
$ 30,667
$ 29,815
$ 32,750
$ 102,546
$ 95,471
BancorpSouth Bank
Selected Additional Information
(Dollars in thousands)
(Unaudited)
Quarter Ended
Sep-21
Jun-21
Mar-21
Dec-20
Sep-20
MORTGAGE SERVICING RIGHTS:
Fair value, beginning of period
$ 60,615
$ 60,332
$ 47,571
$ 44,944
$ 40,821
Additions to mortgage servicing rights:
Originations of servicing assets
5,798
6,833
5,588
6,608
7,041
Changes in fair value:
Due to payoffs/paydowns
(3,919)
(2,946)
(3,273)
(3,898)
(3,198)
Due to change in valuation inputs or
assumptions used in the valuation model
2,190
(3,604)
10,446
(83)
280
Other changes in fair value
-
-
-
-
-
Fair value, end of period
$ 64,684
$ 60,615
$ 60,332
$ 47,571
$ 44,944
MORTGAGE BANKING REVENUE:
Production revenue:
Origination
$ 9,284
$ 8,646
$ 15,955
$ 18,561
$ 23,632
Servicing
5,644
5,313
5,247
5,254
6,233
Payoffs/Paydowns
(3,919)
(2,946)
(3,273)
(3,898)
(3,198)
Total production revenue
11,009
11,013
17,929
19,917
26,667
Market value adjustment on MSR
2,190
(3,604)
10,446
(83)
280
Market value adjustment on MSR Hedge
(141)
1,696
(3,065)
295
150
Total mortgage banking revenue
$ 13,058
$ 9,105
$ 25,310
$ 20,129
$ 27,097
Mortgage loans serviced
$ 7,455,113
$ 7,407,690
$ 7,259,808
$ 7,330,293
$ 7,218,090
MSR/mtg loans serviced
0.87%
0.82%
0.83%
0.65%
0.62%
AVAILABLE-FOR-SALE SECURITIES, at fair value
U.S. Government agencies
2,575,564
2,758,412
2,642,646
$ 2,871,408
$ 3,116,458
U.S. Government agency issued residential
mortgage-back securities
5,826,087
4,709,540
3,438,246
2,421,409
1,625,325
U.S. Government agency issued commercial
mortgage-back securities
1,518,556
1,478,058
1,414,345
806,206
758,116
Obligations of states and political subdivisions
112,152
117,248
126,589
113,953
141,896
Corporate bonds
21,013
20,853
18,442
18,030
17,990
Total available-for-sale securities
$ 10,053,372
$ 9,084,111
$ 7,640,268
$ 6,231,006
$ 5,659,785
BancorpSouth Bank Reconciliation of Non-GAAP Measures and Other Non-GAAP Ratio Definitions (Dollars in thousands, except per share amounts) (Unaudited)
Management evaluates the Company's capital position and operating performance by utilizing certain financial measures not calculated in accordance with U.S. Generally Accepted Accounting Principles (GAAP), including net operating income, net operating income available to common shareholders, net operating income-excluding MSR, net operating income available to common shareholders-excluding MSR, pre-tax pre-provision net revenue, total operating expense, tangible shareholders' equity to tangible assets, tangible shareholders' equity to tangible assets-excluding PPP loans, tangible common shareholders' equity to tangible assets, tangible common shareholders' equity to tangible assets-excluding PPP loans, return on average tangible equity, return on average tangible common equity, operating return on average tangible equity-excluding MSR, operating return on average tangible common equity-excluding MSR, operating return on average assets-excluding MSR, operating return on average shareholders' equity-excluding MSR, operating return on average common shareholders' equity-excluding MSR, pre-tax pre-provision net revenue to total average assets, average tangible book value per common share, operating earnings per common share, operating earnings per common share-excluding MSR, efficiency ratio (tax equivalent) and operating efficiency ratio-excluding MSR (tax equivalent). The Company has included these non-GAAP financial measures in this news release for the applicable periods presented. Management believes that the presentation of these non-GAAP financial measures (i) provides important supplemental information that contributes to a proper understanding of the Company's capital position and operating performance, (ii) enables a more complete understanding of factors and trends affecting the Company's business and (iii) allows investors to evaluate the Company's performance in a manner similar to management, the financial services industry, bank stock analysts and bank regulators. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are presented in the tables below. These non-GAAP financial measures should not be considered as substitutes for GAAP financial measures, and the Company strongly encourages investors to review the GAAP financial measures included in this news release and not to place undue reliance upon any single financial measure. In addition, because non-GAAP financial measures are not standardized, it may not be possible to compare the non-GAAP financial measures presented in this news release with other companies' non-GAAP financial measures having the same or similar names.
