BancorpSouth, Inc. Announces Financial Results for the Second
Quarter of 2005 Significant Growth in Loans and Insurance Revenue
Highlight Continued Improvement in Key Trends TUPELO, Miss., July
21 /PRNewswire-FirstCall/ -- BancorpSouth, Inc. (NYSE:BXS) today
announced financial results for the second quarter and six-months
ended June 30, 2005. Highlights of the second quarter of 2005
included: - A 9.7 percent expansion in loans and leases, net of
unearned interest, at the end of the second quarter of 2005
compared with the end of the second quarter of 2004. - Growth of
9.0 percent in insurance commission revenue, supporting the recent
ranking of BancorpSouth's insurance brokerage operations as the
18th largest in the country among bank holding companies. -
Continuing improvement in key trends in BancorpSouth's traditional
banking business on both a comparable-quarter and sequential
quarter basis, including growth in net interest margin, interest
revenue and net interest revenue. - Further strengthening in credit
quality, with a 36.1 percent decline in nonperforming loans and
leases at the end of the quarter from the end of the second quarter
of 2004; a reduction in annualized net charge- offs to 0.26 percent
of average loans and leases, net of unearned interest, from 0.36
percent; and an increase in reserve coverage of nonperforming loans
and leases to 3.83 from 2.44. Net income was $25.8 million, or
$0.33 per diluted share, for the second quarter of 2005 compared
with net income of $31.3 million, or $0.40 per diluted share, for
the second quarter of 2004. As in previous quarters, BancorpSouth's
second quarter 2005 financial results were significantly affected
by impairment of the Company's mortgage servicing asset ("MSA").
For the quarter, a $3.9 million MSA impairment charge reduced
earnings by $0.03 per diluted share after tax. For the second
quarter of 2004, the reversal of previously recorded MSA impairment
charges totaled $9.4 million, or $0.07 per diluted share after tax.
Excluding the impact of MSA impairment, adjusted earnings for the
second quarter of 2005 would have been $28.2 million, or $0.36 per
diluted share, from adjusted earnings of $25.5 million, or $0.33
per diluted share, for the second quarter of 2004. Please see
tables below for reconciliation of earnings and earnings per
diluted share to adjusted earnings and adjusted earnings per
diluted share. "Despite the negative swing from a year ago in the
impairment of our mortgage servicing asset, we are pleased by the
direction of our fundamental results in the second quarter,"
commented Aubrey Patterson, Chairman and Chief Executive Officer of
BancorpSouth. "The moderate and steady improvement in the national
economic environment has been reflected in our markets through
continued growth in loan demand. As interest rates have increased,
and as we have funded loan growth primarily through the maturation
of lower rate investments and the growth in our lower cost demand
deposits, we have also benefited from an expansion in our net
interest margin. This ongoing recovery in our traditional banking
business continues to be complemented by growth from noninterest
revenue products and services, such as the significant growth
achieved in our insurance business. As a result, we believe
BancorpSouth is well positioned to leverage continued improvement
in the economic environment to achieve further growth in the second
half of 2005." Net Interest Revenue Interest revenue for the second
quarter of 2005 grew 10.0 percent, or $12.3 million, to $136.0
million from $123.7 million for the second quarter of 2004 and 3.0
percent from $132.1 million for the first quarter of 2005. Interest
expense increased 20.8 percent, or $8.3 million, to $48.3 million
for the second quarter of 2005 from $40.0 million for the second
quarter last year and 7.4 percent from $45.0 million for the first
quarter of 2005. The average taxable equivalent yield on earning
assets increased to 5.63 percent for the second quarter of 2005
from 5.15 percent for the second quarter of 2004 and 5.48 percent
for the first quarter of 2005. The average rate paid on interest
bearing liabilities was 2.34 percent for the second quarter of
2005, compared with 1.93 percent for the second quarter of 2004 and
2.17 percent for the first quarter of 2005. Net interest revenue
increased 4.8 percent to $87.7 million for the second quarter of
2005 from $83.7 million for the second quarter of 2004 and 0.7
percent from $87.1 million for the first quarter of 2005. Net
interest margin expanded to 3.66 percent for the second quarter of
2005 from 3.52 percent for the second quarter of 2004 and 3.64
percent for the first quarter of 2005. Patterson remarked, "The
stronger loan growth is primarily accountable for our second
consecutive comparable-quarter increase in net interest revenue.
