BXS BancorpSouth Bank

BancorpSouth, Inc. Announces Earnings Per Diluted Share of $0.32 for the Fourth Quarter of 2004 TUPELO, Miss., Jan. 25 /PRNewswire-FirstCall/ -- BancorpSouth, Inc. (NYSE:BXS) today announced financial results for the fourth quarter and year ended December 31, 2004. Highlights of the fourth quarter included: -- The first sequential-quarter improvement in net interest margin in the last five quarters. -- The third consecutive comparable-quarter increase in loans net of unearned discount. -- A significant reduction in the provision for credit losses due to improved credit quality. -- An increase in the quarterly cash dividend from $0.18 to $0.19 per share. -- The completion of the acquisitions of Premier Bancorp, Inc., the holding company for Premier Bank of Brentwood, Tennessee, and Business Holding Corporation, the holding company for The Business Bank of Baton Rouge, Louisiana, enhancing BancorpSouth's presence in two of the South's most dynamic markets. Net income for the fourth quarter of 2004 was $24.6 million, or $0.32 per basic and diluted share. Included in the results for the fourth quarter of 2004 is a net negative impact of $0.01 per diluted share from a $305,000 reversal of a previously recorded charge for impairment of the Company's mortgage servicing asset and $1.5 million in net securities losses. Net income for the fourth quarter of 2003 was $28.9 million, or $0.37 per basic and diluted share. Included in the results for the fourth quarter of 2003 is a positive impact of $0.03 per diluted share from a $3.8 million reversal of previously recorded impairment charges against the Company's mortgage servicing asset and $40,000 in net securities gains. Net income for 2004 was $110.6 million, or $1.44 and $1.43 per basic and diluted share, respectively. Included in the results for 2004 is a net positive impact of $0.04 per diluted share from a $5.1 million reversal of previously recorded impairment charges against the Company's mortgage servicing asset and $661,000 in net securities losses. Net income for 2003 was $131.1 million, or $1.69 and $1.68 per basic and diluted share, respectively. Included in the results for 2003 is a positive impact of $0.15 per diluted share from a $5.7 million reversal of previously recorded impairment charges against the Company's mortgage servicing asset and $13.8 million in net securities gains. Aubrey Patterson, Chairman and Chief Executive Officer of BancorpSouth, commented, "BancorpSouth's financial performance for the fourth quarter and full year of 2004 reflected the challenges we faced during the year resulting from rising short-term interest rates, both in terms of managing our asset/liability mix and the expected significant reduction in mortgage originations. However, we were solidly profitable for the quarter and the year, and we completed 2004 encouraged by a number of emerging trends. "For instance, although we remain liability-sensitive to rising interest rates over the short-term, the sequential-quarter increase in net interest margin is a positive step toward reversing a steady decline in the net interest margin over nearly three years. In addition, an improving economic environment has driven double-digit loan growth in a number of our markets, such as South Mississippi, Little Rock, Nashville, Shreveport and Jackson, Tennessee, and contributed to an increased loan portfolio for four consecutive quarters. We also have continued to produce solid organic growth from our insurance operations, further validating our strategy to diversify our revenue. Finally, the completion of the acquisitions of Premier Bank of Brentwood and The Business Bank of Baton Rouge on the last day of 2004 positions us to leverage the substantial growth momentum evident in those markets." Net Interest Revenue Interest revenue for the fourth quarter of 2004 was $126.3 million, a slight increase from $126.2 million for the fourth quarter of 2003 and an increase of 1.4 percent from $124.5 million for the third quarter of 2004. Interest expense for the fourth quarter of 2004 was $42.6 million, a 6.1 percent increase from $40.1 