Reconciliation of Net Operating Income, Net Operating Income Available to Common Shareholders, Net Operating Income-Excluding MSR, and Net Operating Income Available to Common Shareholders-excluding MSR to Net Income:
Quarter ended
Year to Date
9/30/2021
6/30/2021
3/31/2021
12/31/2020
9/30/2020
9/30/2021
9/30/2020
Net income
$ 72,725
$ 75,539
$ 81,555
$ 68,805
$ 73,825
$ 229,819
$ 159,246
Plus:
Merger expense, net of tax
2,583
7,476
1,238
159
97
11,297
3,852
Initial provision for acquired loans,
net of tax
-
8,631
-
-
-
8,631
751
Pension settlement expense, net of tax
1,801
-
-
4,388
-
1,801
-
Less:
Security (losses)gains, net of tax
(147)
72
62
48
13
(13)
(4)
Net operating income
$ 77,256
$ 91,574
$ 82,731
$ 73,304
$ 73,909
$ 251,561
$ 163,853
Less:
Preferred dividends
2,372
2,372
2,372
2,372
2,372
7,116
7,116
Net operating income available to
common shareholders
$ 74,884
$ 89,202
$ 80,359
$ 70,932
$ 71,537
$ 244,445
$ 156,737
Net operating income
$ 77,256
$ 91,574
$ 82,731
$ 73,304
$ 73,909
$ 251,561
$ 163,853
Less:
MSR market value adjustment, net of tax
1,538
(1,432)
5,539
159
323
5,645
(9,776)
Net operating income-excluding MSR
$ 75,718
$ 93,006
$ 77,192
$ 73,145
$ 73,586
$ 245,916
$ 173,629
Less:
Preferred dividends
2,372
2,372
2,372
2,372
2,372
7,116
7,116
Net operating income available to common
shareholders-excluding MSR
$ 73,346
$ 90,634
$ 74,820
$ 70,773
$ 71,214
$ 238,800
$ 166,513
Reconciliation of Net Income to Pre-Tax Pre-Provision Net Revenue
Net income
$ 72,725
$ 75,539
$ 81,555
$ 68,805
$ 73,825
$ 229,819
$ 159,246
Plus:
Provision for credit losses
(7,000)
11,500
-
5,794
16,000
4,500
83,250
Merger expense
3,442
9,962
1,649
212
129
15,053
5,133
Pension settlement expense
2,400
-
-
5,846
-
2,400
-
Income tax expense
20,350
21,102
23,347
14,046
21,525
64,799
45,448
Less:
Security (losses)gains
(195)
96
82
63
18
(17)
(5)
MSR market value adjustment
2,049
(1,908)
7,381
212
430
7,522
(13,026)
Pre-tax pre-provision net revenue
$ 90,063
$ 119,915
$ 99,088
$ 94,428
$ 111,031
$ 309,066
$ 306,108
Reconciliation of Total Operating Expense to Total Noninterest Expense:
Total noninterest expense
$ 179,889
$ 173,984
$ 155,823
$ 167,117
$ 154,505
$ 509,696
$ 483,765
Less:
Merger expense
3,442
9,962
1,649
212
129
15,053
5,133
Pension settlement expense
2,400
-
-
5,846
-
2,400
-
Total operating expense
$ 174,047
$ 164,022
$ 154,174
$ 161,059
$ 154,376
$ 492,243
$ 478,632
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 to Date
9/30/2021
6/30/2021
3/31/2021
12/31/2020
9/30/2020
9/30/2021
9/30/2020
Tangible assets
Total assets
$ 28,060,496
$ 27,612,365
$ 25,802,497
$ 24,081,194
$ 23,555,422
$ 28,060,496
$ 23,555,422
Less:
Goodwill
958,304
957,474
851,612
851,612
847,531
958,304
847,531
Other identifiable intangible assets
52,235
54,659
53,581
55,899
54,757
52,235
54,757
Total tangible assets
$ 27,049,957
$ 26,600,232
$ 24,897,304
$ 23,173,683
$ 22,653,134
$ 27,049,957
$ 22,653,134
Less:
PPP loans
32,771
167,144
1,146,000
975,421
1,212,246
32,771
1,212,246
Total tangible assets-excluding PPP loans
$ 27,017,186
$ 26,433,088
$ 23,751,304
$ 22,198,262
$ 21,440,888
$ 27,017,186
$ 21,440,888
PERIOD END BALANCES:
Tangible shareholders' equity