The increase in our net interest margin again demonstrated our
ongoing efforts to optimize our asset/liability mix to maximize net
interest revenue while reducing our exposure to interest rate
volatility. The growth in loans enhanced our ability to achieve
this goal for the second quarter, especially in a rising interest
rate environment, as did our conservative investment discipline and
our continued focus on growth in low cost liabilities." Deposit and
Loan Activity Total assets at June 30, 2005, increased 1.5 percent
to $10.8 billion from $10.7 billion at June 30, 2004. Total
deposits grew 2.1 percent to $9.0 billion at June 30, 2005, from
$8.8 billion at June 30, 2004. Loans and leases, net of unearned
interest, increased 9.7 percent to $7.0 billion at June 30, 2005,
from $6.4 billion at June 30, 2004. Patterson said, "We attribute
our loan growth for the second quarter to both continued internal
growth, which has now increased for four consecutive quarters, and
to our December 2004 acquisitions of banks in Brentwood, TN, and
Baton Rouge, LA. As in recent quarters, a number of our markets
produced double-digit loan growth for the second quarter, driven by
the stronger economic activity throughout our markets. In addition,
the 7.5 percent increase in our demand deposits for the second
quarter of 2005 compared with the second quarter last year also
reflects strong internal growth and the December acquisitions.
Savings and other time deposits fell 2.2 percent on a
comparable-quarter basis, consistent with our success in funding
our loan growth through lower cost demand deposits and maturing
investment securities, while restricting growth in higher priced
liabilities." Provision for Credit Losses and Allowance for Credit
Losses The provision for credit losses for the second quarter of
2005 decreased 38.4 percent to $3.0 million from $4.8 million for
both the second quarter of 2004 and the first quarter of 2005.
Annualized net charge-offs were 0.26 percent of average loans and
leases for the second quarter of 2005 compared with 0.36 percent
for the second quarter of 2004 and 0.22 percent for the first
quarter of 2005. Non-performing loans and leases fell 36.1 percent
to $23.7 million, or 0.34 percent of loans and leases, at June 30,
2005, from $37.1 million, or 0.58 percent of loans and leases, at
June 30, 2004, while decreasing 25.8 percent from $32.0 million, or
0.46 percent of loans and leases, at March 31, 2005. The allowance
for credit losses was 1.29 percent of loans and leases at June 30,
2005, 1.41 percent of loans and leases at June 30, 2004 and 1.34
percent of loans and leases at March 31, 2005. "Our ability to
reduce our provision for credit losses for the quarter, in spite of
solid loan growth, was entirely attributable to the continued
improvement in our loan quality," said Patterson. "After six
consecutive quarterly declines in total nonperforming loans, our
reserve coverage, or allowance for credit losses to nonperforming
loans, has improved to 3.8 at the end of the second quarter of 2005
from 2.4 at the same time in 2004 and 2.9 at the end of the first
quarter of 2005. In addition, our allowance for credit losses to
annualized charge-offs remained significantly stronger than
industry averages at 4.9 for the second quarter of 2005 compared
with 4.0 for the second quarter last year and 6.1 for the first
quarter of 2005. Although we believe a stronger economic
environment has contributed to stronger loan quality, we also
credit the Company's disciplined lending and credit practices and
our colleagues responsible for their ongoing implementation."