million for the fourth quarter of 2003 and a 2.5 percent increase from $41.5 million for the third quarter of 2004. The average taxable equivalent yield on earning assets was 5.25 percent for the fourth quarter of 2004, a decline from 5.39 percent for the fourth quarter of 2003 and an increase from 5.17 percent for the third quarter of 2004. The average rate paid on interest bearing liabilities was 2.07 percent for the fourth quarter of 2004, compared with 1.99 percent for both the fourth quarter of 2003 and the third quarter of 2004. Net interest revenue was $83.7 million for the fourth quarter of 2004, a decrease of 2.8 percent from $86.1 million for the fourth quarter of 2003 and an increase of 0.9 percent from $83.0 million for the third quarter of 2004. Net interest margin declined to 3.51 percent for the fourth quarter of 2004 from 3.70 percent for the fourth quarter of 2003 and increased from 3.48 percent for the third quarter of 2004. Patterson said, "As is evident from the comparable-quarter increase in average rates paid on liabilities and decline in average taxable equivalent yield on assets, we expect that our liability sensitivity to increasing interest rates will continue to pressure net interest margin during 2005. However, the sequential-quarter improvement in net interest margin reflects our strong and effective focus on managing our mix of assets and liabilities through high quality, appropriately priced lending and careful pricing of liabilities." Deposit and Loan Activity Total assets increased 5.3 percent to $10.8 billion at December 31, 2004, from $10.3 billion at December 31, 2003. Total deposits rose 5.3 percent to $9.1 billion at December 31, 2004, from $8.6 billion at December 31, 2003. Loans, net of unearned discount, increased 9.7 percent to $6.8 billion at December 31, 2004, from $6.2 billion at December 31, 2003. "The comparability of the 2004 year-end balances is affected by the consummation of the two bank acquisitions on December 31, 2004," remarked Patterson. "Our organic growth in loans, net of unearned discount, for the fourth quarter was 5.2 percent from the fourth quarter of 2003 and our organic growth in deposits was 2.3 percent, with low interest rate demand deposits increasing 6.8 percent and savings and other time deposits declining 1.2 percent. We are pleased that our rate of comparable-quarter organic loan growth has now increased for three consecutive quarters, even as we have again demonstrated through our increased Nashville and Baton Rouge presence our ability to complement our organic growth through strategic acquisitions." Provision for Credit Losses and Allowance for Credit Losses The provision for credit losses decreased 31.7 percent to $5.1 million for the fourth quarter of 2004 from $7.5 million for the fourth quarter of 2003 and increased 44.6 percent from $3.5 million for the third quarter of 2004. Annualized net charge-offs were 0.32 percent of average loans for the fourth quarter of 2004, compared to 0.38 percent for fourth quarter of 2003 and 0.25 percent for the third quarter of 2004. Non-performing loans decreased 33.9 percent to $34.0 million, or 0.50 percent of loans, at December 31, 2004, from $51.4 million, or 0.83 percent of loans, at December 31, 2003, and decreased 7.3 percent from $36.7 million, or 0.56 percent of loans, at September 30, 2004. The allowance for credit losses was 1.34 percent of loans at December 31, 2004, compared with 1.48 percent of loans at December 31, 2003, and 1.38 percent of loans at September 30, 2004. Patterson added, "We are very pleased with the improvements in credit quality throughout 2004 and with our positioning for 2005. Because of significant improvements in our nonperforming loans, we completed 2004 with an increase in reserve coverage of nonperforming loans to a multiple of 2.7 from 1.8 at the end of 2003 and 2.5 at the end of the third quarter of 2004, despite comparable-quarter reductions in the provision for credit losses for each quarter of the year. This performance at a time of steadily improving loan demand is a tribute to both our commitment to a culture of strong