Total shareholders' equity
$ 3,023,257
$ 3,069,574
$ 2,825,198
$ 2,822,477
$ 2,782,539
$ 3,023,257
$ 2,782,539
Less:
Goodwill
958,304
957,474
851,612
851,612
847,531
958,304
847,531
Other identifiable intangible assets
52,235
54,659
53,581
55,899
54,757
52,235
54,757
Total tangible shareholders' equity
$ 2,012,718
$ 2,057,441
$ 1,920,005
$ 1,914,966
$ 1,880,251
$ 2,012,718
$ 1,880,251
Less:
Preferred stock
166,993
166,993
166,993
166,993
166,993
166,993
166,993
Total tangible common shareholders' equity
$ 1,845,725
$ 1,890,448
$ 1,753,012
$ 1,747,973
$ 1,713,258
$ 1,845,725
$ 1,713,258
AVERAGE BALANCES:
Tangible shareholders' equity
Total shareholders' equity
$ 3,058,307
$ 2,954,834
$ 2,813,001
$ 2,774,589
$ 2,729,870
$ 2,942,946
$ 2,709,077
Less:
Goodwill
957,899
910,448
851,612
852,472
847,744
907,042
846,850
Other identifiable intangible assets
53,567
52,564
54,876
54,858
56,045
53,664
57,704
Total tangible shareholders' equity
$ 2,046,841
$ 1,991,822
$ 1,906,513
$ 1,867,259
$ 1,826,081
$ 1,982,240
$ 1,804,523
Less:
Preferred stock
166,993
166,993
166,993
166,993
166,993
166,993
167,002
Total tangible common shareholders' equity
$ 1,879,848
$ 1,824,829
$ 1,739,520
$ 1,700,266
$ 1,659,088
$ 1,815,247
$ 1,637,521
Total average assets
$ 27,616,585
$ 26,666,296
$ 24,545,560
$ 23,660,503
$ 23,318,877
$ 26,287,396
$ 22,408,734
Total shares of common stock outstanding
106,853,316
108,614,595
102,624,818
102,561,480
102,558,459
106,853,316
102,558,459
Average shares outstanding-diluted
108,250,102
105,838,056
102,711,584
102,817,409
102,839,749
105,599,914
103,466,957
Tangible shareholders' equity to tangible assets (1)
7.44%
7.73%
7.71%
8.26%
8.30%
7.44%
8.30%
Tangible shareholders' equity to tangible assets-excluding PPP loans (2)
7.45%
7.78%
8.08%
8.63%
8.77%
7.45%
8.77%
Tangible common shareholders' equity to tangible assets (3)
6.82%
7.11%
7.04%
7.54%
7.56%
6.82%
7.56%
Tangible common shareholders' equity to tangible assets-excluding PPP loans (4)
6.83%
7.15%
7.38%
7.87%
7.99%
6.83%
7.99%
Return on average tangible equity (5)
14.10%
15.21%
17.35%
14.66%
16.08%
15.50%
11.79%
Return on average tangible common equity (6)
14.85%
16.08%
18.46%
15.54%
17.13%
16.40%
12.41%
Operating return on average tangible equity-excluding MSR (7)
14.68%
18.73%
16.42%
15.58%
16.03%
16.59%
12.85%
Operating return on average tangible common equity-excluding MSR (8)
15.48%
19.92%
17.44%
16.56%
17.08%
17.59%
13.58%
Operating return on average assets-excluding MSR (9)
1.09%
1.40%
1.28%
1.23%
1.26%
1.25%
1.03%
Operating return on average shareholders' equity-excluding MSR (10)
9.82%
12.62%
11.13%
10.49%
10.72%
11.17%
8.56%
Operating return on average common shareholders' equity-excluding MSR (11)
10.06%
13.04%
11.47%
10.80%
11.05%
11.50%
8.75%
Pre-tax pre-provision net revenue to total average assets (12)
1.29%
1.80%
1.64%
1.59%
1.89%
1.57%
1.82%
Tangible book value per common share (13)
$ 17.27
$ 17.41
$ 17.08
$ 17.04
$ 16.71
$ 17.27
$ 16.71
Operating earnings per common share (14)
$ 0.69
$ 0.84
$ 0.78
$ 0.69
$ 0.70
$ 2.31
$ 1.51
Operating earnings per common share-excluding MSR (15)
$ 0.68
$ 0.86
$ 0.73
$ 0.69
$ 0.69
$ 2.26
$ 1.61
(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