Noninterest Revenue Noninterest revenue declined $8.4 million, or
16.3 percent, for the second quarter of 2005 compared with the
second quarter of 2004, primarily due, as discussed above, to the
negative $3.9 million impact from impairment of the MSA for the
second quarter of 2005 compared with the positive $9.4 million
impact from the recovery of a previously recorded impairment to the
MSA for the second quarter of 2004. Excluding these items,
noninterest revenue increased 11.5 percent for the second quarter
of 2005 from the second quarter of 2004. Patterson added, "We
remain fully committed to expanding our noninterest revenues as an
important long-term strategy for lowering the impact of interest
rate volatility on the Company's financial results. The continuing
potential of this strategy is demonstrated by the ongoing growth in
our insurance commission revenue, which rose 9.0 percent for the
second quarter of 2005 from the comparable prior-year quarter. We
are pleased with the growth produced in our insurance operations as
we have increased the integration of our regional insurance
agencies. We are focused on expanding this business through further
growth within existing markets and additional potential
acquisitions within our current six-state franchise or contiguous
states." Noninterest Expense Noninterest expense increased 7.8
percent to $90.6 million for the second quarter of 2005 from $84.0
million for the same quarter in 2004 and increased 1.0 percent from
$89.7 million for the first quarter of 2005. The comparable-
quarter growth in noninterest expense for the second quarter
primarily reflected the additional salaries and employee benefits
expense from operating the Brentwood, TN and Baton Rouge, LA banks
that were acquired in December 2004, as well as increased occupancy
costs related to the opening of new offices. Capital Management
BancorpSouth repurchased 24,000 shares of its common stock during
the second quarter of 2005 under a new stock repurchase plan
authorized in April 2005 for the repurchase of up to 3 million
shares. Combined with the shares repurchased under earlier plans,
BancorpSouth had repurchased approximately 10.6 million shares of
its common stock as of June 30, 2005, or approximately 13 percent
of the shares outstanding when the share repurchase program was
initiated in 2001. BancorpSouth will continue to evaluate
additional share repurchases under the April 2005 plan, which
authorizes these repurchases during a two-year period expiring
April 30, 2007. Summary Patterson concluded, "As we enter the
second half of 2005, we are confident of BancorpSouth's strong
competitive position within its mid-South market and of the
Company's ability to leverage the opportunities presented by
sustained economic expansion. Because of the long-term focus of our
business model and operating strategies, we are prepared for the
expansionary phase of the economic cycle with proven people, clear
business objectives, a strong capital base, high credit quality and
a centralized technology infrastructure with inherent potential for
significant operating leverage. We expect to produce growth in both
our traditional banking business and in our noninterest revenue
products and services through increased penetration of existing
markets and expansion into new markets. We also continue to
evaluate potential acquisitions appropriate to achieving our
goals." Conference Call BancorpSouth will conduct a conference call
to discuss its second quarter results tomorrow, July 22, 2005, at
10:00 a.m. (Central Time). 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,
noninterest revenue products and services, lending and credit
practices, business objectives, asset/liability mix, low cost
liabilities, loan demand, loan quality, loan and deposit growth,
long-term strategy, insurance operations, operating leverage,
centralized technology infrastructure, allowance for credit losses,
net interest revenue, customer relationships, credit quality,
business model and operating strategies, expansion of products and