credit quality and the outstanding performance of the BancorpSouth team in strengthening this culture on a daily basis." Noninterest Revenue Noninterest revenue was $43.7 million for the fourth quarter of 2004, a 9.0 percent decrease from $48.1 million for the fourth quarter of 2003 and a 3.3 percent increase from $42.3 million for the third quarter of 2004. As discussed above, these results include a $1.5 million net securities loss for the fourth quarter of 2004 compared with a $40,000 net securities gain for the fourth quarter of 2003. This loss primarily relates to an other-than- temporary non-cash, impairment charge for certain investments in Fannie Mae and Freddie Mac preferred stock. In addition, fourth quarter results reflect a reversal of a previously recorded charge for impairment of the Company's mortgage servicing asset related to a decline in mortgage interest rates of $305,000 for the fourth quarter of 2004 and $3.8 million for the fourth quarter of 2003. "The continued growth in our insurance commissions during the fourth quarter has demonstrated our efforts to reduce our interest-rate spread dependence by diversifying our revenue through noninterest revenue products and services," said Patterson. "We are pleased with the 9.0 percent organic growth in insurance commissions for the fourth quarter of 2004. This growth helped offset the impact of the anticipated decline in mortgage originations for the fourth quarter to $125.2 million from $140.6 million for the fourth quarter of 2003. As a result of rising mortgage interest rates during 2004, mortgage originations for the full year declined to $575.9 million compared with the record $1.2 billion originated for 2003." Noninterest Expense Noninterest expense was $87.9 million for the fourth quarter of 2004, a 3.7 percent increase from $84.8 million for the fourth quarter of 2003 and a 3.5 percent increase from $85.0 million for the third quarter of 2004. Rising salaries and employee benefits related to growth in insurance commissions and increased occupancy costs related to the opening of new branch offices accounted for much of the increase. Capital Management BancorpSouth repurchased 41,900 shares of its common stock during the fourth quarter of 2004 under a stock repurchase plan authorized in April 2003 for the repurchase of up to 3.9 million shares. A total of 2,047,008 shares had been purchased under this plan at the end of the fourth quarter of 2004. Combined with the 8.3 million shares repurchased under earlier plans, BancorpSouth had repurchased approximately 10.3 million shares of its common stock as of December 31, 2004. BancorpSouth will continue to evaluate additional share repurchases under the April 2003 plan, which authorizes these repurchases during a two-year period expiring April 30, 2005. Summary Patterson concluded, "Although we enter 2005 facing near-term challenges related to enhancing our net interest margin, we are confident of the continuing potential of the BancorpSouth business model to produce consistent long-term profitable growth. We remain firmly committed to the key elements of this business model, which include providing community bank-style service, backed by sophisticated products and infrastructure; diversifying our revenue and creating stronger customer relationships through the growth of noninterest revenue products and services; adhering to conservative lending and credit policies designed to build strong credit quality; expanding in targeted growth markets either within or contiguous to our existing six state franchise; and pursuing selective acquisitions to complement our organic growth strategies. In addition to building shareholder value through this business model, we have also consistently repurchased our stock under our repurchase authorizations over the last four years and, in October, we announced an increased level of cash dividends for the 21st consecutive year." Conference Call BancorpSouth will conduct a conference call with analysts at 1:30 p.m. (Central Time) on January 25, 2005. Investors may listen via the Internet by accessing BancorpSouth's website at