services, penetration of existing markets and expansion into new
markets, potential acquisitions, the economic and operating
environment, common stock repurchase plan, capitalization,
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 increase
noninterest revenue and expand noninterest revenue business, the
ability of BancorpSouth to fund growth with lower cost liabilities,
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, 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 and increase
shareholder value, 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 leverage opportunities, the ability of BancorpSouth
to identify and close potential acquisitions, the ability of
BancorpSouth to expand geographically and enter fast-growing
markets, 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 Six Months Ended June 30, June
30, 2005 2004 2005 2004 (Dollars in thousands, except per share
amounts) Earnings Summary: Net interest revenue $87,717 $83,684
$174,846 $167,166 Provision for credit losses 2,980 4,835 7,767
8,851 Noninterest revenue 43,022 51,416 96,941 97,456 Noninterest
expense 90,575 84,031 180,263 170,036 Income before income taxes
37,184 46,234 83,757 85,735 Income tax provision 11,394 14,961
26,223 27,297 Net income $25,790 $31,273 $57,534 $58,438 Earning
per share: Basic $0.33 $0.41 $0.74 $0.76 Diluted $0.33 $0.40 $0.73
$0.75 Balance sheet data at June 30: Total assets $10,831,291
$10,670,323 Total earning assets 9,876,000 9,797,631 Loans and
leases, net of unearned interest 7,046,942 6,422,864 Allowance for
credit losses 91,076 90,537 Total deposits 8,974,580 8,789,246
Common shareholders' equity 936,167 852,910 Book value per share
11.96 11.10 Average balance sheet data: Total assets $10,788,265
$10,614,248 $10,833,282 $10,533,989 Total earning assets 9,858,677
9,831,843 9,906,348 9,753,243 Loans and leases, net of unearned
interest 6,989,792 6,333,868 6,932,500 6,280,566 Total deposits
8,963,216 8,801,737 9,028,500 8,794,229 Common shareholders' equity
924,661 886,197 921,617 876,096 Non-performing assets at June 30:
Non-accrual loans and leases $10,619 $13,611 Loans and leases 90+
days past due 11,010 19,462 Restructured loans and leases 2,120
4,072 Other real estate owned 16,072 20,440 Net charge-offs as a
percentage of average loans (annualized) 0.26% 0.36% 0.24% 0.33%
Performance ratios (annualized) Return on average assets 0.96%
1.18% 1.07% 1.12% Return on common equity 11.19% 14.19% 12.59%
13.40% Net interest margin 3.66% 3.52% 3.65% 3.54% Average shares
outstanding - basic 78,220,515 77,063,891 78,212,363 77,365,432
Average shares outstanding - diluted 78,536,657 77,444,302
78,554,782 77,783,687 BancorpSouth, Inc. Consolidated Balance Sheet
(Unaudited) June 30, % 2005 2004 Change (In thousands) Assets Cash
and due from banks $354,694 $333,697 6.29% Interest bearing
deposits with other banks 6,746 18,024 (62.57%) Held-to-maturity
securities, at amortized cost 1,208,680 1,510,209 (19.97%)
Available-for-sale securities, at fair value 1,531,165 1,793,134
(14.61%) Trading securities, at fair value 114 - N/A Federal funds
sold and securities purchased under agreement to resell 24,569
10,488 134.26% Loans and leases 7,077,568 6,452,602 9.69% Less:
Unearned interest (30,626) (29,738) 2.99% Allowance for credit
losses (91,076) (90,537) 0.60% Net loans and leases 6,955,866
6,332,327 9.85% Loans held for sale 57,785 42,913 34.66% Premises
and equipment, net 239,306 218,456 9.54% Accrued interest
receivable 65,428 68,690 (4.75%) Goodwill 107,780 61,445 75.41%
Other assets 279,158 280,940 (0.63%) Total Assets $10,831,291
$10,670,323 1.51% Liabilities Deposits: Demand: Noninterest bearing
$1,489,190 $1,311,477 13.55% Interest bearing 2,723,172 2,607,141
4.45% Savings 732,298 786,235 (6.86%) Other time 4,029,920
4,084,393 (1.33%) Total deposits 8,974,580 8,789,246 2.11% Federal
funds purchased and securities sold under agreement to repurchase
484,400 458,116 5.74% Other short-term borrowings 62,000 185,000
(66.49%) Accrued interest payable 19,628 17,590 11.59% Junior