http://www.bancorpsouth.com/. A replay of the conference call will be available at BancorpSouth's website for at least two weeks following the call. Forward-Looking Statements Certain statements contained in this news release may not be based on historical facts and are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements may be identified by their reference to a future period or periods or by the use of forward-looking terminology such as "anticipate," "believe," "estimate," "expect," "may," "might," "will," "would," "could" or "intend." These forward-looking statements may include, without limitation, statements relating to interest rates, loan demand, loan and deposit growth, insurance commissions, demand deposits, products and infrastructure, allowance for credit losses, net interest margin, customer relationships, credit quality, noninterest revenue, expansion of products and services, expansion of markets and entry into new markets through growth and acquisitions, the economic environment, common stock repurchase plan, competitive position, long-term growth prospects and future growth and profitability. We caution you not to place undue reliance on the forward-looking statements contained in this news release in that actual results could differ materially from those indicated in such forward-looking statements due to a variety of factors. These factors may include, but are not limited to, changes in economic conditions and government fiscal and monetary policies, fluctuations in prevailing interest rates and the ability of BancorpSouth to manage its assets and liabilities to limit exposure to changing interest rates, the ability of BancorpSouth to maintain credit quality, the ability of BancorpSouth to effectively integrate acquisitions, changes in laws and regulations affecting financial service companies in general, possible adverse rulings, judgments, settlements and other outcomes of pending litigation, the ability of BancorpSouth to compete with other financial services companies, the ability of BancorpSouth to provide and market competitive services and products, changes in BancorpSouth's operating or expansion strategy, the ability of BancorpSouth to diversify revenue, geographic concentration of BancorpSouth's assets, changes in growth potential in Baton Rouge, Louisiana and Brentwood, Tennessee markets, availability of and costs associated with obtaining adequate and timely sources of liquidity, the ability of BancorpSouth to manage its growth and effectively serve an expanding customer and market base, the ability of BancorpSouth to achieve profitable growth over the long-term, the ability of BancorpSouth to attract, train and retain qualified personnel, the ability of BancorpSouth to repurchase its common stock on favorable terms, the ability of BancorpSouth to identify and close potential acquisitions, changes in consumer preferences, other factors generally understood to affect the financial results of financial services companies, and other factors described from time to time in BancorpSouth's filings with the Securities and Exchange Commission. We undertake no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made. BancorpSouth, Inc. is a financial holding company headquartered in Tupelo, Mississippi with approximately $10.8 billion in assets. BancorpSouth Bank, a wholly-owned subsidiary of BancorpSouth, Inc., operates approximately 250 commercial banking, insurance, trust and broker/dealer locations in Alabama, Arkansas, Louisiana, Mississippi, Tennessee and Texas. BancorpSouth, Inc. Selected Financial Data Three Months Ended Twelve Months Ended December 31, December 31, 2004 2003 2004 2003 (Dollars in thousands, except per share amounts) Earnings Summary: Net interest revenue $83,668 $86,085 $333,792 $351,106 Provision for credit losses 5,104 7,472 17,485 25,130 Noninterest revenue 43,736 48,074 183,519 190,086 Noninterest expense 87,928 84,827 342,945 322,594 Income before income taxes 34,372 41,860 156,881 193,468 Income tax provision 9,778 12,990 46,261 62,334 Net income $24,594 $28,870 $110,620 $131,134 Earning per share: Basic $0.32 $0.37 $1.44 $1.69 Diluted: $0.32 $0.37 $1.43 $1.68 Balance sheet data at December 31: Total assets $10,848,193 $10,305,035 Total earning assets 9,944,432 9,466,037 Loans and lease receivables, net of unearned discount 6,836,698 6,233,067 Allowance for credit losses 91,673 92,112 Total deposits 9,059,091 8,599,128 Common shareholders' equity 916,428 868,906 Book value per share 11.74 11.15 Average balance sheet data: Total assets $10,569,902 $10,213,475 $10,555,133 $10,236,772 Total earning assets 9,744,155 9,471,363 9,750,548 9,517,008 Loans and lease receivables, net of unearned discount 6,527,002 6,200,368 6,387,656 6,276,805 Total deposits 8,851,405 8,495,008 8,816,520 8,533,115 Common shareholders' equity 879,434 859,823 873,264 845,899 Non-performing assets at December 31: Non-accrual loans $12,335 $18,139 Loans 90+ days past due 19,554 30,634 Restructured loans 2,122 2,659 Other real estate owned 14,741 14,952 Net charge-offs as a percentage of average loans (annualized) 0.32% 0.38% 0.31% 0.33% Performance ratios (annualized) Return on average assets 0.93% 1.12% 1.05% 1.28% Return on common equity 11.13% 13.32% 12.67% 15.50% Net interest margin 3.51% 3.70% 3.52% 3.80% Average shares outstanding - diluted 76,966,334 78,368,591 77,378,136 78,163,647 BancorpSouth, Inc. Consolidated Statement of Condition (Unaudited) December 31, % 2004 2003 Change (In thousands) Assets Cash and due from banks $315,849 $369,699 (14.57%) Interest bearing deposits with other banks 6,687 9,327 (28.30%) Held-to-maturity securities, at amortized cost 1,274,920 1,091,991 16.75% Available-for-sale securities, at fair value 1,681,729 1,989,690 (15.48%) Trading securities, at fair value 31,758 -- N/A Federal funds sold and securities purchased under agreement to resell 27,414 67,293 (59.26%) Loans 6,865,044 6,267,257 9.54% Less: Unearned discount (28,346) (34,190) (17.09%) Allowance for credit losses (91,673) (92,112) (0.48%) Net loans 6,745,025 6,140,955 9.84% Loans held for sale 85,225 74,669 14.14% Premises and equipment, net 228,524 212,216 7.68% Accrued interest receivable 66,471 75,914 (12.44%) Goodwill 109,719 59,671 83.87% Other assets 274,872 213,610 28.68% Total Assets $10,848,193 $10,305,035 5.27% Liabilities Deposits: Demand: Noninterest bearing $1,442,067 $1,286,607 12.08% Interest bearing 2,754,535 2,524,159 9.13% Savings 762,989 779,298 (2.09%) Other time 4,099,500 4,009,064 2.26% Total deposits 9,059,091 8,599,128 5.35% Federal funds purchased and securities sold under agreement to repurchase 455,908 437,014 4.32% Short term borrowings 12,500 -- N/A Accrued interest payable 17,939 17,140 4.66% Junior Subordinated Debt Securities 138,145 128,866 7.20% Long-term debt 141,094 138,498 1.87% Other liabilities 107,088 115,483 (7.27%) Total Liabilities 9,931,765 9,436,129 5.25% Shareholders' Equity Common stock 195,095 194,817 0.14% Capital surplus 81,122 43,344 87.16% Other comprehensive income (802) 14,298 (105.61%) Retained earnings 641,013 616,447 3.99% Total Shareholders' Equity 916,428 868,906 5.47% Total Liabilities & Shareholders' Equity $10,848,193 $10,305,035 5.27% BancorpSouth, Inc. Consolidated Statements of Income (Dollars in thousands, except per share data) (Unaudited) Quarter Ended Dec 2004 Sep 2004 Jun 2004 Mar 2004 Dec 2003 INTEREST REVENUE: Loans $ 96,666 $ 93,759 $ 91,358 $ 92,250 $ 94,822 Deposits with other banks 135 102 288 128 96 Federal funds sold and securities purchased under agreement to resell 272 111 115 697 772 Held-to-maturity securities: Taxable 10,812 12,020 12,791 10,112 9,831 Tax-exempt 1,621 1,693 1,694 1,796 1,860 Available-for-sale securities: Taxable 14,516 14,691 15,309 15,688 16,108 Tax-exempt 1,584 1,613 1,650 1,759 1,878 Loans held for sale 649 517 478 756 856 Total interest revenue 126,255 124,506 123,683 123,186 126,223 INTEREST EXPENSE: Deposits 36,103 35,198 33,915 33,918 33,929 Fed funds purchased and securities sold under agreement to repurchase 1,726 1,336 1,101 1,063 1,551 Other 4,758 5,014 4,983 4,723 4,658 Total interest expense 42,587 41,548 39,999 39,704 40,138 Net interest revenue 83,668 82,958 83,684 83,482 86,085 Provision for credit losses 