subordinated debt securities 138,145 128,866 7.20% Long-term debt
137,954 137,838 0.08% Other liabilities 78,417 100,757 (22.17%)
Total Liabilities 9,895,124 9,817,413 0.79% Shareholders' Equity
Common stock 195,723 192,086 1.89% Capital surplus 83,359 44,445
87.56% Accumulated other comprehensive income (loss) (7,607)
(8,276) (8.08%) Retained earnings 664,692 624,655 6.41% Total
Shareholders' Equity 936,167 852,910 9.76% Total Liabilities &
Shareholders' Equity $10,831,291 $10,670,323 1.51% BANCORPSOUTH,
INC. Consolidated Condensed Statements of Income (dollars in
thousands, except per share data) (Unaudited) Quarter Ended Jun
2005 Mar 2005 Dec 2004 INTEREST REVENUE: Loans and leases $109,874
$103,805 $96,666 Deposits with other banks 139 111 135 Federal
funds sold and securities purchased under agreement to resell 197
391 272 Held-to-maturity securities: Taxable 9,452 9,766 10,812
Tax-exempt 1,557 1,598 1,621 Available-for-sale securities: Taxable
12,765 13,745 14,516 Tax-exempt 1,491 1,677 1,584 Loans held for
sale 571 1,018 649 Total interest revenue 136,046 132,111 126,255
INTEREST EXPENSE: Deposits 40,432 37,905 36,103 Fed funds purchased
and securities sold under agreement to repurchase 2,590 2,161 1,726
Other 5,307 4,916 4,758 Total interest expense 48,329 44,982 42,587
Net interest revenue 87,717 87,129 83,668 Provision for credit
losses 2,980 4,787 5,104 Net interest revenue, after provision for
credit losses 84,737 82,342 78,564 NONINTEREST REVENUE: Mortgage
lending (2,453) 5,628 2,041 Service charges 16,411 14,726 15,533
Trust income 2,004 1,889 2,111 Security gains, net 371 70 (1,484)
Insurance commissions 14,425 15,932 14,282 Other 12,264 15,674
11,253 Total noninterest revenue 43,022 53,919 43,736 NONINTEREST
EXPENSES: Salaries and employee benefits 52,578 53,240 50,852
Occupancy, net of rental income 6,841 6,412 6,649 Equipment 5,637
5,449 5,329 Other 25,519 24,587 25,098 Total noninterest expenses
90,575 89,688 87,928 Income before income taxes 37,184 46,573
34,372 Income tax expense 11,394 14,829 9,778 Net income $25,790
$31,744 $24,594 Net income per share: Basic $0.33 $0.41 $0.32
Diluted $0.33 $0.40 $0.32 BANCORPSOUTH, INC. Consolidated Condensed
Statements of Income (dollars in thousands, except per share data)
(Unaudited) Quarter Ended Sep 2004 Jun 2004 INTEREST REVENUE: Loans
and leases $93,759 $91,358 Deposits with other banks 102 288
Federal funds sold and securities purchased under agreement to
resell 111 115 Held-to-maturity securities: Taxable 12,020 12,791
Tax-exempt 1,693 1,694 Available-for-sale securities: Taxable
14,691 15,309 Tax-exempt 1,613 1,650 Loans held for sale 517 478
Total interest revenue 124,506 123,683 INTEREST EXPENSE: Deposits
35,198 33,915 Fed funds purchased and securities sold under
agreement to repurchase 1,336 1,101 Other 5,014 4,983 Total
interest expense 41,548 39,999 Net interest revenue 82,958 83,684
Provision for credit losses 3,530 4,835 Net interest revenue, after
provision for credit losses 79,428 78,849 NONINTEREST REVENUE:
Mortgage lending (672) 11,365 Service charges 15,965 16,057 Trust
income 2,059 1,842 Security gains, net 146 59 Insurance commissions
14,366 13,232 Other 10,463 8,861 Total noninterest revenue 42,327
51,416 NONINTEREST EXPENSES: Salaries and employee benefits 49,176
48,628 Occupancy, net of rental income 6,264 6,084 Equipment 5,390
5,636 Other 24,150 23,683 Total noninterest expenses 84,980 84,031
Income before income taxes 36,775 46,234 Income tax expense 9,187
14,961 Net income $27,588 $31,273 Net income per share: Basic $0.36
$0.41 Diluted $0.36 $0.40 BANCORPSOUTH, INC. Consolidated Condensed
Statements of Income (dollars in thousands, except per share data)
(Unaudited) Year To Date Jun 2005 Jun 2004 INTEREST REVENUE: Loans
and leases $213,678 $183,608 Deposits with other banks 251 416
Federal funds sold and securities purchased under agreement to
resell 589 811 Held-to-maturity securities: Taxable 19,218 22,903
Tax-exempt 3,154 3,490 Available-for-sale securities: Taxable
26,510 30,997 Tax-exempt 3,168 3,409 Loans held for sale 1,589