5,104 3,530 4,835 4,015 7,472 Net interest revenue, after provision for credit losses 78,564 79,428 78,849 79,467 78,613 NONINTEREST REVENUE: Mortgage lending 2,041 (672) 11,365 (1,141) 6,441 Service charges 15,533 15,965 16,057 14,318 15,882 Life insurance premiums 328 397 478 562 657 Trust income 2,111 2,059 1,842 1,686 2,138 Security gains, net (1,484) 146 59 618 40 Insurance commissions 14,282 14,366 13,232 14,458 13,101 Other 10,925 10,066 8,383 15,539 9,815 Total noninterest revenue 43,736 42,327 51,416 46,040 48,074 NONINTEREST EXPENSES: Salaries and employee benefits 50,852 49,176 48,628 50,036 47,633 Occupancy, net of rental income 6,649 6,264 6,084 5,956 5,853 Equipment 5,329 5,390 5,636 5,460 5,569 Telecommunications 1,704 1,667 1,825 1,838 1,874 Other 23,394 22,483 21,858 22,716 23,898 Total noninterest expenses 87,928 84,980 84,031 86,006 84,827 Income before income taxes 34,372 36,775 46,234 39,501 41,860 Income tax expense 9,778 9,187 14,961 12,336 12,990 Net income $ 24,594 $ 27,588 $ 31,273 $ 27,165 $ 28,870 Net income per share: Basic $0.32 $0.36 $0.41 $0.35 $0.37 Diluted $0.32 $0.36 $0.40 $0.35 $0.37 Year To Date Dec 2004 Dec 2003 INTEREST REVENUE: Loans $ 374,033 $ 400,029 Deposits with other banks 653 347 Federal funds sold and securities purchased under agreement to resell 1,195 6,588 Held-to-maturity securities: Taxable 45,734 46,320 Tax-exempt 6,804 8,096 Available-for-sale securities: Taxable 60,204 54,426 Tax-exempt 6,605 7,871 Loans held for sale 2,401 3,234 Total interest revenue 497,629 526,911 INTEREST EXPENSE: Deposits 139,133 149,022 Fed funds purchased and securities sold under agreement to repurchase 5,226 8,114 Other 19,478 18,669 Total interest expense 163,837 175,805 Net interest revenue 333,792 351,106 Provision for credit losses 17,485 25,130 Net interest revenue, after provision for credit losses 316,307 325,976 NONINTEREST REVENUE: Mortgage lending 11,593 23,252 Service charges 61,873 61,899 Life insurance premiums 1,765 3,255 Trust income 7,698 7,214 Security gains, net (661) 13,837 Insurance commissions 56,338 39,749 Other 44,913 40,880 Total noninterest revenue 183,519 190,086 NONINTEREST EXPENSES: Salaries and employee benefits 198,692 181,810 Occupancy, net of rental income 24,953 22,973 Equipment 21,815 23,411 Telecommunications 7,033 7,477 Other 90,452 86,923 Total noninterest expenses 342,945 322,594 Income before income taxes 156,881 193,468 Income tax expense 46,261 62,334 Net income $ 110,620 $ 131,134 Net income per share: Basic $1.44 $1.69 Diluted $1.43 $1.68 BancorpSouth, Inc. Average Balances, Interest Income and Expense, and Average Yields and Rates (Dollars in thousands) (Unaudited) Quarter Ended December 31, 2004 Average Yield/ (Taxable equivalent basis) Balance Interest Rate ASSETS Loans net of unearned income $6,602,776 $97,859 5.90% Held-to-maturity securities: Taxable 1,209,803 10,812 3.56% Tax-exempt 141,927 2,494 6.99% Available-for-sale securities: Taxable 1,585,934 14,508 3.64% Tax-exempt 144,340 2,436 6.71% Short-term investments 59,375 408 2.80% Total interest earning assets and revenue 9,744,155 128,517 5.25% Other assets 915,620 Less: Allowance for credit losses (89,873) Total $10,569,902 LIABILITIES AND SHAREHOLDERS' EQUITY Deposits: Demand - interest bearing $2,660,417 $6,564 0.98% Savings 773,506 1,465 0.76% Other time 4,049,843 28,074 2.76% Short-term borrowings 448,600 1,836 1.63% Junior subordinated debt 128,866 2,626 8.11% Long-term debt 135,587 2,022 5.93% Total interest bearing liabilities and expense 8,196,819 42,587 2.07% Demand deposits - noninterest bearing 1,367,639 Other liabilities 126,010 Total liabilities 9,690,468 Shareholders' equity 879,434 Total $10,569,902 Net interest revenue $85,930 Net interest margin 3.51% Net interest rate spread 3.18% Interest bearing liabilities to interest earning assets 84.12% Net interest tax equivalent adjustment $2,261 BancorpSouth, Inc. Average Balances, Interest Income and Expense, and Average Yields and Rates (Dollars in thousands) (Unaudited) Quarter Ended December 31, 2003 Average Yield/ (Taxable equivalent basis) Balance Interest Rate ASSETS Loans