1,234 Total interest revenue 268,157 246,868 INTEREST EXPENSE:
Deposits 78,337 67,832 Fed funds purchased and securities sold
under agreement to repurchase 4,751 2,163 Other 10,223 9,707 Total
interest expense 93,311 79,702 Net interest revenue 174,846 167,166
Provision for credit losses 7,767 8,851 Net interest revenue, after
provision for credit losses 167,079 158,315 NONINTEREST REVENUE:
Mortgage lending 3,175 10,224 Service charges 31,137 30,375 Trust
income 3,893 3,528 Security gains, net 441 677 Insurance
commissions 30,357 27,690 Other 27,938 24,962 Total noninterest
revenue 96,941 97,456 NONINTEREST EXPENSES: Salaries and employee
benefits 105,818 98,663 Occupancy, net of rental income 13,252
12,040 Equipment 11,087 11,096 Other 50,106 48,237 Total
noninterest expenses 180,263 170,036 Income before income taxes
83,757 85,735 Income tax expense 26,223 27,297 Net income $57,534
$58,438 Net income per share: Basic $0.74 $0.76 Diluted $0.73 $0.75
BancorpSouth, Inc. Average Balances, Interest Income and Expense,
and Average Yields and Rates (Dollars in thousands) (Unaudited)
Quarter Ended June 30, 2005 Average Yield/ (Taxable equivalent
basis) Balance Interest Rate ASSETS Loans, loans held for sale, and
leases net of unearned interest $7,034,782 $111,017 6.33%
Held-to-maturity securities: Taxable 1,072,562 9,452 3.53%
Tax-exempt 137,503 2,395 6.99% Available-for-sale securities:
Taxable 1,444,327 12,765 3.54% Tax-exempt 131,287 2,294 7.01%
Short-term investments 38,216 336 3.54% Total interest earning
assets and revenue 9,858,677 138,259 5.63% Other assets 1,022,044
Less: allowance for credit losses (92,456) Total $10,788,265
LIABILITIES AND SHAREHOLDERS' EQUITY Deposits: Demand - interest
bearing $2,795,706 $8,762 1.26% Savings 747,451 1,503 0.81% Other
time 3,954,223 30,166 3.06% Short-term borrowings 517,846 3,109
2.41% Junior subordinated debt 138,145 2,771 8.04% Long-term debt
138,074 2,018 5.86% Total interest bearing liabilities and expense
8,291,445 48,329 2.34% Demand deposits - noninterest bearing
1,465,836 Other liabilities 106,323 Total liabilities 9,863,604
Shareholders' equity 924,661 Total $10,788,265 Net interest revenue
$89,930 Net interest margin 3.66% Net interest rate spread 3.29%
Interest bearing liabilities to interest earning assets 84.10% Net
interest tax equivalent adjustment $2,213 BancorpSouth, Inc.
Average Balances, Interest Income and Expense, and Average Yields
and Rates (Dollars in thousands) (Unaudited) Quarter Ended June 30,
2004 Average Yield/ (Taxable equivalent basis) Balance Interest
Rate ASSETS Loans, loans held for sale, and leases net of unearned
interest $6,374,578 $92,361 5.83% Held-to-maturity securities:
Taxable 1,343,048 12,791 3.83% Tax-exempt 148,345 2,606 7.06%
Available-for-sale securities: Taxable 1,718,434 15,307 3.58%
Tax-exempt 152,756 2,538 6.68% Short-term investments 94,682 402
1.71% Total interest earning assets and revenue 9,831,843 126,005
5.15% Other assets 874,186 Less: allowance for credit losses
(91,781) Total $10,614,248 LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits: Demand - interest bearing $2,669,270 $5,765 0.87% Savings
790,000 1,353 0.69% Other time 4,059,635 26,798 2.65% Short-term
borrowings 531,398 1,400 1.06% Junior subordinated debt 128,866
2,625 8.19% Long-term debt 137,952 2,058 6.00% Total interest
bearing liabilities and expense 8,317,122 39,999 1.93% Demand
deposits - noninterest bearing 1,282,832 Other liabilities 128,097
Total liabilities 9,728,051 Shareholders' equity 886,197 Total
$10,614,248 Net interest revenue $86,006 Net interest margin 3.52%
Net interest rate spread 3.22% Interest bearing liabilities to
interest earning assets 84.59% Net interest tax equivalent
adjustment $2,322 BancorpSouth, Inc. Average Balances, Interest
Income and Expense, and Average Yields and Rates (Dollars in
thousands) (Unaudited) Year To Date June 30, 2005 Average Yield/
(Taxable equivalent basis) Balance Interest Rate ASSETS Loans,
loans held for sale, and leases net of unearned interest $7,006,579
$216,388 6.23% Held-to-maturity securities: Taxable 1,082,715
19,218 3.58% Tax-exempt 137,915 4,853 7.10% Available-for-sale
securities: Taxable 1,488,762 26,510 3.59% Tax-exempt 135,200 4,874
7.27% Short-term investments 55,177 839 3.07% Total interest
earning assets and revenue 9,906,348 272,682 5.55% Other assets
1,019,268 Less: allowance for credit losses (92,334) Total
$10,833,282 LIABILITIES AND SHAREHOLDERS' EQUITY Deposits: Demand -
interest bearing $2,832,204 $16,577 1.18% Savings 756,919 3,058
0.81% Other time 3,993,458 58,702 2.96% Short-term borrowings
491,173 5,407 2.22% Junior subordinated debt 138,145 5,526 8.07%
Long-term debt 138,276 4,041 5.89% Total interest bearing
liabilities and expense 8,350,175 93,311 2.25% Demand deposits -
noninterest bearing 1,445,919 Other liabilities 115,571 Total
liabilities 9,911,665 Shareholders' equity 921,617 Total
$10,833,282 Net interest revenue $179,371 Net interest margin 3.65%
Net interest rate spread 3.30% Interest bearing liabilities to
interest earning assets 84.29% Net interest tax equivalent
adjustment $4,525 BancorpSouth, Inc. Average Balances, Interest
Income and Expense, and Average Yields and Rates (Dollars in
thousands) (Unaudited) Year To Date June 30, 2004 Average Yield/
(Taxable equivalent basis) Balance Interest Rate ASSETS Loans,
loans held for sale, and leases net of unearned interest $6,344,678
$185,883 5.89% Held-to-maturity securities: Taxable 1,170,951
22,903 3.93% Tax-exempt 148,805 5,368 7.25% Available-for-sale
securities: Taxable 1,730,460 30,994 3.60% Tax-exempt 158,982 5,244
6.63% Short-term investments 199,367 1,227 1.24% Total interest
earning assets and revenue 9,753,243 251,619 5.19% Other assets
872,802 Less: allowance for credit losses (92,056) Total
$10,533,989 LIABILITIES AND SHAREHOLDERS' EQUITY Deposits: Demand -
interest bearing $2,685,161 $11,459 0.86% Savings 787,081 2,715
0.69% Other time 4,062,137 53,659 2.66% Short-term borrowings
471,545 2,497 1.06% Junior subordinated debt 128,866 5,251 8.19%
Long-term debt 138,117 4,122 6.00% Total interest bearing
liabilities and expense 8,272,907 79,702 1.94% Demand deposits -
noninterest bearing 1,259,850 Other liabilities 124,136 Total
liabilities 9,656,893 Shareholders' equity 876,096 Total
$10,533,989 Net interest revenue $171,917 Net interest margin 3.54%
Net interest rate spread 3.25% Interest bearing liabilities to
interest earning assets 84.82% Net interest tax equivalent
adjustment $4,751 BancorpSouth, Inc. Reconciliation of Adjusted
Earnings and Adjusted Earnings Per Diluted Share to Earnings and
Earnings Per Diluted Share (Unaudited) (In thousands, except per
share amounts) Three-Months Ended June 30, 2005 2004 Earnings -
GAAP basis (a) $25,790 $31,273 Mortgage servicing asset expense
(recovery), net of tax 2,383 (5,782) Adjusted earnings (b) $28,173
$25,491 Earnings per diluted share - GAAP basis $0.33 $0.40
Adjusted earnings per diluted share (b) $0.36 $0.33 Diluted shares
used in computing per share amounts: Earnings per share 78,536,657
77,444,302 Adjusted earnings per share 78,536,657 77,444,302 (a)
GAAP is the acronym for generally accepted accounting principles.
(b) BancorpSouth, Inc. believes its calculation of adjusted
earnings per diluted share provides a better measure of the
Company's ongoing performance and provides better comparability to
prior periods because it excludes a volatile non-cash item.
Adjusted earnings per diluted share should not be considered as a
measure of financial performance under accounting principles
generally accepted in the United States, and the items excluded
from it are significant components in understanding and assessing
financial performance. Because adjusted earnings per diluted share
is not a measurement determined in accordance with accounting
principles generally accepted in the United States and is thus
susceptible to varying calculations, it may not be comparable as
presented to other similarly titled measures of other companies.
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.
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