net of unearned income $6,272,715 $96,018 6.07% Held-to-maturity securities: Taxable 889,669 9,831 4.38% Tax-exempt 154,458 2,861 7.35% Available-for-sale securities: Taxable 1,813,225 16,108 3.52% Tax-exempt 185,682 2,889 6.17% Short-term investments 155,614 868 2.21% Total interest earning assets and revenue 9,471,363 128,575 5.39% Other assets 833,404 Less: Allowance for credit losses (91,292) Total $10,213,475 LIABILITIES AND SHAREHOLDERS' EQUITY Deposits: Demand - interest bearing $2,477,156 $5,168 0.83% Savings 784,774 1,405 0.71% Other time 4,003,151 27,355 2.71% Short-term borrowings 472,366 1,592 1.34% Junior subordinated debt 125,042 2,547 8.15% Long-term debt 138,608 2,070 5.92% Total interest bearing liabilities and expense 8,001,097 40,137 1.99% Demand deposits - noninterest bearing 1,229,927 Other liabilities 122,628 Total liabilities 9,353,652 Shareholders' equity 859,823 Total $10,213,475 Net interest revenue $88,438 Net interest margin 3.70% Net interest rate spread 3.40% Interest bearing liabilities to interest earning assets 84.48% Net interest tax equivalent adjustment $2,353 BancorpSouth, Inc. Average Balances, Interest Income and Expense, and Average Yields and Rates (Dollars in thousands) (Unaudited) Year To Date December 31, 2004 Average Yield/ (Taxable equivalent basis) Balance Interest Rate ASSETS Loans net of unearned income $6,451,061 $378,546 5.87% Held-to-maturity securities: Taxable 1,213,525 45,735 3.77% Tax-exempt 146,103 10,466 7.16% Available-for-sale securities: Taxable 1,665,605 60,192 3.61% Tax-exempt 152,018 10,162 6.69% Short-term investments 122,236 1,849 1.51% Total interest earning assets and revenue 9,750,548 506,950 5.20% Other assets 895,873 Less: Allowance for credit losses (91,288) Total $10,555,133 LIABILITIES AND SHAREHOLDERS' EQUITY Deposits: Demand - interest bearing $2,673,026 $24,193 0.91% Savings 782,031 5,659 0.72% Other time 4,063,173 109,282 2.69% Short-term borrowings 479,129 6,003 1.25% Junior subordinated debt 128,866 10,503 8.15% Long-term debt 137,354 8,197 5.97% Total interest bearing liabilities and expense 8,263,579 163,837 1.98% Demand deposits - noninterest bearing 1,298,290 Other liabilities 120,000 Total liabilities 9,681,869 Shareholders' equity 873,264 Total $10,555,133 Net interest revenue $343,113 Net interest margin 3.52% Net interest rate spread 3.22% Interest bearing liabilities to interest earning assets 84.75% Net interest tax equivalent adjustment $9,321 BancorpSouth, Inc. Average Balances, Interest Income and Expense, and Average Yields and Rates (Dollars in thousands) (Unaudited) Year to Date December 31, 2003 Average Yield/ (Taxable equivalent basis) Balance Interest Rate ASSETS Loans net of unearned income $6,342,430 $404,734 6.38% Held-to-maturity securities: Taxable 1,130,833 46,319 4.10% Tax-exempt 164,762 12,455 7.56% Available-for-sale securities: Taxable 1,412,151 54,426 3.85% Tax-exempt 191,589 12,108 6.32% Short-term investments 275,243 6,935 2.52% Total interest earning assets and revenue 9,517,008 536,977 5.64% Other assets 810,463 Less: Allowance for credit losses (90,699) Total $10,236,772 LIABILITIES AND SHAREHOLDERS' EQUITY Deposits: Demand - interest bearing $2,478,188 $24,186 0.98% Savings 799,861 7,074 0.88% Other time 4,074,487 117,761 2.89% Short-term borrowings 475,391 8,290 1.74% Junior subordinated debt 125,011 10,188 8.15% Long-term debt 139,082 8,306 5.97% Total interest bearing liabilities and expense 8,092,020 175,805 2.17% Demand deposits - noninterest bearing 1,180,579 Other liabilities 118,274 Total liabilities 9,390,873 Shareholders' equity 845,899 Total $10,236,772 Net interest revenue $361,172 Net interest margin 3.80% Net interest rate spread 3.47% Interest bearing liabilities to interest earning assets 85.03% Net interest tax equivalent adjustment $10,066 DATASOURCE: BancorpSouth, Inc. CONTACT: L. Nash Allen, Jr., Treasurer and Chief Financial Officer, +1-662-680-2330, or Gary C. Bonds, Senior Vice President and Controller, +1-662-680-2332, both of BancorpSouth, Inc. Web site: http://www.bancorpsouth.com/

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